PVH Corp. (PVH) Looks Impressive Post-Q1 Earnings: Here's Why
Zacks Investment Research | Jun 12, 2018 02:47AM ET
PVH Corp. (NYSE:PVH) is performing exceedingly well since the last several quarters, courtesy of its efforts to keep pace with the evolving consumer trends, efficient brand management and healthy cash flows. The company delivered 16th consecutive quarter of positive earnings surprise with seventh straight sales beat in first-quarter fiscal 2018. Management issued upbeat guidance for the fiscal second quarter and raised its earnings view for fiscal 2018.
Robust quarterly numbers as well as an optimistic view drove the company’s shares to nearly 7.1% since May 30, when it released earnings. Also, this Zacks Rank #3 (Hold) stock has surged a whopping 56.9% in a year, outperforming the industry ’s 46.6% rally.
Additionally, analysts are growing bullish on the stock as apparent from the uptrend in its earnings estimates. The Zacks Consensus Estimate of $2.10 for second-quarter fiscal 2018 and $9.19 for fiscal 2018 moved north 9 cents and 4 cents, respectively, in the last 30 days.
Management now envisions fiscal second-quarter adjusted earnings per share to be in the range of $2.05-$2.10, up from $1.69 in the year-ago quarter. Further, adjusted earnings per share for the fiscal year are anticipated in the band of $9.05-$9.15 compared with $9.00-$9.10 guided earlier. The raised view is significantly higher than $7.94 reported in fiscal 2017.
Moreover, PVH Corp’s long-term earnings growth rate of 12.8% and a VGM Score of A are quite impressive.
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PVH Corp. reported impressive first-quarter fiscal 2018 results, wherein both the top and bottom line surpassed the consensus estimates and improved year over year. While adjusted earnings per share registered substantial growth of 43% year over year, total revenues advanced 16.4%.
Results were fueled by the company’s robust strategies along with continued gains from solid momentum witnessed at its premium Calvin Klein and Tommy Hilfiger brands, particularly in international regions. Further, top-line growth stemmed from broad-based strength across PVH Corp.’s global businesses.
Currency tailwinds also contributed to the quarterly results. In fact, currency led to upbeat earnings outlook for second-quarter and fiscal 2018. Favorable currency is anticipated to drive adjusted earnings by 3 cents per share in the second quarter and 12 cents in fiscal 2018.
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Furthermore, PVH Corp.’s diversified brand portfolio allows it to stay ahead of its peers to generate above-average industry growth. The company’s approach toward brand management facilitates each of its brands to develop further through efficient marketing strategies, financial control and operating leverage. Based on the strength of many of its brands — particularly Tommy Hilfiger and Calvin Klein — and opportunities with regard to distribution, we believe that the company is well poised for long-term growth.
In addition, PVH Corp. boasts a healthy balance sheet that provides it with the financial flexibility to drive growth in the future. The company’s financial strength is evident from its ongoing share repurchase program. In 2017, PVH Corp. bought back 2.2 million shares for roughly $250 million under its $1.25 billion standing authorization that extends til Jun 3, 2020.
Bottom Line
While all these factors speak well about PVH Corp., the company operates in a highly fragmented market and faces intense competition. Additionally, volatility in the global environment concerns investors.
Nevertheless, we believe PVH Corp. will continue delivering sturdy performances going ahead driven by its robust strategies.
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Delta Apparel, Inc. (NYSE:DLA) pulled off an average positive earnings surprise of 71.2% in the last four quarters. The company sports a Zacks Rank #1 (Strong Buy). You can see Zacks Investment Research
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