Investing.com -- PVH Corp posted fourth-quarter results Monday that topped Wall Street estimates on top and bottom lines, driven by strong margin growth.
However, the apparel maker's full-year guidance fell short of estimates amid a tough consumer backdrop for retailers, sending its shares tumbling.
PVH Corp (NYSE:PVH) plunged 23.5% in premarket trading Tuesday.
For the quarter ended Feb. 4, the company reported adjusted Q4 earnings of $3.72 a share on revenue of $2.49 billion, beating estimates of $3.52 on revenue of $2.42B.
The beat comes as gross margins were boosted amid ongoing progress on its PVH+ plan that seeks to boost the growth of its Calvin Klein and Tommy Hilfiger brands.
Gross margin rose to 60.3% from 55.9% in the prior year period.
Looking ahead to 2024, EPS was guided to a range of $10.75 to $11.00, with revenue projected to decrease 6% to 7% as compared to 2023, compared with analyst estimates for EPS of $12.08.
In their comments on the strong post-earnings market reaction, JPMorgan (NYSE:JPM) analysts said,”Focus was on the guide, and while I think investors were braced for a potential flat- to-down rev scenario, the down 6-7% guide is below any expectations I heard, and mgmt is specifically calling out EU macro becoming more challenged.”
Meanwhile, Barclays (LON:BARC) analysts said the disappointing guidance “implies a slowdown in the core brands as the company pursues higher quality sales and margin.”
Although the move could be painful for PVH in the near term, the investment bank believes “it is the right decision long term and will ultimately lead to a more profitable business to grow.”
(Yasin Ebrahim contributed reporting)