PVH Corp (NYSE: PVH) Stock Rises Despite Mixed Performance

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PVH Corp (NYSE: PVH) stock rose over 0.9% on March 31st, 2021 in the pre-market session (Source: Google finance) even though the company posted lower than expected results for the fourth quarter of FY 20. Total direct to consumer revenue for the fourth quarter fell 20% compared to the prior year period, which included a 68% increase in digital commerce. About 70% of Company-operated stores in Europe and about 75% of Company-operated stores in Canada were closed temporarily during the quarter as a result of the virus resurgences there. The Company’s wholesale revenue for the fourth quarter fell 19% compared to the prior year period, which included a double digit increase in the Company’s sales to the digital businesses of its traditional and pure play wholesale customers. The company’s inventory declined 12% as of the end of 2020 compared to the prior year. The Company is carrying approximately $75 million of basic inventory into Spring 2021, which reflects a decrease from the Company’s prior projection of approximately $100 million.

PVH in the fourth quarter of FY 20 has reported the adjusted loss per share of 38 cents, missing the analysts’ estimates for the adjusted loss per share of 34 cents, according to analysts polled by Refinitiv. The company had reported 20 percent decline in the adjusted revenue to $2.09 billion in the fourth quarter of FY 20, missing the analysts’ estimates for revenue of $2.12 billion.

Moreover, there has been a 16% decline (20% decrease on a constant currency basis) in the Tommy Hilfiger business compared to the prior year period, including a 28% fall in Tommy Hilfiger North America revenue and a 10% fall (17% decrease on a constant currency basis) in Tommy Hilfiger International revenue, driven by the impact of temporary store closures for much of the quarter due to the extensive lockdowns throughout Europe. There has been a 17% decline (20% decrease on a constant currency basis) in the Calvin Klein business compared to the prior year period, including a 25% decline in Calvin Klein North America revenue and a 10% decline (16% decrease on a constant currency basis) in Calvin Klein International revenue. In addition, there has been a 41% decline in the Heritage Brands business compared to the prior year period, which included a 17% decline driven by the sale of the Company’s Speedo North America business.

The Company projects its 2021 revenue and earnings will continue to be affected negatively by the pandemic, particularly in the first quarter due to ongoing store closures, predominantly in Europe.

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