PVH Corp (NYSE:PVH) Gave Weak Guidance

PVH Corp (NYSE:PVH) stock plunges 22.87% (As on April 2, 11:28:27 AM UTC-4, Source: Google Finance) after the company posted fourth-quarter results that topped Wall Street estimates on top and bottom lines, driven by strong margin growth. However, the apparel maker’s full-year guidance fell short of estimates amid a tough consumer backdrop for retailers, sending its shares tumbling. Overall revenue in the Company’s international businesses increased 4% over the prior year period as strong growth in the Asia Pacific region across all markets more than offset a continued challenging macroeconomic environment in Europe, particularly impacting the wholesale business. In North America, revenue in the Tommy Hilfiger and Calvin Klein businesses combined was down 2% compared to the prior year period, as strong growth in the direct-to-consumer business was more than offset by a decline in wholesale revenue, as wholesale customers continue to take a cautious approach. The benefit from the 53rd week in the fourth quarter of 2023 was largely offset by a reduction related to the sale of the Heritage Brands women’s intimates business that closed in the fourth quarter of 2023.

Moreover, direct-to-consumer revenue increased 9% compared to the prior year period (increased 9% on a constant currency basis), with growth in all regions in both the Company’s owned and operated stores and digital commerce business. Owned and operated digital commerce revenue increased 10% compared to the prior year period. Wholesale revenue decreased 10% compared to the prior year period (decreased 12% on a constant currency basis. Total digital revenue increased 1% compared to the prior year period

PVH in the fourth quarter of FY 23 has reported the adjusted earnings per share of $3.72, beating the analysts’ estimates for the adjusted earnings per share of $3.52. The company had reported the flat adjusted revenue growth to $2.49 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $2.42 billion. The beat comes as gross margins were boosted amid ongoing progress on its PVH+ plan that seeks to boost the growth of its Calvin Klein and Tommy Hilfiger brands. Gross margin rose to 60.3% from 55.9% in the prior year period. Inventory decreased 21% compared to the prior year period.

Looking ahead to 2024, EPS was guided to a range of $10.75 to $11.00, with revenue projected to decrease 6% to 7% as compared to 2023, compared with analyst estimates for EPS of $12.08. Operating margin is projected to be approximately flat compared to 10.1% in 2023.

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