Company Performance - PVH reported quarterly earnings of $2.30 per share, exceeding the Zacks Consensus Estimate of $2.24 per share, but down from $2.45 per share a year ago, representing an earnings surprise of 2.68% [1] - The company posted revenues of $1.98 billion for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 2.49% and showing a slight increase from $1.95 billion year-over-year [2] - Over the last four quarters, PVH has consistently surpassed consensus EPS and revenue estimates [2] Stock Performance - PVH shares have declined approximately 22% since the beginning of the year, contrasting with the S&P 500's gain of 1.5% [3] - The current Zacks Rank for PVH is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $2.54 on revenues of $2.08 billion, and for the current fiscal year, it is $12.59 on revenues of $8.72 billion [7] - The outlook for the Textile - Apparel industry, where PVH operates, is currently in the bottom 27% of over 250 Zacks industries, which may impact stock performance [8]

Revenue Performance - Total revenue for 2024 was $8.7 billion, with over 70% generated outside the United States, and TOMMY HILFIGER and Calvin Klein brands together accounted for over 95% of revenue [144]. - In the first quarter of 2025, revenue was $1.984 billion, a 2% increase from $1.952 billion in the same period of 2024 [162]. - Approximately 6% of revenue and 20% of income before interest and taxes were generated in China in 2024, with ongoing investigations by China's Ministry of Commerce posing potential risks [146]. - EMEA revenue increased by $45 million, or 5%, driven by growth in wholesale and direct-to-consumer businesses [164]. - Americas revenue increased by $39 million, or 7%, with a negative impact of $5 million, or 1%, from foreign currency translation [164]. - APAC revenue decreased by $51 million, or 13%, primarily due to a challenging consumer environment and a decline related to the Lunar New Year shopping period [164]. Financial Charges and Expenses - The company recorded pre-tax noncash goodwill and other intangible impairment charges of $480 million in Q1 2025 due to increased discount rates [154]. - Selling, general and administrative expenses in Q1 2025 were $1.024 billion, representing 51.6% of revenue, a slight decrease from 52.1% in Q1 2024 [162]. - The effective tax rate for Q1 2025 was 87.2%, compared to 19.2% in Q1 2024, reflecting significant losses [162]. - Gross profit for Q1 2025 was $1.162 billion, or 58.6% of total revenue, down from $1.199 billion, or 61.4% in Q1 2024 [168]. - The company expects a gross margin decrease of approximately 250 basis points for the full year 2025 compared to 2024 [169]. - Noncash impairment charges of $480 million were recorded in Q1 2025, including $426 million related to goodwill [173]. Cash Flow and Capital Management - Cash and cash equivalents decreased by $557 million to $191 million as of May 4, 2025, primarily due to stock repurchase activities [186]. - Cash used by operating activities was $71 million in Q1 2025, relatively flat compared to $67 million in Q1 2024 [189]. - Capital expenditures in Q1 2025 were $27 million, down from $39 million in Q1 2024, with a projected total of approximately $200 million for the full year 2025 [194]. - Cash dividends paid on common stock totaled $2 million in both Q1 2025 and Q1 2024, with a projected total of approximately $8 million for 2025 [195]. - The company completed the sale of women's intimates businesses for net proceeds of $156 million in Q4 2023, with an additional $10 million earnout received in Q1 2024 [192]. - The company repurchased $500 million of common stock under an ASR agreement, receiving approximately 4.6 million shares at a price of $76.43 per share [197]. Debt and Financing - As of May 4, 2025, the company had $115 million of borrowings outstanding under the commercial paper program as of May 4, 2025, with a weighted average interest rate of 5.15% [203]. - The company entered into delayed draw term loan facilities with aggregate commitments of $700 million, maturing in April 2026 [204]. - The company maintained compliance with all applicable financial and non-financial covenants under its financing arrangements as of May 4, 2025 [218]. - The issuer credit rating was BBB- by Standard & Poor's and Baa3 by Moody's, both with a positive outlook as of May 4, 2025 [219]. Foreign Currency Impact - The company anticipates that the translational impact of foreign currency on 2025 revenue and net income will be immaterial compared to 2024 [157]. - During the thirteen weeks ended May 4, 2025, the company recognized favorable foreign currency translation adjustments of $234 million, primarily due to a 9% weakening of the United States dollar against the euro [226]. - A 10% change in foreign currency exchange rates against the United States dollar would result in a change in the fair value of foreign currency forward contracts of approximately $110 million [229]. - The company designated €1.125 billion of senior notes as net investment hedges against its investments in foreign subsidiaries using the euro as their functional currency [230]. - A 10% change in the euro against the United States dollar would result in a change in the fair value of net investment hedges of approximately $180 million [231]. Pension and Benefit Costs - A 1% change in the assumed rate of return on pension plan assets would result in a change to 2025 net benefit cost of approximately $4 million [232]. - A 0.25% change in the assumed discount rate would result in a change to 2025 net benefit cost of approximately $16 million [232]. Strategic Initiatives - The PVH+ Plan aims to enhance the desirability of Calvin Klein and TOMMY HILFIGER, positioning PVH as a top-performing brand group in the sector [145]. - The transition of previously licensed women's product categories in-house is expected to result in a less than 1% increase in revenue and a 50 basis point decline in gross margin in 2025 [156]. - The company expects equity in net income of unconsolidated affiliates for full year 2025 to be relatively flat compared to 2024 [178].

