PVH Gears Up for Q4 Earnings: Here's What Investors Should Know

Core Viewpoint - PVH Corporation is expected to report a decline in both revenue and earnings for the fourth quarter of fiscal 2024, with revenues estimated at $2.3 billion, a decrease of 6.1$3.19, down 14.3% from the previous year [1]. Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for quarterly revenues is pegged at $2.3 billion, indicating a drop of 6.1$3.19 per share, which indicates a decline of 14.3% year over year [1]. - In the last reported quarter, the company delivered an earnings surprise of 16.1%, with a trailing four-quarter earnings surprise of 17.3% on average [2]. Group 2: Operational Challenges - The fourth-quarter results are expected to reflect a challenging operating backdrop due to a calendar shift, including the loss of the 53rd week [3]. - The Heritage Brands segment has been experiencing sluggishness, particularly in the women's intimates business [3]. - The wholesale channel is under pressure, with anticipated softness in orders from retail partners and a more promotional retail environment expected to weigh on profitability [4]. Group 3: Margin and Cost Pressures - The fourth-quarter operating margin is expected to contract by 200 basis points to 10% [5]. - Gross margin is forecasted to decline nearly 200 basis points due to a moderately higher promotional backdrop and elevated freight costs [6]. - Management anticipates a mid-single-digit revenue decrease in the wholesale business, including a 2% decline from the Heritage Intimates business [7]. Group 4: Regional Performance Insights - In Europe, the company foresees a high-single-digit revenue decline in euros, reflecting ongoing macroeconomic challenges [7]. - The Zacks Consensus Estimate for Tommy Hilfiger and Calvin Klein sales is currently pegged at $1.3 billion and$1.02 billion, indicating year-over-year drops of 1.4% and 3.2% respectively [7]. Group 5: Strategic Initiatives - PVH Corp's PVH+ Plan aims to accelerate growth by enhancing core strengths and connecting its brands with consumers [8]. - The company strives to create the best products across significant growth categories and strengthen its presence in global demand spaces [8]. Group 6: Valuation Perspective - PVH Corp's shares are trading at a forward 12-month price-to-earnings ratio of 5.43, below the five-year median of 9.21x and the industry average of 12.02x, presenting an attractive opportunity for investors [10].