Market Overview

PVH's Prelim Results Show Luxury Brands May Be Immune To Woes At Partners Like Macy's, Kohl's

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Shares of Macy's Inc (NYSE: M) and Kohl's Corporation (NYSE: KSS) plummeted Thursday as both companies disappointed investors with announcements of poor holiday sales.

While the department stores issued concerning updates, the same can't be said for the apparel makers.

PVH Corp (NYSE: PVH), the parent company of many iconic brands including Calvin Klein and Tommy Hilfiger, provided a fourth quarter update and expects earnings to be at least at the higher end of its prior guidance range of $1.13 to $1.18 per share.

Eric Beder of Wunderlich commented in a report that Macy's woes are "obviously not an issue" for PVH's brands. In fact, the analyst believes the company is even capturing market share and is best positioned to continue doing so in the future.

Beder argued that PVH has room to expand in the international market where it enjoys a premium status which allows for premium pricing and margins.

In addition, PVH remains active in aggressively lowering its debt profile and buyback its stock. Meanwhile, the company is approaching a point where it has the financial flexibility to also oversee a material transaction.

Bottom line, PVH isn't a domestic department store play and investors should see the company as a global apparel leader with the potential for future expansion.

Shares remain Buy rated with an unchanged $125 price target.

Latest Ratings for KSS

DateFirmActionFromTo
Aug 2019MaintainsNeutral
Aug 2019MaintainsUnderweight
Aug 2019MaintainsHold

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Posted-In: Calvin Klein Department Stores Eric Beder holiday sales PVH CorpAnalyst Color Analyst Ratings Movers

 

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