Can PVH Corp (PVH) Q2 Earnings Keep Its Solid Streak Alive?

PVH Corp. (NYSE:PVH) is slated to release second-quarter fiscal 2017 results on Aug 23. The question lingering in investors’ minds is whether this designer and marketer of branded apparel, footwear and other accessories will be able to deliver a positive earnings surprise in the quarter to be reported. The company has a splendid positive earnings surprise record of nearly 12 quarters now, while it has also topped sales estimates in the last three quarters. In fact, its solid performance helped it surge 36.7% so far this year, beating the industry’s 8.8% growth. So, let’s see how things are shaping up prior to this announcement.



What to Expect?

The current Zacks Consensus Estimate for the quarter under review is pegged at $1.65, reflecting year-over-year growth of over 12%. We noted that our earnings estimate has remained stable over the last 30 days. Further, analysts polled by Zacks expect revenues of roughly $2 billion, up about 5.2% from the year-ago quarter.

Factors at Play

PVH Corp.’s solid show even in the face of an uncertain macro environment mainly reflects the strength of its premium brands – Calvin Klein and Tommy Hilfiger. Apart from its diversified brand portfolio, the company has been gaining from the impressive trends at its international business. Management believes that the company’s superb execution, continued investments in brands and international platforms remain its growth drivers. Also, keeping pace with the evolving trends and undertaking necessary initiatives to stay afloat in the current business scenario is likely to help PVH Corp. sustain its solid momentum. These factors also encouraged the company to raise its fiscal 2017 outlook.

However, PVH Corp. remains cautious against the adverse foreign currency movements, which has long been a hurdle for the company. Also, volatility in the macroeconomic and geopolitical environment can impact performance. Considering all factors, the company projected total revenues to jump 5% year over year, in the second quarter. On a currency-neutral basis, revenues are anticipated to advance 7%. Adjusted earnings per share are expected to range from $1.60 - $1.63, including 7 cents negative impact from currency translations. Also, management expects witnessing a $20 million escalation in total marketing costs in the quarter, primarily accountable to Calvin Klein.

All said, let’s wait and see if PVH can keep its robust streak alive this time as well.

What the Zacks Model Unveils?

Our proven model does not conclusively show that PVH Corp.is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with ourEarnings ESP Filter.

PVH Corp. currently sports a Zacks Rank #1, which increases the predictive power of ESP. However, the company has an Earnings ESP of -0.61% as the Most Accurate estimate of $1.64 is pegged a notch below the Zacks Consensus Estimate. The combination of PVH Corp.’s Zacks Rank #1 and negative ESP makes surprise prediction difficult.

Stocks with Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Burlington Stores, Inc. (NYSE:BURL) has an Earnings ESP of +4.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Big Lots, Inc. (NYSE:BIG) has an Earnings ESP of +6.56% and a Zacks Rank #3.

DSW Inc. (NYSE:DSW) has an Earnings ESP of +3.45% and a Zacks Rank #3.

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