PVH Corp Gears Up for Q2 Earnings: What's in Store?

PVH Corporation PVH is likely to post a year-over-year decline in its top line when it reports second-quarter fiscal 2024 results on Aug 27, after market close. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.1 billion, indicating a drop of 6.3% from the prior-year reported number.

The consensus estimate for earnings is pegged at $2.27 per share, which indicates an increase of 14.7% year over year. The consensus mark has remained stable in the past 30 days.

In the last reported quarter, the company delivered an earnings surprise of 6%. It has a trailing four-quarter earnings surprise of 9.2%, on average.

Factors to Note

PVH Corp's quarterly performance is likely to have been buoyed by strength in its core brands and other strategic efforts. Management has been on track with the PVH+ Plan, which is likely to have resulted in substantial cost efficiencies and better productivity. It has been focused on driving digital growth by developing a holistic distribution strategy for Calvin Klein and Tommy Hilfiger, driven by direct-to-consumer (DTC) channels and wholesale partnerships.

In addition, the company has been making consistent efforts to boost its international presence. Gains from these efforts are likely to have boosted the quarterly performance.

However, PVH Corp has been witnessing increased investments in the DTC and international businesses. High raw material costs and currency headwinds have been added concerns. On the last earnings call, management had guided adjusted revenues to decline in the range of 5-6% year over year for the fiscal second quarter at constant currency. This included a 3% reduction related to the Heritage Brands sale. The earnings view included unfavorable currency impacts of 5 cents per share.

Our model predicts a sales decline of 6.7% for Tommy Hilfiger for the fiscal second quarter. Sales for Calvin Klein are anticipated to decline 2.9% year over year while Heritage Brands is expected to record a sales fall of 23%.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for PVH Corp this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

Stocks to Consider

Here are some companies, which according to our model, have the right combination of elements to post an earnings beat in their upcoming releases.

Abercrombie & Fitch ANF currently has an Earnings ESP of +5.40% and a Zacks Rank of 2.

The company is likely to register growth in the bottom and top lines when it reports fiscal second-quarter results. The Zacks Consensus Estimate for ANF's quarterly earnings has moved up 2.4% to $2.13 per share in the past 30 days. The consensus estimate indicates 93.6% growth from the year-ago quarter's number.

The consensus estimate for Abercrombie's quarterly revenues is pegged at $1.1 billion, which indicates growth of 16.4% from the figure reported in the prior-year quarter.

American Eagle Outfitters AEO currently has an Earnings ESP of +1.97% and a Zacks Rank of 2. The company is likely to register growth in the bottom and top lines when it reports second-quarter fiscal 2024 results. The consensus mark for AEO's quarterly revenues is pegged at $1.3 billion, which indicates an 8.7% rise from the figure reported in the prior-year quarter.

The consensus mark for AEO's quarterly earnings has moved up a penny in the past seven days to 38 cents per share. The consensus estimate indicates growth of 38% from the year-ago quarter's actual.

lululemon athletica LULU currently has an Earnings ESP of +0.66% and a Zacks Rank of 3. The company is likely to register top-line growth when it reports fiscal second-quarter results. The consensus mark for LULU's quarterly revenues is pegged at $2.4 billion, which indicates growth of 9.1% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for lululemon athletica's earnings has remained stable at $2.96 per share in the past seven days. The consensus estimate indicates a rise of 10.5% from the year-ago quarter's actual.

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