PVH Corp (NYSE: PVH) stock rose 3.7% in the after-hours session on August 23rd, 2017 (as of 7:51PM EDT; Source: Google finance) driven by better than expected results. Revenue surged 7% yoy in the second quarter of 2017 which more than outlook. EPS GAAP basis reached $1.52 much better than the outlook of $1.35 to $1.38. The group’s operating efficiencies across their diversified business model paid off.
The group raised their full year 2017 EPS on a GAAP basis to $6.44 to $6.54 as compared to their earlier forecasts of $6.24 to $6.34. Non-GAAP basis is now forecasted to reach $7.60 to $7.70 against their earlier estimates of $7.40 to $7.50.
Management believes that their further $25 million of marketing spend for CALVIN KLEIN and TOMMY HILFIGER would enhance their market share gains and enable them to leverage international opportunities. They intend to further invest $10 million in marketing during the second half of this year to drive their Tommy Hilfiger and Calvin Klein businesses
For the full year of 2017, the group forecasts their earnings per share to be negatively affected by $0.20 per share attributable to foreign currency exchange rates against the prior corresponding year given the U.S. dollar fluctuations. PVH sees revenue to rise over 6% in 2017 (which is a rise of over 5% on a constant currency basis) against the prior corresponding year. Mexico deconsolidation and the G-III license would hurt the top line performance. However, revenue for the Calvin Klein business would continue to rise while the group expects over 8% rise (over 7% rise on a constant currency basis), despite the negative impact of the Mexico deconsolidation. Revenue for the Tommy Hilfiger business is also expected to grow over 6% (increase approximately 5% on a constant currency basis), but Heritage Brands business would be flat against pcp.
PVH stock surged over 33% in this year to date (as of August 23rd, 2017; Source: Google finance). PVH stock has a 13.5% upside as per eight analysts consensus target price of $136.25.