Here's How PVH Corp (PVH) Is Placed Ahead of Q1 Earnings
PVH Corporation PVH will report first-quarter fiscal 2024 results on Jun 5 after the market close. The consensus mark for quarterly revenues is pegged at $1.9 billion, indicating a decline of 10.7% from the prior-year reported number.
The Zacks Consensus Estimate for the company’s earnings is pegged at $2.14 per share, which remains flat year over year. The consensus mark has moved up by a penny in the past 30 days.
In the last reported quarter, the company delivered an earnings surprise of 6%. It has a trailing four-quarter earnings surprise of 9.2%, on average.
Factors to Note
PVH Corp has been focused on fueling digital growth by developing a holistic distribution strategy for Calvin Klein and Tommy Hilfiger, driven by digital and direct-to-consumer channels and wholesale partnerships. It has also been focusing on boosting efficiencies to be cost-competitive and, in turn, reinvest in strategic plans. Gains from these efforts are likely to have been reflected in the company’s top and bottom-line performance.
PVH Corp. Price and EPS Surprise
PVH Corp. price-eps-surprise | PVH Corp. Quote
The continued momentum in PVH Corp's international unit is likely to have aided its performance. Management has been on track with the PVH+ Plan, which is likely to have resulted in substantial cost efficiencies and better productivity. PVH Corp has been gaining from the continued momentum in its core brands, along with pricing actions and strong consumer engagement.
However, PVH Corp has been witnessing elevated inventory costs and increased investments, which have been denting margins. High raw material costs and currency headwinds have been added concerns. Additionally, the company has been witnessing an elevated SG&A expense rate from increased investment-related costs for the DTC and international businesses. The gross margin is expected to have reflected higher product costs, the negative impacts of foreign exchange and abnormally high raw material costs.
On the last earnings call, revenues were projected to decline 11% year over year, including a 3% reduction related to the Heritage Brands sale, illustrating early-year challenges and the impact of strategic divestitures. Our model predicts a sales decline of 10.2% for Tommy Hilfiger for the fiscal first quarter. Sales for Calvin Klein are anticipated to decrease 11.2% year over year while Heritage Brands is expected to record a sales fall of 10.7%.
Zacks Model
Our proven model predicts an earnings beat for PVH Corp this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
PVH Corp has an Earnings ESP of +0.70% and a Zacks Rank of 3. You can uncover the best stocks before they're reported with our Earnings ESP Filter.
Valuation Picture
From a valuation perspective, PVH Corp offers an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 10.01x, which is below the five-year high of 124.50x and the Textile - Apparel industry’s average of 29.58x, the stock offers compelling value for investors seeking exposure to the sector. Additionally, the current Value Score of A adds weight to this optimistic view.
The recent market movements show that PVH Corp’s shares have risen 15.8% in the past six months against the industry's 15.7% decline.
Other Stocks to Consider
Here are some companies, which according to our model, also have the right combination of elements to post an earnings beat in their upcoming releases.
Deckers Outdoor Corporation DECK currently has an Earnings ESP of +3.91% and a Zacks Rank of 3. The company is likely to register top-line growth when it reports first-quarter results. The Zacks Consensus Estimate for quarterly revenues is pegged at $777.9 million, which indicates an increase of 15.1% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for the quarterly earnings per share of $3.03 suggests an increase of 25.7% from the year-ago quarter.
Dollar Tree DLTR currently has an Earnings ESP of +0.16% and a Zacks Rank of 3. The company is likely to register top-line growth when it reports first-quarter fiscal 2024 results. The consensus mark for DLTR’s quarterly revenues is pegged at $7.6 billion, which suggests growth of 4.2% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Dollar Tree’s earnings has moved down a penny to $1.43 per share in the past seven days. The consensus estimate indicates a drop of 2.7% from the year-ago quarter’s actual.
Ollie's Bargain Outlet OLLI presently has an Earnings ESP of +1.80% and a Zacks Rank of 3. The company is likely to register growth in the top line when it reports first-quarter results. The consensus mark for OLLI’s quarterly revenues is pegged at $505.8 billion, which suggests 10.2% growth from the figure reported in the prior-year quarter.
The consensus mark for OLLI’s quarterly earnings has been stable in the past 30 days at 65 cents per share. The consensus estimate suggests an increase of 32.7% from the year-ago quarter’s actual.
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Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report
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Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
