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Factors Likely to Influence PVH Corp's (PVH) Q1 Earnings
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PVH Corporation (PVH - Free Report) is slated to release first-quarter fiscal 2020 results on Jun 11. In the last reported quarter, the company delivered a positive earnings surprise of 4.44%. Moreover, its bottom line beat estimates by 4.9%, on average, over the trailing four quarters.
The Zacks Consensus Estimate for the company’s fiscal first-quarter loss is pegged at $1.15. In the prior-year quarter, the company had reported earnings of $2.46 per share. Its estimates have been negatively revised by 38 cents in the past seven days. The consensus mark for quarterly revenues is pegged at $1.5 billion, implying a 36.3% decline from the year-ago reported number.
Key Factors to Note
On its last quarter earnings call, PVH Corp. had predicted significant impact from the coronavirus outbreak on its results for the first quarter and fiscal 2020.
The company stated that its operations in first-quarter fiscal 2020 will likely be impacted by virus-related concerns, reduced travel, temporary store closures and government-imposed restrictions. The actions have led to a significant reduction in traffic and consumer spending as well as a slowdown in sales at its retail stores in nearly all key markets. Additionally, the company’s wholesale customers and licensing partners are witnessing similar trends. Further, PVH Corp. and its licensing partners are witnessing supply-chain disruptions, which are expected to have mounted up due to the closure of factories or operations with a limited workforce.
However, in April, PVH Corp. announced several steps to cut down on expenses and protect its cash position. Among these, it suspended cash compensation for board members, reduced salary and compensation for other executives and workers, and kept hiring and increments on hold for 2020. It also furloughed or reduced working hours for about 75% of store, warehouse and office associates in North America, where the company has most of its workforce. While employees with reduced working hours have been paid accordingly, furloughed workers have not received any pay.
The company also curtailed capital expenditure, marketing spend and other discretionary expenses. It undertook tough inventory management with an aim to lower working capital. Additionally, to enhance financial flexibility amid the pandemic, PVH Corp. has drawn $750 million from its revolving credit facility of more than $1 billion.
While these efforts are likely to reduce costs and improve cash to some extent, the dwindling effect of the pandemic is likely to reflect in the company’s top and bottom line for the fiscal first quarter.
Zacks Model
Our proven model does not predict an earnings beat for PVH Corp. this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
PVH Corp. has an Earnings ESP of -25.22% and a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
eBay Inc. (EBAY - Free Report) presently has an Earnings ESP of +3.09% and a Zacks Rank #2.
Fastenal Company (FAST - Free Report) currently has an Earnings ESP of +5.88% and a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Factors Likely to Influence PVH Corp's (PVH) Q1 Earnings
PVH Corporation (PVH - Free Report) is slated to release first-quarter fiscal 2020 results on Jun 11. In the last reported quarter, the company delivered a positive earnings surprise of 4.44%. Moreover, its bottom line beat estimates by 4.9%, on average, over the trailing four quarters.
The Zacks Consensus Estimate for the company’s fiscal first-quarter loss is pegged at $1.15. In the prior-year quarter, the company had reported earnings of $2.46 per share. Its estimates have been negatively revised by 38 cents in the past seven days. The consensus mark for quarterly revenues is pegged at $1.5 billion, implying a 36.3% decline from the year-ago reported number.
Key Factors to Note
On its last quarter earnings call, PVH Corp. had predicted significant impact from the coronavirus outbreak on its results for the first quarter and fiscal 2020.
PVH Corp. Price and EPS Surprise
PVH Corp. price-eps-surprise | PVH Corp. Quote
The company stated that its operations in first-quarter fiscal 2020 will likely be impacted by virus-related concerns, reduced travel, temporary store closures and government-imposed restrictions. The actions have led to a significant reduction in traffic and consumer spending as well as a slowdown in sales at its retail stores in nearly all key markets. Additionally, the company’s wholesale customers and licensing partners are witnessing similar trends. Further, PVH Corp. and its licensing partners are witnessing supply-chain disruptions, which are expected to have mounted up due to the closure of factories or operations with a limited workforce.
However, in April, PVH Corp. announced several steps to cut down on expenses and protect its cash position. Among these, it suspended cash compensation for board members, reduced salary and compensation for other executives and workers, and kept hiring and increments on hold for 2020. It also furloughed or reduced working hours for about 75% of store, warehouse and office associates in North America, where the company has most of its workforce. While employees with reduced working hours have been paid accordingly, furloughed workers have not received any pay.
The company also curtailed capital expenditure, marketing spend and other discretionary expenses. It undertook tough inventory management with an aim to lower working capital. Additionally, to enhance financial flexibility amid the pandemic, PVH Corp. has drawn $750 million from its revolving credit facility of more than $1 billion.
While these efforts are likely to reduce costs and improve cash to some extent, the dwindling effect of the pandemic is likely to reflect in the company’s top and bottom line for the fiscal first quarter.
Zacks Model
Our proven model does not predict an earnings beat for PVH Corp. this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
PVH Corp. has an Earnings ESP of -25.22% and a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Guess, Inc. (GES - Free Report) currently has an Earnings ESP of +12.75% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
eBay Inc. (EBAY - Free Report) presently has an Earnings ESP of +3.09% and a Zacks Rank #2.
Fastenal Company (FAST - Free Report) currently has an Earnings ESP of +5.88% and a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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