What happened
Week to date, shares of PVH (PVH -1.84%) were up 14% as of 12:56 p.m. ET on Friday, according to data provided by S&P Global Market Intelligence. The stock jumped following better-than-expected earnings results earlier this week.
So what
Revenue came in at $2.28 billion, beating the consensus analyst estimate that expected the company to report $2.23 billion. Excluding currency changes, revenue grew in the high-single digit range, which is solid in light of inflation and supply chain headwinds that retailers are struggling with. Management credited price increases and strong demand in North America, in addition to solid execution internationally.
Looking at each brand's performance, Tommy Hilfiger revenue rose 7% year over year on a constant-currency basis, while Calvin Klein turned in slightly better growth of 9%.
The company also blew away analysts' estimates on the bottom line, with earnings per share of $2.60 coming in $0.43 better than the $2.17 expected. This reflects disciplined cost management and execution, consistent with the PVH+ Plan that is designed to improve cash flows and deliver better shareholder returns.
Now what
Management now expects full-year revenue to be at the top end of the previous guidance range. This includes a decrease of 3% year over year, which is an increase of 4% excluding currency.
Overall, investors are looking at the earnings beat as a sign that PVH is building momentum heading into 2023. Management noted good progress on its growth strategy happening across the world. Specifically, Korean sales are up 22% in local currency year to date.
PVH looks like a promising turnaround story that is still trading at a cheap price-to-earnings ratio of less than 9 based on this year's earnings estimates.
