PVH Corp. posts strong results and increases guidance. Share price… drops?
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PVH Corp. posts strong results and increases guidance. Share price… drops?

Surprisingly, shares in PVH Corp., the owner of top class fashion brands like Tommy Hilfiger and Calvin Klein, dropped last week. The reason it was surprising is that the drop came on the back of what looks like positive news: the company posted strong quarterly earnings and increased its guidance for the full year. In any case, beating the Street in its last quarter was obviously not enough to keep investors happy – and PVH Corp.’s share price fell after hours when the company said that it might log a slight miss in earnings for the current quarter.

After last week’s drop, PVH’s share price has appreciated by 4% so far this year

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Source: Yahoo Finance

PVH said that revenues rose by 13%, year on year, to $2.33 billion, beating analysts’ expectations of $2.29 billion. Hilfiger and Klein were the outperformers over the quarter, with the former seeing revenues rise by 15% and the latter by 18%, both reported against the same period in the previous year.

Emanuel Chirico, the company’s CEO, made the following comment about progress in the quarter: “We have made great progress in enhancing our consumer insights capabilities, increasing our efforts around online and offline consumer experiences, and driving engagement with the next generation of consumers.”

Adjusted earnings per share rose dramatically against the same period in the previous year to $2.18 – that’s also an easy beat against analysts’ expectations of $2.10 per share. However, PVH Corp. said that it expects to report adjusted earnings of “between $3.10 and $3.13 per share” for the current quarter – at the low end, that guidance trails the Street’s predictions of $3.13 per share.

The company said it now expects full-year revenue to increase by 7% against the previous year. That’s an increase from its previous full-year guidance of a 6% increase.

Disclosure
Dominion holds PVH Corp. in its Global Trends Luxury Fund.


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