PVH Shares Climb After Q3 Earnings Beat, Raised Outlook
The parent company of Calvin Klein and Tommy Hilfiger lifted the low end of its full-year profit forecast, signaling resilience amid a challenging global retail environment.
PVH Corp. (NYSE: PVH) shares gained traction in Tuesday trading after the global apparel giant reported third-quarter earnings that surpassed analyst expectations and raised the lower end of its full-year profit guidance, signaling confidence in its performance heading into the crucial holiday season.
The owner of the iconic Calvin Klein and Tommy Hilfiger brands saw its stock rise by 3.32% to $87.55 by the market close, as investors reacted positively to the company’s operational execution in what management described as a "choppy macroeconomic backdrop."
For the third quarter, PVH posted non-GAAP earnings per share of $2.83, decisively beating the Wall Street consensus of $2.54 by 11.4%. Revenue for the period was $2.29 billion, a slight but reassuring beat against estimates of $2.28 billion. The performance was driven by what the company termed the disciplined execution of its PVH+ Plan, a multi-year strategy focused on brand elevation and direct-to-consumer channels.
In a statement, CEO Stefan Larsson highlighted the strength of the company's core brands. "We continued to leverage the iconic brand strength of Calvin Klein and TOMMY HILFIGER, achieving growth in our core lifestyle categories powered by expanded product innovation and impactful marketing," Larsson said, according to a company press release. He noted that Calvin Klein saw growth in essentials like underwear and fashion denim, while Tommy Hilfiger gained traction by elevating its classic style icons.
Looking ahead, PVH narrowed its full-year non-GAAP EPS outlook to a range of $10.85 to $11.00. While the high end remained unchanged, the company raised the low end from its previous forecast of $10.75, a move that suggests a solid floor under its profitability expectations. The company reaffirmed its full-year operating margin guidance at approximately 8.5%.
The results provide a mixed but ultimately positive picture of the global consumer landscape. PVH cited a better-than-expected performance in the Asia-Pacific region, particularly in China, which helped offset a more challenging environment in Europe. The company acknowledged a "tougher backdrop entering the fall" in its European markets but noted an encouraging start to the holiday season in both Europe and North America during Black Friday week.
The performance reflects PVH's ongoing efforts to navigate a complex retail world marked by shifting consumer behaviors, inflationary pressures, and geopolitical uncertainty. The company has focused on improving its supply chain, enhancing its digital footprint, and engaging more directly with its customers—key pillars of the PVH+ Plan.
Analysts hold a consensus "Moderate Buy" rating on the stock, with an average price target of $96.71, suggesting further potential upside. With a forward price-to-earnings ratio of approximately 6.8, some investors may see the stock as undervalued relative to its earnings potential, especially if it continues to execute on its strategic initiatives despite broader economic headwinds.