PVH, Parent Of Calvin Klein, Tommy Hilfiger, Impresses Analysts With Q1 Earnings Beat

Zinger Key Points
  • PVH reported a revenue decline for Q1, with better margins leading to an earnings beat, one analyst said.
  • Although management raised their FY24 outlook, this was driven by non-operational components, another analyst added.

Shares of PVH Corp PVH were climbing in early trading on Wednesday, after the company reported upbeat earnings for its first quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

BMO Capital Markets On PVH

Analyst Simeon Siegel maintained a Market Perform rating, while raising the price target from $110 to $119.

PVH's revenue declined by around 10%, but came in better than the guidance, with stronger-than-expected gross margins "flowing through to a bottom-line beat," Siegel said in a note. "PVH ranks near the top of the group for GM expansion this quarter,"

While Calvin Klein performed better than expected on strength in North America, Tommy Hilfiger's performance was slightly disappointing due to pressure in Europe, the analyst stated. Management raised the full-year earnings guidance "on tax/Interest while reiterating sales and EBIT margin despite better 1Q EBIT (suggesting a likely conservative implied rest-of-FY EBIT guide down)," he further wrote.

JPMorgan On PVH

Analyst Matthew Boss reiterated an Overweight rating and price target of $157.

PVH reported adjusted earnings of $2.45 per share, higher than the Street's $2.17 estimate, Boss said. The company's gross profit margins expanded by 350 basis points (bps) to 61.4%, beating the consensus of 60.7%, "equating to a 10.0% EBIT margin," he added.

Management guided to a revenue decline in the range of 6%-7% for the second quarter and adjusted earnings of about $2.25 per share, which implies operating margin expansion of around 60 bps year-on-year at the midpoint, the analyst stated.

Check out other analyst stock ratings.

Goldman Sachs On PVH

Analyst Brooke Roach reaffirmed a Buy rating and price target of $126.

"On one hand, we view the healthy gross margin beat and global Calvin Klein outperformance as proof points of incremental execution of key PVH+ plan initiatives," Roach wrote in a note. He added, however, that the strength was offset by Tommy Hilfiger's softer performance and continued weakness at wholesale.

"Regarding the outlook, we are encouraged by the ahead-of-consensus F2Q guide, though we note the increase in FY24 EPS guidance is driven by non-operational components (interest/tax)," the analyst said.

Wedbush On PVH

Analyst Tom Nikic maintained an Outperform rating and price target of $128.

PVH's revenue decline was "largely as expected" and can be seen as healthy given the "quality-of-sale initiatives in Europe in addition to a tough macro," Nikic said. He added that the company delivered growth in most other geographies.

"Notably, margins were strong, which we feel is very important to the PVH story, as the multi-year margin expansion opportunity is highly compelling to us," the analyst added.

PVH Price Action: Shares of PVH were up 2% to $121.61 at the time of publication on Wednesday.

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Posted In: Analyst ColorEarnings MissesPrice TargetReiterationTop StoriesAnalyst RatingsBMO Capital MaketsBrooke RoachGoldman SachsJPmogranMatthew BossSimeon SiegelTom NikicWedbush
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