PVH’s 3Q Profit Beats The Street; Guggenheim Lifts PT

Shares of PVH Corp. rose 1.9% in Wednesday’s extended market trading after the apparel company reported better-than-expected 3Q results, driven by a strong recovery in Europe and China.

PVH’s (PVH) 3Q earnings of $1.32 per share declined 57.4% year-over-year but surpassed the Street’s estimates of $0.24. Its revenues of $2.1 billion fell 18% but came ahead of the consensus estimate of $2 billion.

Meanwhile, PVH’s revenues from digital channels grew 36%, while sales via its directly operated digital commerce businesses jumped 70% year-over-year. PVH’s CEO Emanuel Chirico said, “We have outperformed our Holiday season expectations in the fourth quarter to date, including Singles’ Day in Asia and our Black Friday promotions in North America and Europe, with particular strength across the digital channels.”

As for 4Q, the company expects its revenues to decline approximately 20% year-over-year, due to continued uncertainty related to COVID-19 and despite the recovery throughout Europe and North America. (See PVH stock analysis on TipRanks)

Following the results, Guggenheim analyst Robert Drbul raised the stock’s price target to $100 (20.1% upside potential) from $90 and maintained a Buy rating citing “increased conviction on a retail normalization in 2021.” He added, “PVH will be emerging from COVID as a more profitable and leaner company due to cost actions taken to preserve financial strength during the crisis.”

The rest of the Street is sidelined on the stock. The Hold analyst consensus is based on 5 Holds, 3 Buys and 1 Sell. The average price target stands at $68 and implies downside potential of about 18.4% to current levels. Shares have dropped by 20.8% year-to-date.

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