PVH Corp shares jump 12% as results top estimates; Results 'encouraging' says analyst

(Updated - March 28, 2023 5:29 AM EDT)

Investing.com -- PVH Corp (NYSE: PVH) reported fiscal fourth-quarter results that topped Wall Street estimates as its plan to accelerate the growth of its two core brands Calvin Klein and Tommy Hilfiger spurred growth despite a challenging macro backdrop.

PVH Corp shares are trading about 12% higher in pre-market Tuesday.

The company reported adjusted Q4 EPS of $2.38 on revenue of $2.49 billion, beating estimates of $1.66 on revenue of $2.36B.

The beat comes despite a fall in gross margins amid higher costs as the company continued to make progress under its PVH+ plan, which aims to boost the growth of its Calvin Klein and Tommy Hilfiger brands.

Gross margin fell to 55.9% from 58.3% in the prior year period.

Tommy Hilfiger revenue increased 3%, while Calvin Klein revenue increased 3% compared to the prior year period.

"The benefit from price increases and a favorable shift in regional and channel mix were more than offset by higher costs and increased promotional activity due to elevated inventory levels industry-wide," the company said.

Looking ahead to 2023, EPS was guided to about $10.00, with revenue projected to increase 3% to 4% as compared to 2022.

BofA analyst Christopher Nardone reiterated a Buy rating on 'encouraging results'.

"This outlook was encouraging and should provide investors with increased confidence that the core international business remains intact while opportunities in North America remain in sight," the analyst said in a note.

BMO analyst Simeon Siegel is less bullish as he prefers to wait to see "further visibility on sustained improvement" before growing more positive on Market Perform-rated PVH shares.

By Yasin Ebrahim and Senad Karaahmetovic

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