PVH - Embedded Expectations Analysis - 2019 04 25
PVH Corp. (PVH:USA) currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 17.6x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about their ability to sustain Tommy Hilfiger revenue growth, Calvin Klein brand repositioning efforts, and digital customer engagement.Specifically, management may be exaggerating the strength of Calvin Klein and Tommy Hilfiger in the Asian and European markets, and their ability to expand their businesses in those regions. In addition, they may lack confidence in their ability to sustain Tommy Hilfiger international revenue growth, continue to beat EPS guidance, and gain international market share, particularly in Europe. Moreover, they may be concerned about their decision to eliminate high-end offerings from Calvin Klein, and may be overstating the potential of Tommy Hilfiger sportswear outside of Tier 1 department stores. Also, they may lack confidence in their ability to execute a top-line turnaround for Calvin Klein, and leverage consumer data to improve their digital-first approach to customer engagement.
PVH is a branded apparel company. The company designs and markets branded dress shirts, neckwear, sportswear, jeanswear, performance apparel, intimate apparel, underwear, swimwear, swim products, handbags, accessories, footwear and other related products. The company also licenses the use of its trademarks to third parties and joint ventures. The company's businesses include: Tommy Hilfiger, which consists of the Tommy Hilfiger North America and Tommy Hilfiger International segments; Calvin Klein, which consists of the Calvin Klein North America and Calvin Klein International segments; and Heritage Brands, which consists of the Heritage Brands Wholesale and Heritage Brands Retail segments.
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