雅虎香港財經 PVH Earnings Surpass Estimates, Revenues Decline in Q1
PVH Corporation PVH reported first-quarter fiscal 2024 results, wherein both earnings and revenues topped estimates. The bottom line improved while the top line fell year over year. Results gained from the strong execution of the PVH+ Plan, which led to a strong gross margin expansion and double-digit adjusted earnings per share (EPS) growth.
We note that shares of this Zacks Rank #3 (Hold) company have gained 14.3% in the past six months against the industry's 11.4% decline.
Q1 Highlights
PVH Corp. reported adjusted earnings of $2.45 per share, up 14.5% from the year-ago quarter's $2.38. The bottom line also beat the Zacks Consensus Estimate of earnings of $2.14 per share and the company’s guidance of $2.15.
PVH Corp. Price, Consensus and EPS Surprise
PVH Corp. price-consensus-eps-surprise-chart | PVH Corp. Quote
Revenues fell 10% year over year (down 9% at constant currency) to $1,952 million but beat the consensus mark of $1,928 million.
The company's international businesses saw a 9% decrease in revenues year over year as robust growth in the Asia Pacific region in local currency was more than offset by lower revenues in Europe. In North America, combined revenues for the Tommy Hilfiger and Calvin Klein brands saw a rise of 3% compared with the previous year.
Direct-to-consumer revenues increased 9% compared with the prior year period (up 9% on a constant-currency basis) on consistent growth in all regions, including both the company's owned and operated stores, and digital-commerce operations. The digital commerce unit of the owned and operated stores rose 10% (9% on a constant-currency basis) year over year.
Wholesale revenues witnessed a 17% decline on a reported basis compared with the previous year (17% decrease at constant currency), which included a 6% fall attributable to the sale of the Heritage Brands women's intimates business and planned decline in revenues in Europe to boost the quality of sales in the region. The wholesalers have been taking a cautious approach, mainly in Europe.
The company's gross profit of $1.2 billion dipped 7.7% year over year. The gross margin expanded 350 bps to 61.4% on gains from lower product costs, a favorable shift in channel mix and a fall in sales to lower-margin wholesale accounts. We estimated the fiscal first-quarter gross margin to expand 170 bps year over year to 59.6%.
Selling, general and administrative expenses dipped 3.8% year over year to $1.02 billion.
The company’s adjusted earnings before interest and taxes totaled $195.1 million, down 1.9% from the prior-year quarter.
Segmental Analysis
PVH Corp. reports financial results under three segments, which are Calvin Klein, Tommy Hilfiger and Heritage Brands.
Revenues for the Calvin Klein segment were flat year over year (up 1% in constant currency). The segment recorded a 2% sales decline (flat in constant currency) at Calvin Klein International and 4% increase at Calvin Klein North America.
Revenues for the Tommy Hilfiger brand dropped 10% year over year (down 9% in constant currency). Revenues fell 14% (down 13% in constant currency) in Tommy Hilfiger International, offset by a 2% rise in Tommy Hilfiger North America.
The Heritage Brands segment's revenues plunged 65% year over year. This included a 47% year-over-year decline in the sale of the Heritage Brands women's intimates business.
Our model predicted the Tommy Hilfiger brand to register a sales decline of 10.5% in the fiscal first quarter. Sales for Calvin Klein were anticipated to decrease 11.2% year over year while Heritage Brands was expected to deliver a sales decline of 10.7%.
Other Financial Details
PVH Corp. ended the fiscal first quarter with cash and cash equivalents of $0.4 billion, long-term debt of $2.1 billion and stockholders' equity of $5.1 billion.
In alignment with the PVH+ Plan's objective to return excess cash to shareholders, the company executed the repurchase of 1.8 million shares of its common stock, amounting to $200 million. It expects to repurchase shares of $400 million for the fiscal year.
Outlook
For the second quarter, revenues are projected to decline in the range of 6-7% from the year-ago quarter, including a 3% reduction related to the Heritage Brands sale.
EPS, on a GAAP basis, is expected to be $2.25 compared with $1.50 reported in the year-ago quarter. This view includes unfavorable currency impacts of 5 cents per share.
Interest expenses are estimated to be $20 million compared with $24 million in the year-ago period. The effective tax rate is expected to be 20%.
For fiscal 2024, the company anticipates a revenue decline in the range of 6-7% compared with 2023, which is consistent on a constant currency basis. This will include 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.
Operating margin is expected to remain roughly in line with 10.1% achieved in 2023. This projection suggests a disciplined approach to cost management and operational efficiency, aiming to preserve profitability margins amid revenue pressures.
It envisions adjusted EPS to be in the band of $11.00-$11.25. The company expects GAAP EPS to be between $11.15 and $11.40 compared with $10.76 and non-GAAP EPS of $10.68 in fiscal 2023. The EPS guidance includes a negative impact of 10 cents per share from unfavorable currency.
PVH anticipates interest expenses of $75 million. The effective tax rate is expected to be 20%.
Key Picks
Some better-ranked companies are Ralph Lauren RL, Royal Caribbean RCL and lululemon athletica LULU.
Ralph Lauren sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ralph Lauren has a trailing four-quarter earnings surprise of 18.7%, on average. The Zacks Consensus Estimate for RL’s fiscal 2024 EPS indicates an increase of 22.7% from the year-ago period’s reported level.
Royal Caribbean sports a Zacks Rank of 1, at present. RCL has a trailing four-quarter earnings surprise of 28.3%, on average.
The consensus estimate for RCL’s 2024 sales and EPS indicates increases of 14.5% and 47.9%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS indicates growth of 13.7% and 15%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.2%, on average.
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