PVH's Q3 Earnings Beat Estimates, Stock Dips on Weak Q4 Guidance

Core Viewpoint - PVH Corporation reported better-than-expected earnings in Q3 FY2024, with adjusted EPS and revenues surpassing estimates, although revenues declined year-over-year [1][2][3] Financial Performance - Adjusted earnings per share (EPS) for Q3 were $3.03, a 4.5% increase from $2.90 in the prior year, exceeding the Zacks Consensus Estimate of $2.61 and the company's guidance of $2.50 [3] - Revenues fell 5% year-over-year to $2,255 million, but were above the consensus estimate of $2,228 million; management had anticipated a decline of 6-7% [4] - Gross profit was $1.3 billion, down 1.5% year-over-year, while gross margin expanded by 170 basis points to 58.4% due to a favorable shift in channel mix [8] Revenue Breakdown - International revenues increased by 0.4%, but decreased by 1.8% on a constant currency basis; growth in Asia Pacific was offset by reduced sales in Europe [5] - Direct-to-consumer revenues rose 0.4% year-over-year, while wholesale revenues fell 7.6% [6][7] - The Calvin Klein segment saw a 2.8% decline in revenues, while Tommy Hilfiger revenues dropped 0.7% [10][11] Guidance and Future Expectations - For Q4 FY2024, revenues are projected to decline by 6-7%, with adjusted EPS expected in the range of $3.05-$3.20 compared to $3.72 in the prior year [14][15] - For the full fiscal year 2024, the company anticipates a revenue decline of 6-7% and adjusted operating margin to remain nearly flat [16] - Management revised EPS guidance downwards, now expecting non-GAAP EPS of $11.55-$11.70, compared to the previous range of $11.55-$11.80 [17] Shareholder Returns - The company repurchased 300,000 shares for $29 million in the reported quarter, with a total of 2.4 million shares repurchased for $254 million in the first nine months of FY2024 [13]