PVH tops Q3 earnings estimates and misses on revenue, raises outlook

PVH Corp’s (PVH) earnings in the third quarter surpassed both the consensus and the company’s estimates. However, revenue missed Street’s views sending the stock downwards during the after-hours of trading on Thursday. The retailer stated that its business in Q3 was hurt by the weak sales in the Calvin Klein segment.

The New York-based firm’s non-GAAP EPS of $3.21 beat the analysts’ estimate of $3.14 and the company’s outlook of $3.10 to $3.13. GAAP EPS was $3.15 compared to PVH’s guidance of $3.03 to $3.06. Revenue of $2.52 billion in the quarter ended November 4, 2018, missed consensus estimate of $2.53 billion.

PVH stated that it had lifted fiscal 2018 earnings outlook despite the recent retailer bankruptcies in the US and UK and growing geopolitical volatility around the world. The company now expects GAAP EPS to be in the range of $9.10 to $9.12 compared to the earlier estimate of $8.96 to $9.01 and non-GAAP EPS is targeted to be in the range of $9.33 to $9.35 versus the prior outlook of $9.20 to $9.25. Revenue for the year is estimated to grow about 7%.

For the fourth quarter, GAAP EPS is projected to be $1.54 to $1.56 and non-GAAP EPS is touted be $1.58 to $1.60. Revenue in the current quarter is pegged to decline approximately 4%, negatively impacted by the 53rd week in 2017.

When commenting on the softness in the Calvin Klein business, CEO Emanuel Chirico said, “While many of the product categories performed well, we are disappointed by the lack of return on our investments in our Calvin Klein 205 W39 NYC halo business and believe that some of the CALVIN KLEIN JEANS relaunched product was too elevated and did not sell through as well as we planned.”

In an interview to CNBC, CEO Chirico commented that the company has to increase the prices if the Trump’s administration places the tariffs at 25% on the products it makes in China. Already, several US retailers have warned that prices will likely to increase for their goods when the new tariff structure is implemented.

Tommy Hilfiger, Calvin Klein drive PVH’s Q2 results

Shares of PVH ended Thursday’s session at $109.77, down 1.03% and were down about 8% in the extended trading hours. The stock, which hit a 52-week low ($106.63) on November 20, is likely to hit a fresh yearly low during Friday’s trading session. PVH’s stock price has declined 20% both in the year-to-date and past one year periods.

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