Here’s why PVH Corp (PVH) is on the verge of beating third quarter earnings
PVH Company PVH is expected to record annual growth in revenue and bottom line when it releases its third quarter fiscal 2021 results on December 1. 56.8% compared to the quarter of the previous year. The consensus mark for earnings has risen by a dime in the past seven days.
The consensus mark for quarterly revenue stands at $ 2.4 billion, indicating a 13.4% improvement over the previous year’s figure.
In the last quarter published, the company made a surprise profit of 128.6%. Its net income has exceeded estimates by 177.5%, on average, over the past four quarters.
PVH Corp. Award and BPA Surprise
PVH Corp. price-eps-surprise | PVH Corp. Quote
Key factors to note
PVH Corp benefited from the strength of its brand, particularly Calvin Klein and Tommy Hilfiger, supported by growing market share and strong demand. The business benefited from improved store traffic, reflecting significant growth over the previous year, due to the reopening of stores and reduced restrictions.
PVH has witnessed a boost in the digital sector as customers have turned to online shopping. Robust growth in all regions and all brands could also have driven revenue in the digital commerce sector in the third quarter of the fiscal year. The company’s initiatives to expand its digital business and strengthen its network with third-party digital partners are expected to have contributed to digital sales growth in the fiscal third quarter. Investments in omnichannel capabilities and inventory improvement are also auspicious.
The company is likely to have seen continued momentum in the international unit during the third fiscal quarter, driven by strong performance in Europe. When calling last quarter’s results, management predicted that the international business is expected to record higher revenues than in the second quarter of fiscal 2019 for the remainder of the year. This indicates that the momentum in international business will likely continue in the third quarter of the fiscal year.
It has seen favorable margin trends in recent quarters, which are expected to continue into the third fiscal quarter. Gross margin may have benefited from lower promotional sales and strong performance in all regions. When releasing last quarter results, management expected gross margin to improve for the remainder of the year, supported by fewer promotional sales and a favorable change in the mix of regional sales.
However, PVH Corp has witnessed an increase in costs in recent quarters. Management has forecast high transportation and other logistics costs in the second half of fiscal 2021 compared to the first half. As a result, continued cost pressures are expected to be reflected in the Company’s third quarter tax results. It also projects around $ 60 million in pre-tax costs related to restructuring measures, including downsizing in a few international markets and reducing the real estate footprint, including some store closures and reduced office space.
PVH Corp’s North America unit has been performing poorly for some time, which is expected to continue into the third fiscal quarter. Although the company is focused on streamlining the North American business, management predicted that the unit would remain lackluster as international tourism is not expected to return to growth in fiscal 2021. At the same time, PVH Corp continues to expect COVID-19 uncertainty to hurt profits. and revenues in the second half, reflecting the impacts of the third fiscal quarter.
Our proven model conclusively predicts higher profits for PVH Corp this time around. The combination of a positive earnings ESP and a Zacks # 1 (strong buy), 2 (buy) or 3 (hold) ranking increases the chances of a winning payout. You can discover the best stocks to buy or sell before they are flagged with our ESP Earnings Filter.
PVH Corp has a Zacks Rank # 2 and an ESP of +1.61% earnings.
Actions to consider
Here are a few other companies you might want to consider, as our model shows that they too have the right mix of elements to show a profit beat this season:
lululemon athletics LULU currently has an ESP profit of +1.44% and a Zacks ranking of 2. The company is expected to see both revenue and earnings growth when it releases third quarter fiscal 2021 figures. Zacks’ consensus estimate for LULU’s quarterly revenue is set at $ 1.43 billion, which suggests growth of 28.1% from the previous year quarter.
You can see The full list of today’s Zacks # 1 Rank stocks here.
Zacks’ consensus estimate for lululemon’s quarterly earnings has risen by a dime over the past 30 days to $ 1.37 per share, suggesting a decline of 19.8% from the figure released earlier. a year. However, LULU has recorded an average profit of 25.2% over the past four quarters.
Clothing group GIII GIII currently has + 8.14% Revenue ESP and Zacks # 3 rank. GIII is expected to post revenue and bottom line growth when releasing its third quarter fiscal 2021 results. Zacks’ consensus estimate for quarterly earnings rose 2.3% in the year. price over the past 30 days at $ 1.79 per share, suggesting growth of 36.6% from the number released last year.
Zacks’ consensus estimate for quarterly revenue for GIII Apparel is set at $ 1.01 billion, indicating a 22.4% improvement over the figure reported in the previous year’s quarter. GIII has posted a profit of 180.5%, on average, over the past four quarters.
General dollar DG currently has + 0.79% Revenue ESP and Zacks Rank 3. DG is expected to record revenue growth when it releases figures for the third quarter of fiscal 2021. Zacks’ consensus estimate for its quarterly revenue is set at $ 8.51 billion, which suggests a growth of 3.7% compared to the figure reported in the quarter of the previous year.
Zacks’ consensus estimate for Dollar General’s quarterly earnings has remained unchanged over the past 30 days at $ 2.02 per share, suggesting a 12.6% decline from the previous year’s quarter. DG has recorded a profit of 12.1% on average over the last four quarters.
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