PVH Corp., Guess Fall After Reporting Earnings Late
Apparel designer Guess (GES) and PVH Corp. (PVH), the owner of Tommy Hilfiger and Calvin Klein, both fell after-hours following quarterly earnings, and the companies’ full-year profit outlooks remained below analyst expectations.
Estimates: First-quarter earnings per share to jump 36% to $2.25, on revenue of $2.257 billion, a 14% gain, according to Zacks Investment Research.
Results: EPS of $2.36; revenue rose 16% to $2.3 billion.
PVH also raised its full-year EPS outlook to $9.05-$9.15, up from $9.00-$9.10 and below views for $9.14.
Stock: Shares dipped 0.7% to 154.48 after-hours in the stock market today, grinding their way through a flat base with a 163.88 buy point. The stock has a Composite Rating of 90, out of a best-possible 99. Shares this month found support at their 50-day line.
Piper Jaffray, in a recent survey of teen consumer trends, said Tommy Hilfiger and Calvin Klein were among the brands that “made significant upward moves” in popularity. Hilfiger, the survey said, remained popular among males. Popularity in Calvin Klein’s handbags also held up, the survey said.
PVH also stands to benefit from a rebound in tourism spending in the U.S., Credit Suisse said in a research note in April.
Estimates: A net loss of 23 cents per share for the company’s fiscal first quarter, compared to a net loss of 24 cents a year ago. Zacks forecasts sales climbing 11% to $511 million.
Consensus Metrix forecasts North American retail same-store sales to rise 2.1%. In constant currency, same-store sales were expected to rise 1%.
Results: An adjusted net loss of 23 cents per share. Revenue rose 15% to $521 Million. Revenue in constant currency increased 8%. Retail comp sales in the company’s Americas segment rose 2% in U.S. dollars and 1% in constant currency.
The company forecast full-year adjusted EPS of 88-99 cents, below analysts’ estimates for 99 cents. For the second quarter, Guess forecast adjusted EPS of 27 to 30 cents, above expectations for 24 cents.
Stock: Shares fell 2% to 23.83, but remain well extended above buying range after breaking out in March.
Zacks analysts say Guess’s push in the Europe and Asia is paying off, helping drive sales and profits. The company has shrunk its footprint in the U.S., where competitive price cuts from retailers continue to restrain sales. In March, Guess said the U.S. accounts for 31% of its global business, down from 38%.
Zacks analysts also praise Guess’ efforts to connect physical stores to digital shopping. Its e-commerce businesses in Europe and in China are growing.
But the stock, whose value has more than doubled over the past year, is also getting expensive, they warn. Much of the company’s run higher came after its fourth-quarter earnings, reported in March, topped expectations. Those results got a lift from the holidays. Black Friday is popular in Europe too, management noted.
CEO Victor Herrero said he believed that 2018 marked “the beginning of a turnaround” for Guess. Co-founder Paul Marciano in February stepped back from his day-to-day responsibilities after an investigation was launched into sexual misconduct allegations against him by model Kate Upton and others.
Shares of Guess crashed on Feb. 1. A day earlier, Upton said Marciano “shouldn’t be allowed to use his power in the industry to sexually and emotionally harass women.”
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