PVH Corp. (NYSE:PVH) Just Reported Earnings, And Analysts Cut Their Target Price

PVH Corp. (NYSE:PVH) just reported its fourth-quarter and full-year 2024 earnings, and the results were a mixed bag. While the company exceeded earnings per share (EPS) expectations, revenue fell short of analyst projections, leading to a cut in target prices. The apparel giant, known for its iconic brands Calvin Klein and Tommy Hilfiger, has been navigating a challenging macroeconomic environment, and the latest earnings report reflects both its strengths and weaknesses.



The company reported a non-GAAP EPS of $3.27 for the fourth quarter, surpassing the guidance of $3.05 to $3.20. For the full year, the non-GAAP EPS was $11.74, exceeding the guidance of $11.55 to $11.70. These results indicate that PVH Corp. performed better than expected in terms of earnings. However, the revenue story was less rosy. The company reported a 5% decrease in revenue to $2.372 billion for the fourth quarter compared to the prior year period, which was better than the guidance of a decrease of 6% to 7%. On a constant currency basis, the revenue decreased by 2%, which also exceeded the guidance of a decrease of 4% to 5%. For the full year, revenue decreased by 6% to $8.653 billion, which was in line with the guidance of a decrease of 6% to 7%.

Several factors contributed to these discrepancies. One key factor was the strength of PVH Corp.'s two iconic global brands, Calvin Klein and Tommy Hilfiger. The company's disciplined execution of its multiyear brand-building growth plan, the PVH+ plan, also played a significant role. Additionally, the company increased its gross margin by 120 basis points to a new record and maintained its double-digit EBIT margins at 10%, despite the fixed cost deleveraging from its Europe business. These factors collectively contributed to the company's better-than-expected performance.

However, analysts were quick to point out the challenges ahead. The company's strong holiday performance, which beat expectations, and the growth in both its D2C and wholesale channels, excluding the sale of its heritage business and the 53rd week in 2023, also supported the planned return to growth during 2025. The company's focus on driving cost efficiencies across the company and its ability to deliver a strong holiday performance despite a tough macroeconomic environment further contributed to the positive earnings report.

Despite the positive earnings report, analysts cut their target price for PVH Corp. shares. The consensus rating for the company is now a "Moderate Buy," with an average rating score of 2.53 based on 8 buy ratings, 7 hold ratings, and no sell ratings. The company's average rating score is 2.53, and is based on 9 research reports in the past 90 days, demonstrating strong analyst interest in this stock.

The company's strong financial performance and strategic initiatives have been effective in driving growth and profitability in the current market conditions. However, the challenging macroeconomic environment and the company's strategic reduction of sales in Europe to drive overall higher quality of sales in the region have led to a cut in target prices by analysts. The company's focus on driving cost efficiencies across the company and its ability to deliver a strong holiday performance despite a tough macroeconomic environment further contributed to the positive earnings report.