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PVH Corp on Track to Fortify Financial Position Amid Coronavirus
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With the coronavirus spread growing each day, companies are getting more cautious about its potential impact on their financial performance. Incidentally, many companies are adopting various measures to enhance their financial position and sail through the tough times. PVH Corp. (PVH - Free Report) is one such name, which announced several proactive steps to cut down on expenses and protect its cash position.
To this end, management announced the suspension of cash compensation for board members during the crisis period. Further, the company announced a reduction in salary and compensation for other executives and workers. PVH Corp. has also kept all hiring plans on hold and informed that it will not make any merit increments in 2020.
Moreover, PVH Corp. has taken actions that are likely to lead to furloughing or reduced working hours for about 75% of store, warehouse and office associates in North America, wherein the company has most of its workforce. While employees with reduced working hours will be paid accordingly, furloughed workers will not receive any pay.
Apart from this, the company is curtailing capital expenditure, marketing spends and other discretionary expenses. It is also undertaking tough inventory management with an aim to lower working capital. Additionally, to enhance financial flexibility amid the pandemic, PVH Corp. has drawn $750 million from its revolving credit facility of more than $1 billion. It has also suspended share buybacks alongside terminating cash dividends from the second quarter of fiscal 2020. Also, it concluded the divestiture of its Speedo North America business licenses to Pentland Group for $170 million in cash.
Certainly, the company is leaving no stone unturned to stay firm amid the crisis situation. Coronavirus, which has infected more than a million people worldwide, claiming more than 70,000 lives, has endangered the global economy. Retailers are bearing the brunt of store closures, limited hours of operations, lower traffic and supply-chain hiccups.
To this end, PVH Corp. had notified about store closures in North America and Europe in its Mar 16 press release. In the latest release, the company informed that most of its Asian stores have reopened, though they are operating for limited hours and with lower traffic. Meanwhile, all stores are shut in Brazil and Australia, while Europe also has most of its stores closed. Well, many other companies like Guess? (GES - Free Report) , Ralph Lauren (RL - Free Report) and Columbia Sportswear (COLM - Free Report) , to name a few, have resorted to store closures amid the deadly virus spread.
Nevertheless, PVH Corp. earlier said that customers can continue to shop at its online sites — Tommy.com, CalvinKlein.com, VanHeusen.com, Izod.com, styleBureau.com and SpeedoUSA.com.
We note that this Zacks Rank #5 (Strong Sell) stock has plummeted 55.6% so far this year compared with the industry’s decline of 42.1%.
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
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PVH Corp on Track to Fortify Financial Position Amid Coronavirus
With the coronavirus spread growing each day, companies are getting more cautious about its potential impact on their financial performance. Incidentally, many companies are adopting various measures to enhance their financial position and sail through the tough times. PVH Corp. (PVH - Free Report) is one such name, which announced several proactive steps to cut down on expenses and protect its cash position.
To this end, management announced the suspension of cash compensation for board members during the crisis period. Further, the company announced a reduction in salary and compensation for other executives and workers. PVH Corp. has also kept all hiring plans on hold and informed that it will not make any merit increments in 2020.
Moreover, PVH Corp. has taken actions that are likely to lead to furloughing or reduced working hours for about 75% of store, warehouse and office associates in North America, wherein the company has most of its workforce. While employees with reduced working hours will be paid accordingly, furloughed workers will not receive any pay.
Apart from this, the company is curtailing capital expenditure, marketing spends and other discretionary expenses. It is also undertaking tough inventory management with an aim to lower working capital. Additionally, to enhance financial flexibility amid the pandemic, PVH Corp. has drawn $750 million from its revolving credit facility of more than $1 billion. It has also suspended share buybacks alongside terminating cash dividends from the second quarter of fiscal 2020. Also, it concluded the divestiture of its Speedo North America business licenses to Pentland Group for $170 million in cash.
Certainly, the company is leaving no stone unturned to stay firm amid the crisis situation. Coronavirus, which has infected more than a million people worldwide, claiming more than 70,000 lives, has endangered the global economy. Retailers are bearing the brunt of store closures, limited hours of operations, lower traffic and supply-chain hiccups.
To this end, PVH Corp. had notified about store closures in North America and Europe in its Mar 16 press release. In the latest release, the company informed that most of its Asian stores have reopened, though they are operating for limited hours and with lower traffic. Meanwhile, all stores are shut in Brazil and Australia, while Europe also has most of its stores closed. Well, many other companies like Guess? (GES - Free Report) , Ralph Lauren (RL - Free Report) and Columbia Sportswear (COLM - Free Report) , to name a few, have resorted to store closures amid the deadly virus spread.
Nevertheless, PVH Corp. earlier said that customers can continue to shop at its online sites — Tommy.com, CalvinKlein.com, VanHeusen.com, Izod.com, styleBureau.com and SpeedoUSA.com.
We note that this Zacks Rank #5 (Strong Sell) stock has plummeted 55.6% so far this year compared with the industry’s decline of 42.1%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
See 5 Stocks Set to Double>>