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Factors Likely to Decide PVH Corp's (PVH) Fate in Q1 Earnings

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PVH Corporation (PVH - Free Report) is expected to register year-over-year top and bottom-line declines when it reports first-quarter fiscal 2022 results  on Jun 1. The Zacks Consensus Estimate for the company’s fiscal first-quarter earnings is pegged at $1.58 per share, suggesting decline of 17.7% from the year-ago quarter’s reported figure. The consensus mark for earnings has been unchanged in the past 30 days. The consensus mark for quarterly revenues is pinned at $2.1 billion, indicating decline of 0.03% from the prior-year reported number.

In the last reported quarter, the company delivered an earnings surprise of 43.4%. Its bottom line surpassed estimates by 83.8%, on average, over the trailing four quarters.

Factors to Note

PVH Corp has been gaining from brand strength, particularly Calvin Klein and Tommy Hilfiger driven by robust consumer demand. Some other notable efforts, including Calvin Klein’s spring collection launch and all-together campaign, global Tommy Jeans AAPE by A Bathing Ape collaboration as well as partnership with the online game platform Roblox, are likely to have acted as upsides. These, along with continued momentum in the international unit, are likely to have aided the company’s performance in the fiscal first quarter.

PVH has been witnessing momentum in the digital business as customers shifted to online purchases. A solid online show, investments in omni-channel capabilities, improved inventory and better customer engagement bodes well. The company’s initiatives to expand its direct-to-consumer digital business and strengthen its network with third-party digital partners are expected to have contributed to digital sales growth in the fiscal first quarter.

However, PVH Corp has been witnessing uncertainty stemming from the war in Ukraine and other macroeconomic challenges, including inflation and continued impacts of the COVID-19 pandemic. Supply-chain disruptions, including transportation shortages, labor shortages and port congestion are likely to have led to production and delivery delays across stores and online. Also, continued sluggishness in the North America unit remains concerning.

On its last earnings call, management expected first-quarter fiscal 2022 revenues to remain flat year over year (up 4% on a cc basis). This compares unfavorably with 55% growth (up 46% on a cc basis) reported in the prior year. The outlook also includes a 5% reduction each for the exit of the Heritage Brands Retail business along with a 1% reduction stemming from temporary store closures and the halt of commercial activities in Russia and Belarus, as well as lower wholesale shipments to Ukraine. The bottom line was envisioned to be $1.55-$1.60 per share, whereas it reported $1.92 on a non-GAAP basis in the year-ago quarter.

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Zacks Model

Our proven model does not conclusively predict an earnings beat for PVH Corp this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

PVH Corp has a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

WillScot Mobile Mini (WSC - Free Report) currently has an Earnings ESP of +3.51% and a Zacks Rank #2. WSC is anticipated to register top-line growth when it reports second-quarter 2022 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.2 billion, indicating an improvement of 13.8% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Also, the Zacks Consensus Estimate for WillScot Mobile Mini’s bottom line moved up 11.5% in the past 30 days at $2.29 per share. The metric reflects growth of 107.1% from the year-ago quarter. WSC has delivered an earnings beat of 7.4%, on average, in the trailing four quarters.

lululemon athletica (LULU - Free Report) has an Earnings ESP of +0.28% and a Zacks Rank of 3 at present. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2022. The Zacks Consensus Estimate for quarterly earnings moved up 2.1% to $1.43 per share in the past 30 days, suggesting an increase of 23.3% from the year-ago quarter’s reported number.

Lululemon’s top line is also expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.55 billion, which suggests a rise of 26% from the figure reported in the prior-year quarter. LULU has delivered an earnings beat of 0.3%, on average, in the trailing four quarters.

Vail Resorts (MTN - Free Report) has an Earnings ESP of +1.00% and it currently sports a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports third-quarter fiscal 2022. The Zacks Consensus Estimate for quarterly earnings moved up 0.3% in the past 30 days to $9.13 per share, suggesting 35.9% growth from the year-ago quarter’s reported number.

Vail Resorts’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.15 billion, which suggests a rise of nearly 29.7% from the figure reported in the prior-year quarter. MTN has delivered an earnings beat of 1.7%, on average, in the trailing four quarters.

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