PVH Expected To Report Revenue Degrowth in Q4, China Situation In Focus: Retail Investors In Wait-And-Watch Mode

China has added PVH to its “Unreliable Entity” list due to its alleged discriminatory measures against Chinese businesses. The title may attract fines and restrictions.

PVH Corp (PVH) is expected to report another quarter with negative revenue growth on Tuesday, underscoring the continued weakness in demand for premium apparel and accessories.

PVH, the parent of apparel and accessory brands Tommy Hilfiger, Calvin Klein, and Heritage Brands, is scheduled to report fourth-quarter results before the markets open.

Adjusted sales during the period are expected to drop 6.3% to $2.33 billion, according to analyst estimates from Koyfin. Growth was negative in all of the preceeding three quarters.

Adjusted earnings per share (EPS) is seen at $3.21 compared to $3.72 a year ago.

Shares of the company closed nearly 3% lower on Friday and fell further in after-hours trading.

Besides its view on wider demand trends, PVH’s comments on its situation in China will be closely monitored, according to analysts.

Last month, China added PVH to its “Unreliable Entity” list due to its alleged discriminatory measures against Chinese businesses, particularly concerning a boycott of Xinjiang-sourced cotton.

This designation may lead to fines, trade restrictions, and investment limitations, jeopardizing PVH’s access to Chinese manufacturing and consumers.

China represented 6% of PVH’s sales and 16% of its earnings before interest and taxes (EBIT) in 2023, although the risk to its manufacturing base is the bigger concern.

Last week, at least two analysts, Citi and Telsey Advisory, lowered their price targets on the company, citing a lack of visibility in the Chinese market.

On Stocktwits, the retail sentiment improved to 'neutral' from 'bearish a week back, while message volume was 'high'.

One user said that core brands Tommy and Calvin look resilient despite macro challenges, and they would buy the stock on the dip if the China issue clears.

PVH shares are down 39% year to date.

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