PVH Q3 Earnings on the Horizon: Here's What Investors Should Know

Core Viewpoint - PVH Corporation is expected to report a decline in both revenue and earnings for the third quarter of fiscal 2024, with revenues estimated at $2.2 billion, a decrease of 5.9% year-over-year, and earnings per share projected at $2.61, down 10% from the previous year [1]. Financial Performance - The consensus estimate for quarterly revenues is $2.2 billion, reflecting a 5.9% decline from the prior year [1]. - The earnings consensus is set at $2.61 per share, indicating a 10% year-over-year decrease [1]. - In the last reported quarter, the company achieved an earnings surprise of 32.6%, with an average trailing four-quarter earnings surprise of 14.9% [2]. Factors Impacting Earnings - PVH has faced challenges in its Heritage Brands segment, particularly due to declining sales in the women's intimates business [4]. - Increased raw material costs and currency headwinds have negatively impacted profitability [4]. - Management previously guided for a revenue decline of 6-7% year-over-year, including a 2% reduction from the Heritage intimates business sale [5]. - The anticipated operating margin for the third quarter is expected to decline year-over-year, despite increased gross margins [5]. Sales Projections - The Zacks Consensus Estimate for Tommy Hilfiger and Calvin Klein sales is $1.2 billion and $997 million, respectively, representing year-over-year drops of 4.2% and 1.7% [6]. - A high single-digit revenue decrease is anticipated in the wholesale business, with a 5% decline attributed to the Heritage intimates business [6]. Strategic Initiatives - PVH's PVH+ Plan aims to accelerate growth by enhancing core strengths and connecting its brands with consumers [7]. - The company is focused on creating high-quality products in significant growth categories and strengthening its global presence [7]. Valuation Perspective - PVH shares are currently trading at a forward 12-month price-to-earnings ratio of 8.60X, which is below the five-year median of 9.54X and the industry average of 13.76X, indicating an attractive investment opportunity [9].