PVH Corp. (NYSE:PVH) shares are trading lower after the company reported third-quarter results and provided soft guidance.
Sales came in at $2.255 billion, which beat the analyst consensus estimate of $2.220 billion.
Revenue in the company’s international businesses was flat year over year and down 2% on a constant currency basis.
Growth in the Asia Pacific region in local currency was offset by a strategic reduction in sales in Europe, aimed at driving higher-quality sales in the region.
In North America, revenue from the Tommy Hilfiger and Calvin Klein brands decreased by 6% year over year, partly due to a shift in wholesale shipments from the fourth quarter to the third quarter of the prior year.
Direct-to-consumer revenue was flat Y/Y (-1% Y/Y in constant currency).
Owned store revenue increased 1% year over year, while digital commerce revenue decreased 1% year over year (-3% year over year in constant currency), impacted by the strategic sales reduction in Europe.
Wholesale revenue declined 8% year over year (-9% year over year in constant currency), with a 4% year-over-year drop from the sale of the Heritage Brands women’s intimates business and the rest due to the reduction in Europe sales and North American shipment timing.
Gross margin improved by 170 basis points year over year to 58.4%, led by a favorable shift in channel mix and reduced sales to lower-margin wholesale accounts.
Adjusted EPS of $3.03 per share, which beat the analyst consensus estimate of $2.59.
Stefan Larsson, Chief Executive Officer, said, "Throughout the quarter, we drove powerful consumer engagement for both Calvin Klein and TOMMY HILFIGER, and continued to build momentum in product, with significantly improved sell-throughs for the Fall 24 season across all regions and both our iconic brands, and we are coming into the holiday season with a fresh and strong inventory composition."
Buyback: Under the PVH+ Plan, the company repurchased shares worth $29 million in the third quarter of 2024, bringing total repurchases for the first nine months to 2.4 million shares for $254 million.
The company expects to repurchase around $400 million in common stock for 2024.
Outlook: PVH expects fourth-quarter revenue to decrease by 6% to 7% and sees adjusted EPS of $3.05 to $3.20 vs. estimate of $3.71.
The company reaffirmed the fiscal year 2024 revenue decrease of 6% to 7% and revised adjusted EPS to $11.55-$11.70 (from $11.55-$11.80) versus the estimate of $11.73.
Investors can gain exposure to the stock via First Trust Cons. Discret. AlphaDEX (NYSE:FXD) and First Trust Mid Cap Value AlphaDEX Fund (NASDAQ:FNK).
Price Action: PVH shares are down 2.5% at $109.98 at last check Thursday.
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