PVH, the owner of the Tommy Hilfiger and Calvin Klein brands, among others, reported fiscal second-quarter adjusted earnings of $1.51 a share, above the company's previous guidance of $1.40 to $1.45 a share and compared with $1.39 a share in the year-earlier quarter. The New York-based company reported GAAP earnings of $1.52 a share for the quarter ended Aug. 3.
PVH's revenue rose 4% from last year to $1.98 billion. Revenue excludes the Bass business, which was sold during the fourth quarter of 2013. The revenue gains in the quarter were fueled by a 9% increase in the company's Tommy Hilfiger business. Sales from Calvin Klein inched 1% higher in the quarter, while the Heritage Brands business was flat compared with the prior year.
The company reaffirmed its full-year adjusted earnings guidance of $7.30 to $7.40 a share. Several sell-side analysts upped their price targets on the stock following the earnings report.
Here's what analysts are saying on Thursday.
Evren Kopelman, Wells Fargo Securities (Market Perform; $137-$141 valuation range)
Improved sales trends in August and the Q2 2014 EPS beat ($1.51 vs. consensus and our estimate of $1.42) are lifting the PE multiple on PVH shares today (9/4) as confidence is now higher around the achievability of H2 estimates. In addition, the company noted that inventory in the channel is clean. The beat in the quarter was from Tommy Hilfiger and better gross margins. PVH did not flow through the Q2 EPS beat to full-year guidance due to the negative impact from a weaker Euro in the H2 2014. We are slightly raising our FY2014/2015 EPS estimates to $7.40/$8.55 from $7.38/$8.50, and our valuation range is now $137-141 (from $127-132) based on 16-16.5x our 2015E EPS. We think that for the next real move in the stock, we need to wait to see sell-through trends on new CK product.