PVH stock drops 22% after guidance cut triggers analyst downgrades

Shares of PVH Corp. came under heavy pressure after the apparel company lowered its full-year revenue outlook, with analysts warning that the latest update could lead to additional estimate cuts despite better-than-expected quarterly earnings.

The owner of the Tommy Hilfiger and Calvin Klein brands saw its stock fall more than 22%, putting the shares on track for their steepest one-day decline in more than two years.

The selloff followed the company's decision to reduce its fiscal 2026 revenue outlook, citing the ongoing effects of the conflict in the Middle East on consumer demand across Europe, the Middle East and Africa (EMEA).

PVH now expects revenue for the fiscal year to be roughly flat, compared with its previous expectation for slight growth.

Analysts surveyed by FactSet had been forecasting growth of approximately 0.8%.

Chief Executive Officer Stefan Larsson said the company was "balancing two opposing forces: on one side, the increasing brand and business momentum we are driving in both Calvin and TOMMY, and on the other, the prolonged effects of the Middle East conflict."

Guidance cut overshadows earnings beat

The weaker outlook largely eclipsed what was otherwise a stronger-than-expected first quarter.

PVH reported adjusted earnings per share of $2.01, ahead of analyst expectations of $1.82. Revenue rose 2% to $2 billion, topping estimates of roughly $2 billion.

For the second quarter, however, the company forecast revenue would decline between 4% and 5%, compared with Wall Street expectations for a 1% decline.

PVH maintained its full-year adjusted earnings guidance of $11.80 to $12.10 per share. The outlook includes an estimated benefit of approximately $1.50 per share from tariff refunds.

According to the company, the prolonged Middle East conflict has offset roughly $100 million in gains from those tariff refunds by weighing on consumers in the EMEA region.

The region is particularly important for PVH, accounting for about 47% of first-quarter sales, a significantly larger contribution than for several of its apparel industry peers.

Analysts turn more cautious

Following the earnings release, Evercore ISI downgraded PVH to In Line from Outperform and lowered its price target to $79 from $95.

According to TheFly, analyst Michael Binetti described the company's first-quarter report as a "low quality update" and said it exposed PVH to the risk of further negative estimate revisions during the second half of the year.

Evercore also noted that PVH is the only company in its coverage universe to include a one-time benefit from tariff refunds in its fiscal 2026 guidance.

The firm argued that without that benefit, the company would struggle to maintain its current margin and earnings outlook.

Needham also reduced its price target on the stock, lowering it to $102 from $107 while maintaining a Buy rating.

The brokerage said first-quarter earnings exceeded the company's own guidance primarily because of interest and tax benefits and lowered its fiscal 2027 earnings estimate to $12.80 per share from $13.40.

Long-term optimism remains

Despite the more cautious near-term outlook, not all analysts have turned negative on the stock.

UBS reiterated its Buy rating and maintained a $130 price target, citing confidence in PVH's brand portfolio, strategic direction and financial position.

The differing analyst views reflect the debate surrounding the company.

While the latest guidance cut has raised concerns about the impact of geopolitical uncertainty on consumer spending, some investors continue to see value in the long-term strength of the Tommy Hilfiger and Calvin Klein franchises.

For now, however, the market appears focused on slowing sales growth and the possibility that earnings expectations could face additional pressure in the months ahead.

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