PVH Corp. PVH is currently trading at a notably low price-to-earnings (P/E) multiple, which is below the Zacks Textile - Apparel industry and broader Consumer Discretionary averages. PVH's forward 12-month P/E ratio is 8.09, lower than the industry average of 13.59x and the sector average of 18.62x. A lower P/E ratio often signals that a stock may be priced attractively relative to its earnings potential, which can be appealing to value-focused investors.
The stock is undervalued compared with its industry peers, offering compelling value to investors looking for exposure to the retail apparel sector. Furthermore, PVH's Value Score of A underscores its appeal as a potential investment.
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PVH has gained 33.9% compared with the industry’s growth of 2.3% in the past year. This success reflects the company's strategic focus on brand management, effective marketing, financial control and operating leverage. These initiatives have enabled PVH to outpace the Consumer Discretionary sector, which rose by 14.4%, and the S&P 500, which increased by 32.2% in the same period.
PVH’s emphasis on operational efficiency and brand development positions it favorably, not just for short-term gains but as a strong player in the apparel industry with the potential for sustained long-term growth.
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PVH Capitalizes on Brand Strength & Strategic Expansion
PVH Corp.’s robust brand portfolio, particularly with Calvin Klein and TOMMY HILFIGER, enables it to maintain competitive strength and drive growth despite the challenging retail environment. The company’s brand-focused strategy, alongside a diversified distribution approach, underscores its long-term growth potential.
PVH Corp. has been making constant efforts to expand its international business. The company has also been experiencing robust growth in the Asia-Pacific region. Additionally, it has been strategically reducing sales in Europe to improve overall sales quality in the region. The company is on track to position its Europe business for brand-accretive profitable growth in the long term. The company’s PVH+ Plan is an ambitious multi-year strategy focused on sustainable growth, leveraging its key brands to drive consumer connection through five pillars: product innovation, consumer engagement, a digitally-led market approach, data-driven operations and enhanced efficiency.
Each pillar is designed to reinforce PVH's core strengths, adapt to evolving consumer preferences, and position PVH to thrive in a more digital, data-centered marketplace. The PVH+ Plan’s strategic emphasis on efficiency and targeted investments is aligned with operational stability and growth initiatives, solidifying PVH’s path to long-term value creation in the global retail landscape.
What Could Derail PVH Stock’s Momentum?
Despite the positive factors, PVH has been grappling with a tough operating landscape, including inflationary pressures and foreign currency translations. Its Wholesale unit also remains weak due to lower sales of the Heritage Brands women's intimates business and ongoing efforts to reduce wholesale revenues in Europe.
For the third quarter of fiscal 2024, revenues are projected to decline 6-7% (down 7-8% in constant currency) from the year-ago quarter, including a 2% reduction related to the Heritage intimates business sale.
For fiscal 2024, the company anticipates a year-over-year revenue decline of 6-7%, which is consistent on a constant currency basis. This includes a 2% reduction due to the divestiture of the Heritage Brands women’s intimate business and a 1% impact from the 53rd week in fiscal 2023.
How to Play PVH Stock
Investors may find PVH Corp. attractive due to its compelling valuation and strong growth prospects. PVH is well-positioned to benefit from its targeted PVH+ Plan. This targeted strategy is expected to support the company in navigating current market pressures, including inflation and currency headwinds, while bolstering long-term growth, making it an appealing option for investors interested in the Consumer Discretionary sector. PVH’s current Zacks Rank #3 (Hold) reinforces its appeal as a solid investment opportunity.
Three Picks You Can’t Miss
A few better-ranked stocks are Under Armour, Inc. UAA, Kontoor Brands Inc. KTB and Skechers U.S.A., Inc. SKX.
Under Armour is one of the leading designers, marketers and distributors of authentic athletic footwear, apparel and accessories. It has a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Under Armour’s fiscal 2025 sales indicates a decline of 10.6% from the year-ago period’s reported figure. UAA has a trailing four-quarter average earnings surprise of 64.2%.
Kontoor Brands is an apparel company. It currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for KTB’s 2024 earnings and sales indicates growth of 13.2% from the 2023 reported figures. KTB has a trailing four-quarter average earnings surprise of 12.8%.
Skechers designs, develops, markets and distributes footwear. The company has a Zacks Rank of 2 at present.
The consensus estimate for Skechers’ 2024 earnings and sales indicates growth of 20.6% and 12.1%, respectively, from the 2023 reported figures. SKX has a trailing four-quarter average earnings surprise of 8.8%.
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