PVH Corp. ($PVH) Stock: Sinks 18% Despite Beating Q1 Estimates

TLDR

Q1 EPS of $2.30 beat forecast of $2.23; revenue hit $1.98B vs. $1.93B expected Shares plunged over 18% despite strong results, now trading around $66.04 Direct-to-consumer revenue declined 3%, dampening sentiment New Calvin Klein leadership and cost-saving steps underway Full-year EPS forecast ranges from $10.75 to $11.00

PVH Corp. (NYSE: PVH) stock was down 18.34% midday Thursday, trading at $66.04, despite posting solid Q1 2025 earnings.

PVH Corp. (PVH)

The apparel company reported earnings per share of $2.30, surpassing the $2.23 estimate. Revenue totaled $1.98 billion, topping the $1.93 billion forecast. However, the stock faced a steep sell-off, triggered by market unease over weak direct-to-consumer (DTC) performance and macroeconomic uncertainty.

Financial Highlights and Market Reaction

Gross margin dropped to 58.6%, down 280 basis points from the prior year. DTC revenue declined by 3%, while wholesale revenue climbed 7% in constant currency. Despite the revenue and EPS beats, PVH’s sharp 18.95% drop in after-hours trading reflected investor caution amid weak consumer sentiment and increased promotional activity.

PVH Corp., $PVH, Q1-25. Results:
🔴 -7% Post-Market

📊 Adj. EPS: $2.30 🟢
💰 Revenue: $1.98B 🟢
🔎 Revenue topped guidance thanks to strong performance from Tommy Hilfiger and a viral Calvin Klein campaign, despite macro headwinds and a $480M impairment hit. pic.twitter.com/HpZ24fI8Px

— EarningsTime (@Earnings_Time) June 4, 2025

 

PVH trades at a low P/E ratio of 6.13x, and InvestingPro’s analysis indicates undervaluation. Yet with a beta of 1.89 and a 25% slide over the past six months, volatility and concern about demand trends persist.

Strategic Moves and Leadership Changes

The company announced new leadership at Calvin Klein and highlighted progress on its PVH+ transformation plan. CEO Stephan Larson acknowledged ongoing macro headwinds, while CFO Zach Coughlin reaffirmed confidence in regaining double-digit margins by late 2025. Cost-saving initiatives and share repurchases, resulting in over $550 million returned to shareholders, underscore PVH’s commitment to enhancing shareholder value.

Outlook and Analyst Sentiment

PVH provided cautious full-year guidance, forecasting EPS between $10.75 and $11.00. Revenue is expected to remain flat or slightly increase, with gross margin anticipated to decline by around 250 basis points. The company sees stronger performance materializing by Spring 2026.

Despite the stock’s recent weakness, analysts remain relatively optimistic. The average one-year target price stands at $98.23, implying a 48.86% upside from the current level. GuruFocus estimates PVH’s fair value at $97.10.

Risks and Ongoing Challenges

PVH faces multiple headwinds, including tariff issues, slowing Chinese demand, promotional pressure, and execution risks tied to leadership changes. Delays in Calvin Klein product development and increased freight costs are also expected to weigh on near-term margins.

Despite delivering better-than-expected Q1 results, investor reaction shows skepticism amid broader retail headwinds and uncertain macro conditions. PVH will need to show tangible operational improvements to regain market confidence.

Long-Term Performance and Valuation Outlook

Over the past year, PVH stock has fallen 46.54%, underperforming the S&P 500’s 11.81% gain. The year-to-date return is down 37.49%. Over five years, PVH has delivered only a 5.96% return compared to the S&P 500’s 87.42%.

However, with a favorable average analyst rating of 2.3 (“Outperform”) and price targets suggesting nearly 50% upside, investors may see long-term value if the company successfully navigates macroeconomic headwinds and executes its PVH+ strategy.

 

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