Stefan Larsson needs to spark a little more PVH+ positivity on Wall Street after cutting PVH Corp.’s earnings guidance this year on the back of consumer weakness, tariff costs and operational difficulties at Calvin Klein.
Shares of the company fell 18 percent to $66.35 on Wall Street Thursday as investors digested a first-quarter report that, while ahead of plan, foretold some trouble ahead.
Adjusted operating margins — which stood at 10 percent last year and 10.1 percent the year before — are now projected to slip to 8.5 percent this year.
Tom Nikic, an analyst of Needham & Co., described the quarterly report as a “messy print,” but said the stock still “looks too cheap.”
“While we understand investors’ disappointment, particularly regarding the direction of margins, the stock is currently trading at just 6-times current 2025 EPS guidance,” Nikic said in a research note. “The magnitude of the sell-off feels overdone, however, and medium-term risk/reward should be skewed positively. But management has a lot of work to do to improve investor sentiment in this beaten-down stock.”
Shares of PVH are down more than 46 percent over the past year, leaving the company with a market capitalization of $3.2 billion.
UBS analyst Jay Sole also saw the stock’s valuation as “cheap” and he said the “challenging” first quarter did not shake him from his buy rating on the company.
“We are positive on PVH’s long-term [earnings per share] growth prospects,” Sole said. “The big question is if the Calvin Klein and Tommy Hilfiger brands remain strong: We believe these brands are building momentum due to improved product and marketing. PVH’s issues are mainly operational and macro related, in our view. We believe the operational issues get resolved sooner rather than later.”
Stefan Larsson, chief executive officer, who has been remaking the company with his PVH+ strategic plan, told analysts on a conference call: “While we have to recognize this evolved backdrop, all our focus is on what was within our control to strengthen and expand the impact of our own PVH+ actions. And in moments like this, when the external factors get worse, is the time to sharpen our focus, get even closer to the consumers and expand our execution.
“We have our sleeves rolled up, focusing 100 percent on what’s within our control to improve the back half of the year by broadening and scaling our successful PVH+ plan initiatives,” the CEO added. “We are on a multiyear journey to unlock the full potential of Calvin, Tommy and PVH.”
At the end of the quarter, inventory was up 19 percent from a year earlier, which PVH attributed to “a purposeful investment in core product inventory to improve overall availability, an increase in inventory to support the projected sales growth in the second quarter, and earlier receipts of summer season product to improve in-season stock availability.”
This was already going to be a year of change for PVH, which took back control of key Calvin Klein licenses from G-III Apparel Group and rolled out women’s sportswear to 150 Macy’s doors. That and the move to a global product kitchen for Calvin Klein hit a few snags and hurt margins, but the company said the impact is only temporary.
Some of the more specialized businesses brought back in from G-III are going out again to other producers.
PVH said it inked a licensing agreement with Herman Kay-Mystic to produce men’s and women’s outerwear for both Calvin Klein and Tommy Hilfiger in the U.S. and Canada with the launch set for spring 2026.
