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.

models wearing tommy hilfiger spring 2023
Spring looks from Tommy Hilfiger.

“PVH’s ‘global bestsellers’ strategy, a key component of the PVH+ plan, is just getting underway in North America, yet contributed to PVH’s big 4Q sales beat,” Sole said. “This is a proof point indicating the strategy will work.”

Wells Fargo analyst Ike Boruchow was leaning the same direction and described the strong earnings beat with better guidance “a rarity.”

“PVH is bucking the trend. Better demand trends and improving margins are an outlier today, and management is committed to their 15 percent margin goal by fiscal year 2025,” Boruchow said. “It’s clear PVH’s strategies around supply chain, brand elevation and distribution are gaining steam, and we remain bullish on the name.”

The company’s 2022 growth proved to be widespread with revenues, adjusted for currencies and the Russia exit, up 10 percent in Europe, 11 percent in Asia and 9 percent in North America.

“Both Calvin and Tommy delivered increased strength in product with hero products across key categories and in our consumer engagement with cut-through campaigns, collaborations and world-class talent partnerships,” Larsson said.

Both brands are making high-profile overtures to consumers, who are clicking online and liking Shawn Mendes for Tommy Hilfiger, Kendall Jenner for Calvin Klein along with a constellation of other celebrity connections.

“The PVH+ plan is about leaning into each of these iconic brands’ main product categories,” Larsson said. “And we were able to get traction on that. There are lead times. So we set out to do that a year ago. And what you can see in the fourth quarter was that we were starting to get traction.

“So starting to get early traction on the product category focus, starting to get traction in Q4 on developing some of the best hero products in the market, the most important products in the consumers’ wardrobe,” he said. “And then we were able to really deliver cut-through campaigns with world-class talent.”

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