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What to Expect from PVH Corp’s Earnings in 1Q17

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Earnings in 1Q17

As we discussed earlier, PVH Corp (PVH) is slated to report its 1Q17 results on May 25. Wall Street expects the company to post a 6.7% YoY (year-over-year) jump in earnings to $1.60 per share.

The apparel retailer has beaten consensus earnings estimates in the last 11 quarters. PVH Corp missed Wall Street analysts’ expectations once in six years. Strong performances of its key brands Calvin Klein and Tommy Hilfiger, especially in international markets, have been the driving force.

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Management’s view on 2017 earnings

The company’s management expects its EPS (earnings per share) to be $1.58–$1.60 during the first quarter, which also includes $0.10 of a negative impact from currency. Excluding the negative impact, the EPS will likely rise 12%–13% in 1Q17.

For fiscal 2017, the EPS is projected to be $7.30–$7.40—increasing 8.1% at the mid-point. Currency headwinds will likely cut $0.40 from its earnings. Wall Street analysts expect an 8.7% increase in the company’s EPS in fiscal 2017.

For the year, the operating margin is projected to increase by around 30 to 40 basis points on a constant currency basis and 10 to 20 basis points on a reported basis. Operating margin gains of around 75 basis points (on a reported basis) from Tommy Hilfiger are expected to be partially washed away by a 30 to 40 point decline in Calvin Klein’s margins.

ETF investors seeking to add exposure to PVH Corp can consider the iShares Morningstar Mid-Cap ETF (JKG), which invests 0.42% of its portfolio in PVH Corp.

In the next part, we’ll discuss the company’s year-to-date stock market performance and its dividend policy.

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