Calvin Klein parent PVH shares climb 7% after restructuring and earnings guidance announced
PVH Corp. shares are up 7.3% in Friday trading after the fashion company announced earnings guidance for the fourth quarter and detailed a restructuring of the Calvin Klein brand. PVH's portfolio also includes Tommy Hilfiger and Speedo. PVH expects fourth-quarter adjusted earnings per share of "at least" $1.75, ahead of the $1.70 FactSet consensus. Full-year 2018 EPS is expected to be "at least" $9.50, also ahead of the $9.45 FactSet guidance. PVH will shutter the Calvin Klein flagship in New York City, relaunch the CALVIN KLEIN 205W39NYC business, focus on digital, and streamline the jeans and sportswear business. UBS analysts say the announcement signals "three bullish points": the Calvin Klein brand isn't getting weaker, concerns that China and Europe would hurt PVH aren't coming to pass, and the Calvin Klein denim business isn't a drag on earnings. UBS rates PVH stock buy with a price target of $145. Talking about the Calvin Klein announcement, D.A. Davidson says, "[W]e applaud these moves because they are opportunistically pro-active and are consistent with our view that the company has upside opportunity to expand its millennial target market; further positioning PVH as a digital-first portfolio of brands." D.A. Davidson rates PVH stock buy with a 12-to-18-month target of $134. PVH shares have slumped 25.5% over the last year while the S&P 500 index is down 6.5% for the period.
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