Revenue Performance - Q1 2025 revenue increased 2% to $1.984 billion, exceeding guidance of flat to a decrease of 2%[5] - The Company reported revenue of $1,983.6 million for the quarter ended May 4, 2025, compared to $1,951.9 million for the same quarter in 2024, representing a year-over-year increase of approximately 1.6%[31] - Total revenue for the quarter was $1,983.6 million, a slight increase of 1.6% compared to $1,951.9 million in the same quarter last year[43] - EMEA revenue increased 5% and Americas revenue increased 7% in Q1 2025, while APAC revenue decreased 13%[9] - Revenue by segment showed growth in EMEA at $927.7 million, up from $882.9 million, while the Asia-Pacific segment declined to $351.7 million from $402.5 million[43] - Tommy Hilfiger brand revenue increased by 3.4% to $1,048.1 million, while Calvin Klein remained relatively stable with a slight decrease of 0.1%[49] - Direct-to-Consumer revenue decreased by 3.4% to $816.5 million, driven by a 4.9% decline in owned and operated retail stores[49] Earnings and Profitability - Non-GAAP EPS for Q1 2025 was $2.30, surpassing guidance of $2.10 to $2.25[5] - Full year 2025 EPS projected to be in the range of $10.75 to $11.00, down from previous guidance of $12.40 to $12.75[5] - Gross margin for Q1 2025 was 58.6%, down from 61.4% in the prior year period[16] - Gross profit for the quarter was $1,161.7 million, down from $1,198.7 million in the prior year, indicating a decrease of about 3.1%[31] - Earnings before interest and taxes (EBIT) on a non-GAAP basis was $160.5 million, down from $195.1 million year-over-year[36] - The net loss for the quarter was $44.8 million, compared to a net income of $151.4 million in the prior year, reflecting a significant decline[31] - The diluted net loss per common share was $0.88 for the quarter, compared to diluted net income per share of $2.59 in the same quarter of the previous year[31] Financial Position and Cash Flow - Cash and cash equivalents decreased to $191.0 million from $376.2 million year-over-year, indicating liquidity challenges[41] - The company’s total assets decreased to $10,672.4 million from $10,788.7 million, reflecting a decline in overall financial position[41] - Inventory increased 19% compared to the prior year, driven by investments in core product availability[16] Costs and Expenses - Selling, general and administrative expenses were $1,023.9 million for the quarter, slightly up from $1,017.3 million in the same quarter last year[31] - SG&A expenses on a non-GAAP basis were reported at $1,010.7 million, compared to $1,023.9 million in the previous year[36] - The Company incurred pre-tax restructuring costs totaling $24 million in 2024, primarily related to severance and the sale of a warehouse and distribution center[27] - The Company recognized $28 million in actuarial losses on retirement plans and $24 million in restructuring costs related to Growth Driver 5 Actions[50] Strategic Initiatives and Outlook - Full year 2025 revenue outlook reaffirmed as flat to slightly increase, with projected operating margin around 8.5%[23] - The Company emphasizes the importance of non-GAAP financial measures to provide a clearer view of ongoing operations, excluding non-recurring and non-operational amounts[33] - The Company plans to simplify its operating model through a multi-year initiative, which includes centralizing processes and improving systems[28] - Forward-looking statements regarding future revenue and earnings are subject to risks and uncertainties, including economic conditions and changes in consumer sentiment[28] - Estimated net negative impact of tariffs on full year 2025 EBIT is approximately $65 million, or $1.05 per share[15] Impairments and Charges - The Company recorded pre-tax noncash goodwill and other intangible asset impairment charges of $480 million in the first quarter of 2025, primarily due to a significant increase in discount rates[27] - Goodwill and other intangible asset impairments amounted to $479.5 million for the quarter, significantly impacting net income[37] - Effective tax rate for Q1 2025 was 87.2% on a GAAP basis, influenced by non-deductible impairment charges[16]

