PVH Corp. Ready for Another Quarter of Strong Growth



PVH Corp.’s sales could grow more than 10% in Q2

PVH Corp. (PVH), the parent company of Calvin Klein and Tommy Hilfiger, is slated to report its second-quarter results on August 29.

PVH management is looking for a 10% YoY (year-over-year) rise in second-quarter total sales. Currency is likely to have a 1% positive impact on its top line.

PVH’s key brands—Calvin Klein and Tommy Hilfiger—are once again expected to drive its business. While Tommy Hilfiger sales are projected to increase 12% YoY on a constant currency basis during the quarter, Calvin Klein is likely to show even greater momentum and grow 14% YoY on a constant currency basis.

Its total sales grew 16.4% in the first quarter, driven by an 18% growth in Calvin Klein sales and a 21% increase in Tommy Hilfiger sales. International performance was particularly strong as overseas sales grew more than 25% for each of the brands.

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Wall Street’s view of the second quarter

Wall Street is in line with PVH management. Analysts have projected a 10.5% YoY (year-over-year) increase in the company’s total sales to $2.28 billion.

The company has missed consensus top-line expectations only once in the past 13 quarters. Robust performances by Calvin Klein and Tommy Hilfiger, especially in international markets, have been behind PVH’s consistent performance.

A look at fiscal 2018 growth expectations

PVH management has projected a 6% improvement in its fiscal 2018 top line. Growth is likely to be fueled by a 7% (6% on a currency-neutral basis) increase in Tommy Hilfiger sales and an 8% (7% on a currency-neutral basis) growth in Calvin Klein sales.

ETF investors seeking to add exposure to PVH can consider the Guggenheim S&P 500 Equal Weight Consumer Discretionary ETF (RCD), which invests 1.2% of its portfolio in PVH.

Read the next part to know about the margin expectations for the company’s second quarter.


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