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 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 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].
PVH Q1 Earnings on the Horizon: Here's What Lies Ahead for the Stock