UK markets close in 7 hours 6 minutes
  • FTSE 100

    7,524.77
    +14.05 (+0.19%)
     
  • FTSE 250

    17,933.58
    -43.71 (-0.24%)
     
  • AIM

    715.56
    -2.08 (-0.29%)
     
  • GBP/EUR

    1.1526
    -0.0005 (-0.04%)
     
  • GBP/USD

    1.2090
    +0.0000 (+0.00%)
     
  • Bitcoin GBP

    22,845.06
    -652.48 (-2.78%)
     
  • CMC Crypto 200

    590.45
    -13.09 (-2.17%)
     
  • S&P 500

    4,288.39
    +0.34 (+0.01%)
     
  • DOW

    33,433.35
    -74.15 (-0.22%)
     
  • CRUDE OIL

    88.62
    -0.20 (-0.23%)
     
  • GOLD FUTURES

    1,843.70
    -3.50 (-0.19%)
     
  • NIKKEI 225

    31,237.94
    -521.94 (-1.64%)
     
  • HANG SENG

    17,331.22
    -478.44 (-2.69%)
     
  • DAX

    15,234.79
    -12.42 (-0.08%)
     
  • CAC 40

    7,061.51
    -6.65 (-0.09%)
     

PVH Corp (PVH) Q1 Earnings & Revenues Beat on PVH+ Plan

PVH Corporation PVH posted solid first-quarter fiscal 2023 results, wherein the bottom and top lines surpassed the Zacks Consensus Estimate and grew year over year. Results gained from strong execution of the PVH+ Plan and continued momentum in its core brands — Calvin Klein and Tommy Hilfiger. The company continues to manage expenses, driving cost efficiencies.

In the past three months, this Zacks Rank #2 (Buy) stock has gained 4.5% against the industry's decline of 5.4%.

Q1 Highlights

PVH Corp reported adjusted earnings of $2.14 per share, up 10% from the year-ago quarter's $1.94. Also, the bottom line beat the Zacks Consensus Estimate of $1.93.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

In the fiscal first quarter, revenues rose 2% year over year (up 5% on a constant-currency or cc basis) to $2,158 million and surpassed the consensus mark of $2,129 million. This is mainly driven by the solid performance in its international businesses, particularly in the Asia Pacific region, continued growth in Europe and the North America direct-to-consumer business.

Direct-to-consumer revenues grew 8% year over year in the quarter, whereas Wholesale revenues fell 2% year over year. Revenues in the digital channel declined roughly 3% in the quarter under review.

The company's gross profit amounted to $1,250.3 million, up 0.9% year over year and surpassed our estimate of $1,240.8 million. The gross margin contracted 50 bps to 57.9% due to price increases, lower freight costs, and a favorable shift in regional and channel mix, which more than offset higher product costs and elevated inventory costs.

Selling, general and administrative expenses increased 2.4% year over year to $1,064 million. Earnings before interest and taxes totaled $199 million compared with $210 million in the prior-year quarter and our estimate of $252 million. This is mainly due to lower gross margins stemming from inventory costs. The metric also included $9 million of adverse foreign currency impacts.

Segmental Analysis

PVH Corp reports financial results under three segments — Calvin Klein, Tommy Hilfiger and Heritage Brands.

Revenues from the Calvin Klein segment moved up 1.3% year over year. Sales from Calvin Klein North America advanced 11.4%, while the same for Calvin Klein International rose 7.1%.

Revenues from the Tommy Hilfiger segment grew 5.2% year over year in the reported quarter. Revenues were up 13.2% at Tommy Hilfiger North America and the same rose 2.8% at Tommy Hilfiger International.

The Heritage Brands segment's revenues plunged 12% year over year in the quarter under review.

Financial Details

PVH Corp ended the quarter with cash and cash equivalents of $373.8 million, long-term debt of $2,193 million, and stockholders' equity of $5,126.4 million.

PVH Corp. Price, Consensus and EPS Surprise

 

PVH Corp. price-consensus-eps-surprise-chart | PVH Corp. Quote

Outlook

Management issued its second-quarter and fiscal 2023 views. For fiscal 2023, revenues are anticipated to grow 3-4% (up 2-3% on a cc basis). This is in sync with our estimate.

The bottom line is expected to be $10 for the year, whereas it reported $3.03 on a GAAP basis and $8.97 on an adjusted basis last year. The view includes a positive impact of 15 cents from favorable currency.

The operating margin is estimated to be 10%. Interest expenses are likely to be $100 million, suggesting an increase from the prior year’s reported figure of $83 million due to higher interest rates. Also, the effective tax rate is expected to be 24%.

For second-quarter fiscal 2023, management expects revenue growth in the low-single digits. The bottom line is likely to be $1.70, whereas it reported $1.72 in the year-ago quarter on a GAAP basis and $2.08 on an adjusted basis. This includes favorable currency impacts of 5 cents. Interest expenses for the fiscal first quarter are likely to be $25 million, whereas it posted $20 million in the year-ago period. The effective tax rate is expected to be 26%.

Other Stocks to Consider

Some other top-ranked companies are Crocs CROX, Royal Caribbean RCL and MGM Resorts MGM.

MGM Resorts currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 81%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MGM’s 2024 sales and EPS indicates increases of 2.2% and 31%, respectively, from those estimated for 2023.  

Royal Caribbean sports a Zacks Rank #1 at present. RCL has a trailing four-quarter earnings surprise of 26.4%, on average.

The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases 47.9% and 158.3%, respectively, from the year-ago period’s reported levels.

Crocs, which offers casual lifestyle footwear and accessories, presently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 15%.

The Zacks Consensus Estimate for Crocs’ current financial-year sales and earnings suggests growth of 13.1% and 2.8% from the year-ago period’s reported figure. CROX has a trailing four-quarter earnings surprise of 21.8%, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report

MGM Resorts International (MGM) : Free Stock Analysis Report

PVH Corp. (PVH) : Free Stock Analysis Report

Crocs, Inc. (CROX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research