Shares of PVH Corp, the parent company behind popular brands like Tommy Hilfiger, Calvin Klein, Warner’s, Olga, and True & Co., experienced a significant decline on Wednesday following the release of their second-quarter earnings report. Despite beating analysts’ expectations on earnings per share, the company’s revenue fell short, leading to investor concerns about the future.
The company’s adjusted earnings per share reached $3.01, exceeding the consensus estimate of $2.29. This positive performance was largely attributed to a $0.55 per share benefit resulting from an unplanned favorable tax settlement. While revenue decreased by 6% year-over-year, it surpassed market projections of a 6.3% contraction.
Despite the positive earnings, PVH raised its full-year earnings guidance to reflect the tax benefit, but still anticipates a revenue decline between 6% and 7%. This revised guidance also includes a 5-cent headwind from foreign exchange rates and a more favorable interest outlook.
The company’s outlook for the fiscal third quarter proved to be a cause for concern, citing an increasingly challenging global macroeconomic backdrop and sluggish performance in China and Australia. These factors, coupled with a potentially more promotional landscape due to the dynamic macroeconomic environment, are expected to continue impacting the company’s performance in the second half of the year.
Despite the dip in share price, analysts remain optimistic. Goldman Sachs analyst Brooke Roach maintained a Buy rating and a price target of $144, while JPMorgan analyst Matthew Boss reiterated an Overweight rating and a price target of $154.
While the company’s recent performance has been affected by global economic headwinds, its strong brand portfolio and positive analyst sentiment suggest that PVH Corp remains a company to watch in the fashion industry.