PVH Corp. PVH, owner of brands such as Tommy Hilfiger and Calvin Klein, will release earnings results for the first quarter, after the closing bell on Wednesday, June 4. Analysts expect the New York-based company to report quarterly earnings at $2.25 per share, down from $2.45 per share in the year-ago period. PVH projects to report quarterly revenue at $1.93 billion, compared to $1.95 billion a year earlier, according to data from Benzinga Pro. On May 30, Needham analyst Tom Nikic initiated coverage on PVH ...

Core Viewpoint - PVH Corporation is expected to report a decline in both revenue and earnings for the first quarter of fiscal 2025, with revenues estimated at $1.9 billion, reflecting a 0.8% decrease year-over-year, and earnings per share projected at $2.23, indicating a decline of approximately 9% year-over-year [1][2]. Financial Performance - The company had an earnings surprise of 2.5% in the last reported quarter, with an average trailing four-quarter earnings surprise of 16.4% [2]. - Management previously anticipated revenues to be flat to down 2% year-over-year, with a gross margin contraction of about 250 basis points due to increased freight costs and discounts related to product delays [4]. - Interest expenses are expected to rise to $20 million compared to $18 million in the first quarter of 2024 [4]. Segment Performance - The Heritage Brands segment has been experiencing sluggishness, particularly in the women's intimates business, which has negatively impacted sales and earnings [3]. - The wholesale channel is under pressure due to declining sales in the Heritage Brands women's intimates business and efforts to reduce sales in Europe [3][5]. Market Conditions - Higher raw material costs and currency headwinds are anticipated to have adversely affected profitability [2]. - Increased investments in direct-to-consumer and international businesses have added to costs, further impacting margins [2]. Strategic Initiatives - PVH's PVH+ Plan aims to accelerate growth by enhancing core strengths and connecting key brands with consumers, which may provide some support to quarterly performance [6]. Valuation Metrics - PVH shares are trading at a forward 12-month price-to-earnings ratio of 6.47X, below the five-year median of 8.92X and the industry average of 12.72X, indicating an attractive investment opportunity [9]. - Over the past three months, PVH's shares have gained 19.1%, contrasting with a 6.5% decline in the industry [10].

Core Viewpoint - The upcoming earnings report from PVH is anticipated to show a decline in quarterly earnings and revenues compared to the previous year, with analysts adjusting their estimates slightly upward in recent weeks [1][2]. Financial Performance Estimates - Quarterly earnings are expected to be $2.23 per share, reflecting a 9% decrease year over year [1]. - Revenue is forecasted at $1.94 billion, indicating a slight decline of 0.8% compared to the same quarter last year [1]. Analyst Revisions - Over the last 30 days, the consensus EPS estimate has been revised upward by 1.1%, suggesting a collective reassessment by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Breakdown by Brand - Revenue for Tommy Hilfiger is projected to reach $1.02 billion, representing a year-over-year increase of 0.5% [4]. - Total revenue for Calvin Klein is estimated at $876.14 million, indicating a decrease of 1.2% year over year [5]. - Heritage Brands Wholesale revenue is expected to be $43.23 million, reflecting a significant decline of 16.5% from the prior year [5]. - Tommy Hilfiger North America revenue is forecasted at $297.79 million, with a slight increase of 0.4% year over year [5]. - Calvin Klein North America revenue is estimated at $288.91 million, showing a growth of 1.3% from the previous year [6]. - Calvin Klein International revenue is projected at $587.23 million, indicating a decrease of 2.4% year over year [6]. - Tommy Hilfiger International revenue is expected to reach $720.52 million, reflecting a 0.6% increase from the year-ago quarter [6]. Stock Performance - PVH shares have increased by 23.5% over the past month, outperforming the Zacks S&P 500 composite, which rose by 6.4% [7]. - PVH holds a Zacks Rank of 2 (Buy), suggesting it is expected to outperform the overall market in the near term [7].

