PVH Presents Solid Q3 Results, Lifts Full-Year EPS Guidance

PVH Corp. presented a robust performance in the third quarter, resulting in an upward adjustment of the US apparel giant’s full-year earnings per share (EPS) outlook.

The clothing company stocks closed 1.52% higher at $91.44 on Wednesday. However, the shares significantly declined by 4.32% in the after-hours session to $87.49.

The Tommy Hilfiger and Calvin Klein owner’s revenue increased to $2.36 billion in the three months ending October, beating market expectations.

Its generally accepted accounting principles (GAAP) EPS for the quarter was $2.66, exceeding the $2.43 forecast. Non-GAAP EPS climbed higher to $2.90, also above the $2.70 expected.

The solid financial results were primarily due to an 8% surge in direct-to-consumer sales and a 13% rise in digital sales.

PVH’s success prompted a raise in its full-year EPS guidance, with GAAP EPS now estimated at around $9.75 and non-GAAP EPS at approximately $10.45. The positive adjustment mirrors the company’s optimism about its financial tactics and market presence.

PVH mainly excelled in North America as revenues in Calvin Klein and Tommy Hilfiger grew 6% and 4%, respectively.

However, the firm saw an anticipated 11% fall in Heritage Brands after selling its intimate apparel brand in November. Still, the move resulted in more capital for PVH, which has been assigned to a $550 million share buyback plan.

For fiscal 2023, the company projects a 1.00% revenue increase and a modest 3.00%-4.00% revenue decline in the fourth quarter, signaling a challenge at the year’s end.

Despite that, PVH is sticking to its strategy, aiming for a 25% cut to inventory relative to sales and expecting a GAAP EPS of almost $3.48 and non-GAAP EPS of nearly $3.45 in the current quarter.

Analysts Expect PVH Corp to Spike Until Q2 2024

PVH is expected to grow consistently in the apparel market due to its strategic financial management and strong capital plans.

According to reports, the clothing giant’s current market capitalization is $5.53 billion. Analysts noted a trailing twelve-month price-to-earnings (P/E) ratio as of the second quarter of 2024 at 9.72, suggesting an appealing valuation relative to earnings.

PVH has also achieved a revenue of $9.13 billion for the past twelve months as of the same quarter, posting a slight surge of 1.3%.

Experts said the management’s robust share repurchasing approach and the possibility of net income growth this year aligned with the company’s reported financial plans.

Furthermore, seeing PVH’s history of maintaining dividends for 53 straight years, the company will likely continue dividend payouts.

The US apparel giant is also trading close to its 52-week high, signaling investors’ optimism following its recent performance.