Will PVH Corp's (PVH) Decent Run Continue in the New Year?
PVH Corp. PVH looks well poised to maintain the vigor going into the New Year, courtesy of sound fundamentals and growth efforts. Shares of this New York-based company have rallied approximately 14% in past six months compared with the industry’s growth of 5.7%. In the past three months, this Zacks Rank #3 (Hold) stock has gained 23%, outpacing the industry’s growth of 13.3%.
Also, the stock’s Momentum Score of A indicates that the uptrend is likely to continue in the near future. Notably, the Zacks Consensus Estimate for fiscal 2020 top and bottom line indicates year-over-year improvement of 3.5% and 6.6%, respectively.
Clearly, the stock is benefiting from the underlying power of Tommy Hilfiger and Calvin Klein brands, which positions the company well to deliver sustainable growth. Also, PVH Corp has been trying to woo millennials. It is focused on diversifying its brand portfolio. However, softness at Heritage Brands owing to a challenging retail landscape cannot be ignored.
Endeavors to Drive Stock Momentum
PVH Corp’s Tommy Hilfiger brand has been experiencing solid momentum and market share gains since the last few quarters. In fact, the brand’s performance, particularly in the international regions, remained sturdy in third-quarter fiscal 2019 backed by a stellar show in Europe and gains from the acquisition of Tommy business in Australia, which was previously a licensed business. Also, the buyout of Tommy Hilfiger retail business in Central and Southeast Asia from the company’s prior licensee in that market (the TH CSAP acquisition) aided its performance.
In the fiscal third quarter, revenues at Tommy Hilfiger segment improved 10% while international revenues grew 16%. Strength in the Tommy Hilfiger brand is likely to continue, evident from management’s expectations. For the current fiscal year, revenues at Tommy Hilfiger are now anticipated to increase roughly 6%, up from 5% growth projected earlier. Revenues at the brand are expected to increase 4% in the fiscal fourth quarter.
PVH Corp’s approach toward brand management facilitates each of its brands to develop further through effective marketing strategies, financial control and operating leverage. Apart from robust brand-management initiatives, the company remains committed to enhancing its shareholders’ value through constant share repurchases. For fiscal 2019, it intends to repurchase shares worth nearly $300 million.
Thus, there are plenty of reasons to be optimistic about the stock going into the New Year.
3 Stocks to Consider
Crocs, Inc CROX has a long-term earnings growth rate of 15% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Zumiez Inc ZUMZ has a long-term earnings growth rate of 12% and a Zacks Rank #1.
lululemon athletica inc LULU has a long-term earnings growth rate of 12% and currently carries a Zacks Rank #2 (Buy).
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