A month has gone by since the last earnings report for PVH (PVH). Shares have lost about 3.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is PVH due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

PVH's Q3 Earnings & Revenues Beat Estimates

PVH Corp reported better-than-expected results in the third quarter of fiscal 2024, wherein both earnings and topped the Zacks Consensus Estimate. The bottom line improved while the top line fell year over year.

Let’s Delve Deeper Into PVH’s Q3 Performance

PVH reported adjusted earnings of $3.03 per share, up 4.5% from the year-ago quarter's $2.90. The bottom line also beat the Zacks Consensus Estimate of earnings of $2.61 per share and the company’s guidance of $2.50. The figure included the positive impacts of foreign currency translations of 5 cents a share.

Revenues fell 5% year over year (down 6% at constant currency) to $2,255 million but beat the consensus mark of $2,228 million. Management had guided a revenue decline of 6-7% and 7-8% on a constant currency basis. This included a 2% drop from the sale of the Heritage Brands women’s intimates business last year.

The company's gross profit of $1.3 billion dipped 1.5% year over year. The gross margin expanded 170 bps to 58.4% due to a favorable shift in channel mix and a fall in sales to low-margin wholesale accounts.

PVH’s Segmental Analysis

Revenues for the Calvin Klein segment were down 2.8% year over year (down 3.9% on a constant currency basis). The segment recorded a 0.8% jump (down 0.9% in constant currency) at Calvin Klein International and 9% decrease at Calvin Klein North America mainly due to the timing of wholesale shipments.

Revenues for the Tommy Hilfiger brand dropped 0.7% year over year (down 2.4% in constant currency). Revenues were flat year over year (down 2.4% in constant currency) in Tommy Hilfiger International, mostly due to reduced sales in Europe. Revenues at Tommy Hilfiger North America dipped 3% year over year.

The Heritage Brands segment's revenues plunged 54% year over year. This included a 44% year-over-year decline in the sale of the Heritage Brands women's intimates business.

A Closer Look at PVH's Financial Performance

PVH ended the fiscal third quarter with cash and cash equivalents of $0.6 billion, long-term debt of $1.7 billion and stockholders' equity of $5.3 billion.

In alignment with the PVH+ Plan's objective to return excess cash to shareholders, the company executed the repurchase of 300,000 shares of its common stock, amounting to $29 million in the reported quarter.

What to Expect From PVH in Q4 & FY24

For the fourth quarter, revenues are projected to decline in the range of 6-7% (down 4-5% in constant currency) from the year-ago quarter, including a 1% reduction related to the Heritage Brands sale and a 3% fall from the 53rd week last year.

For fiscal 2024, the company still anticipates a year-over-year revenue decline in the range of 6-7%, which is consistent on a constant currency basis. This includes a 2% reduction due to the divestiture of the Heritage Brands women’s intimates business and a 1% impact from the 53rd week in fiscal 2023.

PVH expects the adjusted operating margin to be nearly flat compared with 10.1% in fiscal 2023. On a GAAP basis, the operating margin is likely to be about 9.2%, down from 10.1% projected earlier. 
 
Management now envisions non-GAAP EPS to be in the range of $11.55-$11.70 compared with the earlier view of $11.55-$11.80. GAAP EPS is expected to be in the band of $10.55-$10.70 compared with the prior guidance of $11.20-$11.45. The company recorded non-GAAP EPS of $10.68 and GAAP EPS of $10.76 in fiscal 2023. The EPS guidance for fiscal 2024 includes a negative impact of around 15 cents per share from currency movements.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -9.96% due to these changes.

VGM Scores

At this time, PVH has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, PVH has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

PVH Corp. (PVH) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research