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Will Solid Brand Portfolio Aid PVH Corp's (PVH) Q2 Earnings?
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PVH Corporation (PVH - Free Report) is slated to release its second-quarter fiscal 2018 results on Aug 29. Notably, the company has an impressive surprise history with 16 straight quarters of earnings beat and seven consecutive positive sales surprise.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $2.11, which moved north in the last seven days and reflects an improvement of roughly 25% year over year. Management envisions adjusted earnings per share in the range of $2.05-$2.10, up from $1.69 in the year-ago quarter. Notably, earnings guidance includes nearly 3 cents per share gain from foreign currency.
Let’s see how things are shaping up prior to this announcement.
Factors Likely to Influence 2Q18
PVH Corp has been gaining solid momentum on the back of its premium Calvin Klein and Tommy Hilfiger brands, particularly in international regions. Impressively, the company’s approach toward brand management helps each of its brands to develop further through efficient marketing strategies, financial control and operating leverage. Currency tailwinds are favoring the company’s performance as well. These, in turn, are likely to boost second-quarter results.
While the company expects total revenues to increase nearly 10% year over year in the to-be-reported quarter, it is anticipated to advance 9% on a constant-currency basis. Brand-wise, revenues are expected to grow 15% (or 14% on a currency-neutral basis) at Calvin Klein, 13% (or 12% on a currency-neutral basis) at Tommy Hilfiger and 4% at Heritage Brands. The Zacks Consensus Estimate for revenues stands at $2.28 billion, mirroring growth of more than 10% year over year.
Further, net interest expenses are anticipated to remain flat at $30 million in the fiscal second quarter. The effective tax rate for the quarter is expected to be 19-20%, including the planned impact of the tax legislation. On a GAAP basis, the company envisions earnings per share of $1.98-$2.03 compared with $1.52 in the prior-year quarter.
PVH Corp recently launched an integrated e-commerce site for its Heritage Brands, which allows cross-brand shopping. These sites include — IZOD.com, VanHeusen.com and styleBureau.com — which enable customers to shop from the IZOD and Van Heusen brands via a single shopping platform. As a result, customers’ shopping experience is expected to improve, resulting in higher sales. We believe that the launch of this website will not only drive the Heritage Brands’ revenues but also boost the company’s overall profitability.
However, PVH Corp operates in a highly fragmented market and faces intense competition, which along with volatility in the global environment remain major concerns. This, in turn, might hurt the company’s growth and profitability.
Zacks Model
Our proven model conclusively shows that PVH Corp is likely to beat earnings estimates in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
PVH Corp has an Earnings ESP of +0.30% and a Zacks Rank #3, thus making us confident of an earnings beat.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Abercrombie & Fitch Co. (ANF - Free Report) has an Earnings ESP of +78.57% and a Zacks Rank of 3.
American Eagle Outfitters, Inc. (AEO - Free Report) has an Earnings ESP of +2.44% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Will Solid Brand Portfolio Aid PVH Corp's (PVH) Q2 Earnings?
PVH Corporation (PVH - Free Report) is slated to release its second-quarter fiscal 2018 results on Aug 29. Notably, the company has an impressive surprise history with 16 straight quarters of earnings beat and seven consecutive positive sales surprise.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $2.11, which moved north in the last seven days and reflects an improvement of roughly 25% year over year. Management envisions adjusted earnings per share in the range of $2.05-$2.10, up from $1.69 in the year-ago quarter. Notably, earnings guidance includes nearly 3 cents per share gain from foreign currency.
PVH Corp. Price, Consensus and EPS Surprise
PVH Corp. Price, Consensus and EPS Surprise | PVH Corp. Quote
Let’s see how things are shaping up prior to this announcement.
Factors Likely to Influence 2Q18
PVH Corp has been gaining solid momentum on the back of its premium Calvin Klein and Tommy Hilfiger brands, particularly in international regions. Impressively, the company’s approach toward brand management helps each of its brands to develop further through efficient marketing strategies, financial control and operating leverage. Currency tailwinds are favoring the company’s performance as well. These, in turn, are likely to boost second-quarter results.
While the company expects total revenues to increase nearly 10% year over year in the to-be-reported quarter, it is anticipated to advance 9% on a constant-currency basis. Brand-wise, revenues are expected to grow 15% (or 14% on a currency-neutral basis) at Calvin Klein, 13% (or 12% on a currency-neutral basis) at Tommy Hilfiger and 4% at Heritage Brands. The Zacks Consensus Estimate for revenues stands at $2.28 billion, mirroring growth of more than 10% year over year.
Further, net interest expenses are anticipated to remain flat at $30 million in the fiscal second quarter. The effective tax rate for the quarter is expected to be 19-20%, including the planned impact of the tax legislation. On a GAAP basis, the company envisions earnings per share of $1.98-$2.03 compared with $1.52 in the prior-year quarter.
PVH Corp recently launched an integrated e-commerce site for its Heritage Brands, which allows cross-brand shopping. These sites include — IZOD.com, VanHeusen.com and styleBureau.com — which enable customers to shop from the IZOD and Van Heusen brands via a single shopping platform. As a result, customers’ shopping experience is expected to improve, resulting in higher sales. We believe that the launch of this website will not only drive the Heritage Brands’ revenues but also boost the company’s overall profitability.
However, PVH Corp operates in a highly fragmented market and faces intense competition, which along with volatility in the global environment remain major concerns. This, in turn, might hurt the company’s growth and profitability.
Zacks Model
Our proven model conclusively shows that PVH Corp is likely to beat earnings estimates in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
PVH Corp has an Earnings ESP of +0.30% and a Zacks Rank #3, thus making us confident of an earnings beat.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Dollar Tree, Inc. (DLTR - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Abercrombie & Fitch Co. (ANF - Free Report) has an Earnings ESP of +78.57% and a Zacks Rank of 3.
American Eagle Outfitters, Inc. (AEO - Free Report) has an Earnings ESP of +2.44% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>