Yahoo Autos PVH Shares Soars as Wall Street Sees Signs of Traction
Wall Street gave Stefan Larsson’s new direction at PVH Corp. a big thumbs-up.
Shares of the Tommy Hilfiger and Calvin Klein parent jumped 20 percent to $88.36 on Tuesday after the company posted fourth-quarter earnings that were significantly better than expected and signaled full speed ahead for 2023.
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“We are coming into 2023 with strong momentum and expect to continue to grow our top line, led by outsized [direct-to-consumer] growth while planning to deliver EBIT margin expansion and double-digit EPS growth,” said Larsson, chief executive officer, on a conference call with analysts.
Larsson laid out his strategic plan, dubbed PVH+, just over a year ago and said that it is starting to take hold — underscoring that it is designed to help propel the company through macroeconomic woes.
The plan is led by a focus on key products backed up by high-profile marketing and also includes some supply chain savvy, borrowed from Larsson’s time at H&M, and cost discipline.
It’s an approach that resonates more with investors now that it seems to be showing up in the company’s finances. PVH’s adjusted fourth-quarter earnings per share came in at $2.38 — easily surpassing the $1.65 projected by analysts — while revenues, excluding the impact of the war in Ukraine, rose 9 percent in constant currencies. Both Tommy Hilfiger and Calvin Klein were stronger than projected.
Jay Sole, an analyst at UBS, said the company is now prepped to boost EPS by a double-digit compounded annual growth rate.
“CEO Stefan Larsson has only just begun executing his plan to improve PVH’s profitability and we think there are major margin unlocks that will play out over the next few years,” Sole said.
The analyst said the fourth-quarter result increased his conviction that Larsson’s strategic plan would work.
