Back to top

Analyst Blog

We expect textile-apparel company PVH Corp. (PVH - Free Report) to beat expectations when it reports third-quarter fiscal 2016 results on Nov 30.

Last quarter, the company reported a positive surprise of 14.8%. In fact, the bottom line has outperformed the Zacks Consensus Estimate for nine straight quarters now, by an average of 7.9% in the trailing four quarters. Let’s see how things are shaping up for this announcement.

PVH CORP Price and EPS Surprise
 

PVH CORP Price and EPS Surprise | PVH CORP Quote

Why a Likely Positive Surprise?

Our proven model shows that PVH Corp. may beat earnings because it has the right combination of the two key components.

Zacks ESP: PVH Corp. currently has an Earnings ESP of +0.42%. This is because the Most Accurate estimate is at $2.42, while the Zacks Consensus Estimate is pegged lower at $2.41. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: PVH Corp. carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings. Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.

The combination of PVH Corp.’s Zacks Rank #2 and positive ESP makes us reasonably confident of a positive earnings beat.

What's Driving the Better-than-Expected Earnings?

PVH Corp. has been gaining from the solid performance of its premium Calvin Klein and Tommy Hilfiger brands, which helped it to deliver strong results even amid tough macroeconomic conditions in the last quarter. Apart from this, PVH Corp.’s solid business strategies and ongoing investments in top-quality brands, along with its focus on global expansion bode well. Further, the company’s focus on higher-margin businesses through acquisitions and divestments bodes well. In fact, despite the currency turmoil and a tough retail scenario, management’s confidence in its robust strategies encouraged it to raise its fiscal 2016 outlook, thus ushering in confidence about the upcoming results.

Other Stocks that Warrant a Look

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:

Sanderson Farms, Inc. (SAFM - Free Report) has an Earnings ESP of +4.48% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ascena Retail Group Inc. (ASNA - Free Report) has an Earnings ESP of +14.29% and a Zacks Rank #3 (Hold).

Express Inc. (EXPR - Free Report) has an Earnings ESP of + 16.67% and a Zacks Rank #3.

Zacks' Top Investment Ideas for Long-Term Profit

How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>