Tommy Hilfiger & Calvin Klein Parent PVH Corp. Stock Tumbles On Tuesday - Here's Why

PVH Corp. PVH shares are trading lower after the company issued weak first-quarter guidance.

The company reported adjusted fourth-quarter earnings per share of $3.72, beating the Wall Street view of $3.53.

Quarterly revenues of $2.49 billion outpaced the analyst consensus of $2.42 billion. Sales were flat as compared to the prior year period and exceeded guidance of a 3% to 4% decline.

In the quarter under review, Tommy Hilfiger revenue increased by 1%, Calvin Klein revenue increased by 4%, and Heritage Brands revenue decreased by 41%.

Overall revenue in the company's international businesses increased 4% on growth in the Asia Pacific region despite the challenging macroeconomic environment in Europe, particularly impacting the wholesale business.

Quarterly gross margin expanded to 60.3% compared to 55.9% in the prior year period. The increase reflects benefits from lower freight costs, a favorable shift in regional and channel mix, and lower product costs.

Inventory decreased 21% year over year, which is in line with expectations, as the company continues to manage its inventory levels proactively.

Stock Repurchase: The company repurchased 2.5 million shares of its common stock for $282 million during the fourth quarter of 2023, bringing total share repurchases for the full year 2023 to 5.7 million shares for $550 million.

On March 27, 2024, the Board of Directors approved a $2.0 billion increase to the stock repurchase program and extended it through July 2028.

Outlook: PVH projects first quarter EPS of $2.15 compared to $2.14 in the first quarter of 2023 (analyst estimate: $2.59). First-quarter revenue is projected to decrease approximately 11%.

The company's full-year 2024 EPS is projected to be in the range of $10.75 to $11.00. Revenue is projected to decrease by 6% to 7% as compared to 2023. Operating margin is projected to be approximately flat compared to 10.1% in 2023.

Price Action: PVH shares are trading lower by 24.0% to $106.25 on the last check Tuesday. 

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