PVH Corporation (PVH): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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PVH Corp. reported better-than-expected third-quarter fiscal 2014 earnings despite a competitive retail landscape and highly promotional environment. Moreover, we are optimistic on the company's growth prospects driven by sustained focus on brand building, asset management, global expansion and effective implementation of business strategies. That said, we believe PVH Corp. is on track to exploit opportunities in the lifestyle apparel market. The company's solid financial position also hints at a favorable future. However, the company's lowered outlook for the rest of fiscal 2014 based on foreign currency headwinds, keeps us on the sidelines. Further, it is prone to intense competition from peers and macroeconomic factors, which may impact its performance. Thus, we maintain our Neutral recommendation on the stock.


Headquartered in New York, PVH Corp. was incorporated in 1976 and was formerly known as Phillips-Van Heusen Corp. The company's roots have strengthened immensely since it was founded by Moses Phillips and his wife Endel in 1881, when the couple started their business by hand sewing shirts and selling them to local coal miners. Through its strategic acquisitions and brand expansion across the globe, the company has grown significantly. Having a legacy of over 130 years in making shirts, PVH Corp. has now become one of the world's largest branded apparel companies.

PVH Corp. specializes in the designing and marketing of branded dress shirts, neckwear, sportswear, jeanswear, intimate apparel, swim products, footwear, handbags and other related products. The company markets its products at a wholesale level through department store chains and directly to consumers through retail stores. The company's portfolio includes its owned and licensed brands. PVH Corp.'s owned brands include Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, ARROW, Warner's, Olga and Eagle. Its licensed brands include Speedo, Geoffrey Beene, Kenneth Cole New York, Kenneth Cole Reaction, Sean John, MICHAEL Michael Kors, Michael Kors Collection, Chaps, Donald J. Trump Signature Collection, DKNY, Elie Tahari, Nautica, Ted Baker, J. Garcia, Claiborne, Robert Graham, U.S. POLO ASSN., Ike Behar, Axcess, Jones New York and John Varvatos.

PVH Corp. manages its business through operating divisions, which consist of three reportable segments: Calvin Klein, Tommy Hilfiger and Heritage Brands. Approximately, 45% of the company's fiscal 2013 revenues came from overseas operations. Moreover, its global designer lifestyle brands, Calvin Klein and Tommy Hilfiger together accounted for nearly 3/4th of its total revenue in fiscal 2013.

Calvin Klein (36% of 3Q14 total revenue): Acquired in December 2002, Calvin Klein has now become one of the world's most popular designer brands. The Calvin Klein brands include the Calvin Klein Collection, Calvin Klein platinum label, Calvin Klein white label, Calvin Klein Jeans and Calvin Klein Underwear. It is the company's topmost premium brand which is marketed at a higher price and at higher-end distribution channels in the domestic and international markets.

Tommy Hilfiger (42% of 3Q14 total revenue): Acquired in Mar 2010, the brand's classic American design appeals to a wide array of global consumers. Operating over 1,400 Tommy Hilfiger stores worldwide, the company distributes this brand in over 90 countries. PVH Corp. sells the Tommy Hilfiger product line under two brand portfolios: Tommy Hilfiger, which targets consumers aged 25 to 45 years and Hilfiger Denim, which targets denim-oriented consumers aged 25 to 30 years.

Heritage Brands (22% of 3Q14 total revenue): The company's Heritage Brands segment specializes in the designing, sourcing and marketing of a wide array of brand-label shirts, sportswear, neckwear, intimate apparel, swimwear and footwear. PVH Corp. also provides license to sell products from its owned brands except for Calvin Klein and Tommy Hilfiger.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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