PVH Corporation PVH is benefiting from the strong execution of its PVH+ Plan, alongside strength in its brands and cost-management efforts. The company’s diversified brand portfolio allows it to stay ahead of peers and maintain its position in the ongoing challenging environment.
Let’s delve deeper.
Strategies Aiding PVH’s Rally
The PVH+ Plan mainly aims at accelerating growth by boosting the company’s core strengths and connecting Calvin Klein and TOMMY HILFIGER brands with the consumers. It is focused on key drivers, including 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.
The company continues to lean into the next level of PVH+ Plan execution, delivering a double-digit EBIT margin every quarter, which is a key step in the growth trajectory. It is influencing product execution for the brands globally, further boosting the key growth categories and offering sturdy transitional products with innovation.
PVH’s constant efforts to expand its international business also bode well. In Europe, the company is on track with efforts regarding the targeted quality of sales and is experiencing robust growth in the Asia-Pacific region. Management expects Asia to deliver growth ahead.
In Europe, the key business drivers will come from the constant improvements in product, marketing and the marketplace execution. For Europe, management expects revenues to be higher year over year by mid-single digits in euros with increases in direct-to-consumer and wholesale channels, along with sequential improvement in the order books and growth in fall 2025.
In addition, the company is concentrating on robust quality of sales and winning with its major wholesale partners. It has also been advancing its product offers and innovating its key products.
What do the Estimates Say About PVH?
Given the positives surrounding the stock, the Zacks Consensus Estimate for the current and next fiscal years’ earnings per share (EPS) has gone north. In the past 30 days, the consensus estimate for EPS has risen 3% to $12.45 for fiscal 2025 and 6.3% to $14.05 for fiscal 2026. This implies year-over-year earnings growth of about 6.1% for fiscal 2025 and 12.9% for fiscal 2026. In addition, the consensus mark for PVH’s sales indicates a year-over-year rise of 0.4% and 2.1%, respectively, for both the fiscal years.
PVH Stock’s Attractive 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 5.46 on a forward 12-month basis, lower than 9.83 for the industry. Also, the stock is trading lower than its median of 8.17.
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 41% year over year in the fourth quarter of fiscal 2024. This included a 28% year-over-year decline in the sale of the Heritage Brands women's intimates business.
The industry, in which the company operates, has been witnessing uncertainty around the U.S. consumer demand and macro challenges. In Asia Pacific, management is cautious owing to the headwinds in China and expects revenues to be down mid-single digits in constant currency for the fiscal year. Revenues are projected to be down low-double digits in China, but up low single-digit in the rest of the region.
For the first quarter, revenues are projected to be flat to down 2% (flat to down 1% in constant currency) from the year-ago quarter. The gross margin is likely to decline roughly 250 basis points, due to higher freight costs and incremental discounts owing to the Calvin Klein product delays. Adjusted EPS is envisioned to be in the range of $2.10-$2.25 for the impending quarter, lower than the $2.45 reported in the year-ago quarter, including an unfavorable currency impact of five cents per share.
Final Words on PVH Stock
Nevertheless, 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. Management expects to accomplish significant cost savings in 2025.
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PVH's shares have increased 4.3% against the industry's 16.5% decline in the past month. The company’s appealing valuation further acts as a positive. PVH currently carries a Zacks Rank #3 (Hold) at present.
Key Consumer Discretionary Picks
We have highlighted three better-ranked stocks, namely, Ralph Lauren RL, Gildan Activewear GIL and Royal Caribbean RCL.
Ralph Lauren, a designer and distributor of premium lifestyle products, including apparel, accessories and footwear, currently carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ralph Lauren has a trailing four-quarter earnings surprise of 6.5%, on average. The Zacks Consensus Estimate for RL’s current financial-year sales indicates growth of 5.8% from the year-ago figure.
Gildan Activewear, a manufacturer of premium quality branded basic activewear, carries a Zacks Rank of 2 at present. GIL has a trailing four-quarter earnings surprise of 5.3%, on average.
The consensus estimate for Gildan Activewear’s current financial-year sales indicates growth of 4.4% from the year-ago figure.
Royal Caribbean carries a Zacks Rank of 2 at present. RCL has a trailing four-quarter earnings surprise of 15.7%, on average.
The Zacks Consensus Estimate for RCL’s 2025 sales and EPS indicates an increase of 8.9% and 25.9%, respectively, from the year-ago levels.
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