Core Viewpoint - PVH is anticipated to report a year-over-year decline in earnings due to lower revenues, with the consensus outlook indicating potential impacts on its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for June 4, 2025, with expected earnings of $2.23 per share, reflecting a 9% decrease year-over-year. Revenues are projected at $1.94 billion, down 0.8% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised 1.1% higher in the last 30 days, indicating a reassessment by analysts regarding the company's earnings prospects [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model shows that the Most Accurate Estimate for PVH is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.05%. Despite this, the stock holds a Zacks Rank of 2, complicating predictions of an earnings beat [12]. Historical Performance - PVH has a history of beating consensus EPS estimates, having done so in the last four quarters. In the most recent quarter, it reported earnings of $3.27 per share against an expectation of $3.19, achieving a surprise of +2.51% [13][14]. Conclusion - While PVH does not appear to be a strong candidate for an earnings beat, investors are advised to consider other factors influencing stock performance ahead of the earnings release [17].

Core Viewpoint - PVH has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Revisions - The Zacks Consensus Estimate for PVH for the fiscal year ending January 2026 is projected at $12.58 per share, reflecting a 7.2% increase from the previous year [7]. - Over the past three months, analysts have raised their earnings estimates for PVH by 4.1% [7]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [6]. - The Zacks rating system maintains a balanced distribution of 'buy' and 'sell' ratings, ensuring that only the top 20% of stocks are rated highly based on earnings estimate revisions [8][9]. Market Implications - The upgrade to Zacks Rank 2 positions PVH in the top 20% of Zacks-covered stocks, suggesting potential for higher stock price movement in the near term [9]. - Rising earnings estimates and the corresponding rating upgrade indicate an improvement in PVH's underlying business, which could lead to increased investor interest and stock appreciation [4].

Core Insights - V.F. Corporation (VFC) and PVH Corporation (PVH) are leading players in the global apparel industry, each with a strong portfolio of brands and retail expertise [1][2] - Both companies are adapting to changing consumer demands, inflationary pressures, and a focus on sustainability through digital innovation and supply chain agility [2][3] V.F. Corporation (VFC) - VFC is implementing a transformation program called Reinvent, focusing on cost reduction, strengthening the balance sheet, and improving brand performance, particularly for Vans [4][6] - The company has achieved $300 million in gross cost savings and aims for $500-$600 million in operating income expansion by fiscal 2028 [5][6] - VFC targets an adjusted operating margin of at least 10% and a gross margin of 55% or higher, with a goal to reduce net leverage to 2.5x or below [6][7] - VFC has reduced net debt by nearly $2 billion and raised free cash flow guidance to $440 million for fiscal 2025 [7] - Despite a solid third-quarter performance, VFC has revised its fourth-quarter revenue guidance to a decline of 4-6% year-over-year [8] PVH Corporation (PVH) - PVH focuses on brand elevation, direct-to-consumer growth, and operational efficiency through its PVH+ Plan, which aims for long-term value via digital acceleration and supply chain agility [10][11] - The company is targeting growth in Asia, particularly China, while maintaining a double-digit EBIT margin in North America [11] - In Europe, PVH aims to reignite growth through product innovation and enhanced marketing strategies [12] - PVH is leveraging digital innovation with AI-powered personalization and partnerships with major platforms like Amazon and Tmall [13] - The Zacks Consensus Estimate for PVH's fiscal 2025 sales and EPS implies year-over-year growth of 0.8% and 7.2%, respectively [14] Comparative Analysis - PVH currently trades at a forward P/E ratio of 6.26X, below the industry average of 12.40X, while VFC trades at a higher multiple of 12.92 [17][18] - PVH's stock has gained 15.3% in the past month, outperforming VFC and the broader industry [19] - PVH is viewed as a more attractive investment due to its disciplined execution of the PVH+ Plan and lower valuation compared to VFC [19][20] - VFC's ongoing operational challenges and transitional phase present execution risks, despite its long-term goals [21][25]

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental ...