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PVH Corporation PVH has been gaining from the strong execution of the PVH+ Plan, alongside strength in its brands and cost-management efforts. The plan mainly aims at accelerating growth by boosting its core strengths and connecting Calvin Klein and TOMMY HILFIGER brands with the consumers. Let’s delve deeper.
PVH’s Strategies
The PVH+ Plan is focused on five key drivers, which are win with product; win with consumer engagement; win in the digitally-led marketplace; develop a demand and data-driven operating model; and drive efficiencies and invest in growth. Management reinforces the Calvin Klein and TOMMY HILFIGER brands so that these can cater to consumers’ needs in new and engaging ways.
PVH’s constant efforts to expand its international business also bode well. The company continues to experience improved European order books sequentially. It has been strategically reducing sales in Europe to improve overall sales quality and experiencing robust growth in the Asia-Pacific region.
Within wholesale, the company is concentrating on the robust quality of sales and winning with its major wholesale partners. It has also been advancing its product offers and innovating its key products. Moving forward in 2025, PVH Corp. anticipates returning to modest growth and accomplishing its long-term 15% operating margin target.
PVH Stock’s Valuation
PVH Corp.’s stock is trading at a discount valuation relative to the industry. Going by the price/earnings ratio, the stock is currently trading at 7.79 on a forward 12-month basis, lower than 14.27 for the industry. Also, the stock is trading lower than its five-year median of 9.30.
Concerns for PVH Corp.
Apart from a challenging operating landscape, the company has been witnessing sluggishness in its Heritage Brands for quite some time now. The segment's revenues plunged 54% year over year in the third quarter of fiscal 2024. This included a 44% year-over-year decline in the sale of the Heritage Brands women's intimates business. In addition, elevated freight costs owing to the disruptions in its major sourcing locations, along with a higher promotional backdrop, have been hurting the gross margin.
For fiscal 2024, the company still anticipates a year-over-year revenue drop in the range of 6-7%, which is consistent on a constant-currency basis. This includes a 2% reduction due to the divestiture of the Heritage Brands women’s intimates business and a 1% impact from the 53rd week in fiscal 2023.
Final Words on PVH Stock
The company has been strengthening its competitive advantage, accelerating profitable growth and preparing for long-term success. PVH’s robust strategies, including the PVH+ initiative and expansion efforts, position it well for growth. Shares of the company have gained 3.8% compared with the industry's 15% growth in the past three months.