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Could We See Another Top-Line Beat from PVH?

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PVH’s sales likely to grow 11% in fiscal 4Q17

PVH (PVH), the owner of Calvin Klein, Tommy Hilfiger, and other top fashion brands, will report its fiscal 4Q17 results on March 28, 2018. Wall Street has projected an 11.7% YoY (year-over-year) increase in its total sales to $2.4 billion.

The company has delivered an impressive performance so far this year, outdoing Wall Street projections and growing sales during each of the three reported quarters. Year-to-date, its total sales have increased 5.3% to $6.4 billion.

Robust performances by the company’s premium brands, Calvin Klein and Tommy Hilfiger, especially in the international markets, are behind the consistent growth.

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How have other apparel peers performed this earnings season?

Apparel retailers have delivered a mostly positive performance this earnings season. Of the seven major fashion players that have released their results since February 2018, six have exceeded analysts’ revenue expectations. They include Guess (GES) (+17.5% YoY), L Brands (LB) (+7% YoY), Hanesbrands (HBI) (+4% YoY), Tapestry (TPR) (+35% YoY), Michael Kors (KORS) (+6.7% YoY), and Ralph Lauren (RL) (-4.1% YoY).

VF Corporation (VFC), however, fell short of expectations by ~$10 million.

Almost all of the above-mentioned companies reported strong performances in international markets, although many of them continued to witness a weakness in North America. Guess, for instance, posted ~40% growth in Europe and Asia, while its American retail sales fell 6% during the last reported quarter. Tapestry (TPR), on the other hand, saw strength in its North American business following a healthy holiday season.

In the next part of this series, we’ll look at PVH’s performance in domestic and international markets.

ETF investors seeking to add exposure to PVH can consider the iShares Edge MSCI Multifactor Consumer Discretionary ETF (CNDF), which invests 2.3% of its portfolio in PVH.

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