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PVH (PVH) Down 1.4% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for PVH (PVH - Free Report) . Shares have lost about 1.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is PVH due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
PVH Corp Beats Earnings & Revenue Estimates in Q2
PVH Corp. posted better-than-expected second-quarter fiscal 2020 results. Results gained from well-chalked efforts, including cost-cutting actions, solid digital performance, improved inventory management and a strong financial position. Moreover, the initial trends for the fiscal third quarter have been improving across China and Europe. However, its North American business remains a drag due to the continued rise in COVID-19 cases and the absence of international tourists.
Although most of PVH Corp.’s stores are now operational, these are open for limited hours and at lower occupancy levels. This has somewhat affected the initial sales volume in the fiscal third quarter.
Q2 Highlights
PVH Corp. reported adjusted earnings of 13 cents per share, plunging 93.8% from $2.10 reported in the year-ago quarter. However, the figure surpassed the Zacks Consensus Estimate of a loss of $2.44 per share.
On a GAAP basis, the company delivered a loss per share of 72 cents against earnings of $2.58 reported in the year-ago quarter.
In the fiscal second quarter, revenues declined 33% to $1,581 million but exceeded the Zacks Consensus Estimate of $1,266 million. Sluggishness in Tommy Hilfiger, Calvin Klein and Heritage Brands businesses weighed on the top line.
Also, direct-to-consumer revenues declined 24% year over year in the fiscal second quarter. Although initial third-quarter to-date sales have declined 15%, the company noted that trends have been improving on a sequential basis in the direct-to-consumer channel. Meanwhile, the company’s digital sales surged more than 50% year over year owing to strong online sales growth in all regions, even after the reopening of stores.
Moreover, wholesale revenues fell 40% in the fiscal second quarter as the majority of wholesale stores remain closed during the first month of the reported quarter that led to significant declines in shipments.
The company’s total gross profit decreased nearly 31.4% to $883.3 million, while gross margin expanded 140 basis points to 55.9%. Further, adjusted SG&A expenses dropped 22.5% to $834.5 million in the quarter under review.
Adjusted earnings before interest and taxes were $49 million, significantly down from $232 million in the last-year quarter. The downside can be attributable to a dismal top line, stemming from COVID-19 impacts.
Segment Analysis
PVH Corp. reports financial results under three segments — Calvin Klein, Tommy Hilfiger and Heritage Brands.
Revenues at Calvin Klein plunged 32% year over year with Calvin Klein North America and International declining 51% and 16%, respectively.
Revenues at the Tommy Hilfiger segment declined 28% year over year in the reported quarter. Further, Tommy Hilfiger North America and International fell 51% and 14%, respectively.
The Heritage Brands segment’s revenues fell 51% year over year during the quarter under review.
Financial Details
PVH Corp. ended the fiscal second quarter with cash of approximately $1.4 billion. Also, it boasts a revolving credit facility of $1.3 billion. Earlier, management suspended share repurchases and cash dividends due to COVID-19 impacts.
Looking Ahead
The company highlighted that all furloughed employees have got back to work from the third quarter. Also, it lowered discretionary spending in response to adverse COVID-19 impacts. However, management is incurring additional costs related to the implementation of safety measures, which is likely to continue in the second half of fiscal 2020. Apart from these, the company is making efforts to streamline its North American operations as per the ongoing retail environment, by exiting the Heritage Brands Retail business by mid-2021 and cutting jobs by roughly 450 or 12% across all businesses and corporate offices.
That said, it expects the top and bottom lines in the second half of fiscal 2020 to be hurt by COVID-19 impacts, with a revenue decline of nearly 25% year over year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -88.96% due to these changes.
VGM Scores
Currently, PVH has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, PVH has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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PVH (PVH) Down 1.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for PVH (PVH - Free Report) . Shares have lost about 1.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is PVH due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
PVH Corp Beats Earnings & Revenue Estimates in Q2
PVH Corp. posted better-than-expected second-quarter fiscal 2020 results. Results gained from well-chalked efforts, including cost-cutting actions, solid digital performance, improved inventory management and a strong financial position. Moreover, the initial trends for the fiscal third quarter have been improving across China and Europe. However, its North American business remains a drag due to the continued rise in COVID-19 cases and the absence of international tourists.
Although most of PVH Corp.’s stores are now operational, these are open for limited hours and at lower occupancy levels. This has somewhat affected the initial sales volume in the fiscal third quarter.
Q2 Highlights
PVH Corp. reported adjusted earnings of 13 cents per share, plunging 93.8% from $2.10 reported in the year-ago quarter. However, the figure surpassed the Zacks Consensus Estimate of a loss of $2.44 per share.
On a GAAP basis, the company delivered a loss per share of 72 cents against earnings of $2.58 reported in the year-ago quarter.
In the fiscal second quarter, revenues declined 33% to $1,581 million but exceeded the Zacks Consensus Estimate of $1,266 million. Sluggishness in Tommy Hilfiger, Calvin Klein and Heritage Brands businesses weighed on the top line.
Also, direct-to-consumer revenues declined 24% year over year in the fiscal second quarter. Although initial third-quarter to-date sales have declined 15%, the company noted that trends have been improving on a sequential basis in the direct-to-consumer channel. Meanwhile, the company’s digital sales surged more than 50% year over year owing to strong online sales growth in all regions, even after the reopening of stores.
Moreover, wholesale revenues fell 40% in the fiscal second quarter as the majority of wholesale stores remain closed during the first month of the reported quarter that led to significant declines in shipments.
The company’s total gross profit decreased nearly 31.4% to $883.3 million, while gross margin expanded 140 basis points to 55.9%. Further, adjusted SG&A expenses dropped 22.5% to $834.5 million in the quarter under review.
Adjusted earnings before interest and taxes were $49 million, significantly down from $232 million in the last-year quarter. The downside can be attributable to a dismal top line, stemming from COVID-19 impacts.
Segment Analysis
PVH Corp. reports financial results under three segments — Calvin Klein, Tommy Hilfiger and Heritage Brands.
Revenues at Calvin Klein plunged 32% year over year with Calvin Klein North America and International declining 51% and 16%, respectively.
Revenues at the Tommy Hilfiger segment declined 28% year over year in the reported quarter. Further, Tommy Hilfiger North America and International fell 51% and 14%, respectively.
The Heritage Brands segment’s revenues fell 51% year over year during the quarter under review.
Financial Details
PVH Corp. ended the fiscal second quarter with cash of approximately $1.4 billion. Also, it boasts a revolving credit facility of $1.3 billion. Earlier, management suspended share repurchases and cash dividends due to COVID-19 impacts.
Looking Ahead
The company highlighted that all furloughed employees have got back to work from the third quarter. Also, it lowered discretionary spending in response to adverse COVID-19 impacts. However, management is incurring additional costs related to the implementation of safety measures, which is likely to continue in the second half of fiscal 2020. Apart from these, the company is making efforts to streamline its North American operations as per the ongoing retail environment, by exiting the Heritage Brands Retail business by mid-2021 and cutting jobs by roughly 450 or 12% across all businesses and corporate offices.
That said, it expects the top and bottom lines in the second half of fiscal 2020 to be hurt by COVID-19 impacts, with a revenue decline of nearly 25% year over year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -88.96% due to these changes.
VGM Scores
Currently, PVH has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, PVH has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.