Yahoo Finance Why Did PVH Raise Its Fiscal 2016 Guidance?
PVH Has 1Q16 Earnings Beat: Calvin Klein Is the Show-Stopper
Company guidance for fiscal 2016
Phillips-Van Heusen (PVH) posted a strong performance in fiscal 1Q16, with continuous momentum in its international businesses. PVH thus raised its 2016 EPS (earnings per share) guidance from $6.30–$6.50 to $6.45–$6.55. The company is anticipating a $1.55 per share negative impact from foreign currency exchange rates due to a stronger US dollar. Aside from that negative impact, the company will register EPS growth of 13%–15% over 2015.
Revenue drivers for fiscal 2016
PVH is expecting an increase of about 2% in revenues for fiscal 2016 on a constant currency and GAAP basis. According to company guidance, the following will most likely be the key drivers for this increase:
~5% increase in the Calvin Klein business on a constant currency basis
~5% increase in the Tommy Hilfiger business on a constant currency basis
~8% decline in the Heritage Brands business due to exiting the IZOD retail business and closing several licensed product lines in the dress shirt business
Management comments
Emanuel Chirico, PVH’s chairman and chief executive officer, said, “Looking ahead to the remainder of 2016, we are increasing our earnings guidance on a non-GAAP basis for the year, while continuing to take a prudent approach to planning our business, as foreign currency and global consumer spending remain unpredictable and the U.S.retail market is increasingly volatile and promotional.”
Chirico added, “We remain focused on the strategic opportunities recently announced, including the acquisition of the 55% interest in our Tommy Hilfiger China joint venture that we did not previously own, the formation of a joint venture in Mexico for all of our brands and the licensing of our Tommy Hilfiger wholesale womenswear businesses in the U.S. and Canada to G-III.”
Investors who want exposure to PVH and other apparel companies such as Coach (COH), Hanesbrands (HBI), Michael Kors (KORS), and Ralph Lauren (RL) can consider the SPDR S&P 500 ETF (SPY). SPY invests 0.25% of its portfolio in these companies.
Next, let’s see what we can expect from PVH in 2Q16.
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