PVH Corp. (PVH) , the home to brands including Tommy Hilfiger, Van Heusen and Calvin Klein, is seeing the starch taken out of its shares after disappointing investors with its 2019 outlook.
The apparel maker's shares were down around 9% before Thursday's opening bell, extending a drop of 24% over the past month. If pre-market losses hold, PVH will be set for its lowest open since the late-December selloff that dropped many stocks to recent lows.
PVH's earnings results for the quarter ended May 5 came in largely in line with analyst expectations. However, PVH noted the road ahead will be far more challenging.
Management indicated that full-year non-GAAP earnings are now expected to fall in the range of $10.20 to $10.30 per share, down 10 cents from its prior forecast, and it expects a foreign currency impact of around 32 cents per share as it translates overseas sales into U.S. dollars.
"In contrast to 4Q's solid beat with guidance introduced well above the buy-side bar, we believe today's narrow beat and lowered plan will increase negative sentiment in an already tough retail tape," Deutsche Bank analyst Tiffany Kanaga commented.
The sagging sentiment is compounded by a more challenging macroeconomic backdrop and questions about the strength of retail sales in the U.S., something that management noted in prepared statements.
"Looking ahead, the volatile and challenging macroeconomic backdrop has continued into the second quarter, with particular softness across the U.S. and China retail landscape," said CEO Emanuel Chirico. "Additionally, further volatility in foreign exchange rates is expected to pressure our full year earnings per share by an incremental $0.10 compared to our prior expectations."
Chirico cited these factors as the main drivers of the company's decision to temper its guidance for the next quarter.
Following the cautionary commentary from Chirico, a majority of analysts polled by FactSet cut price targets for PVH as the probability of share growth in the current environment is muted.
While many maintained "Buy" ratings based on their long-term view of a brand that might be better insulated than some of its peers from external impacts, the bullishness on Wall Street has subsided to a notable degree.
"Softening YTD retail spending (PVH Q1 same store sales decelerated across all brands), increasing FX/tourism pressure (similar to Tapestry (TPR) , Ralph Lauren (RL) , Capri Holdings (CPRI) ), and looming tariff risk are all overhangs for PVH/the group from our perspective," Piper Jaffray analyst Erinn Murphy said.
As a result, she took her very bullish $146 per share price target down to a more modest $121.
It will be incumbent upon management to differentiate PVH from its lagging peer group on the coming conference call and to stop the bleeding of a stock that is down more than 20% from its last quarterly report.