Fashion brand PVH Corp (NYSE: NYSE:PVH) stock is down (-47%) on the year, but the company is still profitable. PVH gave lowered guidance moving forward despite selling out at full price, remaining strong as consumers continue to prove resilient in denim, shirts, and woven top categories for both its premium Calvin and Tommy brands.
The new CEO has implemented its strategic growth plan known as the PVH+ Plan to help drive growth for several years. The plan seeks to unlock the full potential of its two iconic brands, Calvin Klein and Tommy Hilfiger, powered by five growth drivers, including data-driven, digital-first, and e-commerce improvements.
The company continues to focus on Gen-Z demographics through social media like TikTok and Instagram with its #onlyinmycalvins hashtag challenge that generated 22 million followers in May 2022. Prudent investors that have been patiently waiting to scale into an iconic premium retail apparel brand at 6X forward earnings value levels can watch for opportunistic pullbacks in shares of PVH Corp.
Q1 Fiscal 2022 Earnings Release
On Jun. 1, 2022, PVH released its first-quarter fiscal 2022 results for the quarter ending April 2022. The company reported earnings-per-share (EPS) of $1.94 excluding non-recurring items beating consensus analyst estimates of $1.60 by $0.34. Revenues grew 2.1% year-over-year (YoY) to $2.12 billion beating estimates for $2.09 billion.
The company plans to increase its stock buyback by $400 million in 2022 following its recent $1 billion buyback authorization. PVH CEO Stefan Larsson commented, “This performance is just the beginning of our multi-year journey to execute the PVH+ Plan – our strategic growth plan that we unveiled at our recent Investor Day.
The plan is centered around winning with the consumer through our brand-focused, direct-to-consumer, and digitally-led approach across each of our regions to unlock the full potential of our two global iconic brands, Calvin Klein and TOMMY HILFIGER. Looking ahead, we are encouraged by the sustained momentum of our underlying trends and remain confident in our full-year outlook. While we are mindful of and continue to navigate through the global macroeconomic headwinds, we are proactively managing our business to deliver on our commitments, drive growth and create long-term value.”
Downside Guidance
PVH lowered its guidance for fiscal Q2 2022 EPS over $2.00 versus $2.28 consensus analyst estimates on revenues coming in between $2.22 billion to $2.24 billion versus $2.25 billion analyst estimates. The company lowered fiscal full-year 2022 EPS to $9.00 versus $9.01 consensus analyst estimates on revenues of $9.25 billion to $9.34 billion compared to $9.38 billion analyst estimates.
Conference Call Takeaways
CEO Larsson credited the execution of its PVH+ plan to drive momentum and a 10% EBIT margin. He expects the company to hit double-digit top and bottom-line growth for 2022 despite the volatile backdrop, including supply chain disruption, China lockdowns, the Ukraine war, and inflationary pressures. The PVH+ Plan will drive strategic growth for many years. The plan will improve brand, digital, and direct-to-consumer through five drivers.
Calvin and Tommy's strength is attributed to both being premium brands. COVID lockdowns in China did impact the quarter, but Korea and Australia have seen strong sales recovery. The company will continue to expand brand awareness in China with impactful brand campaigns starting with the June 18 Chinese Valentine’s Day.
The company is accelerating innovation with new digital commerce platforms, including personalization and social and digital gamification. Live streaming events have generated a significant increase in GMV and new followers. The company continues to focus on younger Gen Z consumers by introducing the #onlyinmyclavins global hashtag challenge on TikTok across ten countries and Instagram, hitting 22 million followers in May.
PVH teamed with Palace streetwear to launch CK1 Palace to record sell-outs and global consumer engagement. The strategic marketing campaign included social media posts with key talent, short files, and around-the-block lines at Palace stores in Tokyo, London, L.A., and New York. This resulted in nearly a complete sell-out in the first week, with 85% of sales driven by new tower sites or reactivated customers.
PVH Opportunistic Pullback Price Levels
Using the rifle charts on the weekly and daily time frames provides a precise view of the landscape for PVH stock. The weekly rifle chart triggered an inverse pup breakdown on the break of the $66.56 Fibonacci (fib) level. The inverse pup breakdown has a falling 5-period moving average (MA) resistance at $63.68, followed by the 15-period MA at $70.06.
The weekly lower Bollinger Bands (BBs) sit at $45.25. The weekly stochastic rejected and crossed back down under the 20-band. The weekly market structure low (MSL) buy triggered the breakout above $40.26. The daily rife chart also formed an inverse pup breakdown with a falling 5-period MA at $58.61, followed by the 15-period MA at $60.69.
The daily lower BBs sit at $50.72 as the stochastic forms another mini inverse pup under the 20-band. The daily 50-period MA is falling at $66.98. Prudent investors can watch for opportunistic pullback levels sit at the $53.99 fib, $49.11 fib, $46.23 fib, $44.22 fib, $40.26 weekly MSL trigger, $37.26 fib, $33.12 fib, and the $31.61 fib level. Upside trajectories range from the $69.81 fib to the $86.95 fib level.