PVH Corp (NYSE:PVH) entered into agreements with Li & Fung Limited for a new supply chain relationship, transforming the current non-exclusive buying agency agreement between them into a new strategic partnership.
As per the agreement, Li & Fung will provide additional value-added services to PVH. The transaction is expected to close on July 1, 2017.
Daniel Grieder, CEO Tommy Hilfiger Global and PVH Europe commented: “Our focus is to create a more effective and efficient supply chain that will enable us to adapt and evolve so we can stay ahead in our rapidly changing industry. This transformation in our sourcing strategy is an important step in our initiative to improve speed to market and for the faster integration of consumer insights into our new collections.”
PVH Corp. (NYSE:PVH) has jumped 7% in postmarket trading after posting Q4 earnings where it beat expectations thanks to international brand growth, and extended its buyback program.
EPS beat guidance, hitting $1.26 on a GAAP basis and $1.23 on non-GAAP. “We are very pleased with our fourth quarter results, which exceeded both our sales and earnings guidance despite the volatile macroeconomic environment and the highly promotional retail market in the U.S.," said CEO Emanuel Chirico.
The company also authorized a $750M increase in its stock repurchase program and stretched it to June 2020.
Revenue by segment: Calvin Klein NA, $409.4M (down 11%); Calvin Klein International, $385.5M (up 11.4%); Tommy Hilfiger NA, $419.1M (down 4.2%); Tommy Hilfiger International, $512.5M (up 9.9%); Heritage Brands Wholesale, $313.5M (down 6%); Heritage Brand Retail, $67.7M (down 1.7%).
For Q1, it's guiding to EPS of $0.73-$0.75 on a GAAP basis and $1.58-$1.60 on a non-GAAP basis (vs. consensus for $1.56). For the full year, it's forecasting $7.30-$7.40 non-GAAP vs. consensus for $7.26.
PVH (NYSE:PVH) acquires e-commerce retailer True&Co for an undisclosed amount.
The company says the acquisition will provides a platform to increase innovation, data driven-decisions and speed in the way it serves its consumers across its channels.
“We believe that we can leverage the analytics tools of this data-driven company, while leveraging PVH’s intimates category expertise, including global brand management, product know-how and supply chain," says CEO Emanuel Chirico.
A plan by Amazon (NASDAQ:AMZN) to sell its own line of bras and intimate apparel off its website will be closely watched by the retail sector to see if one of the last of the e-commerce holdout categories finally succumbs. The Wall Street Journal broke the news on Friday and tips that the Amazon line could be introduced within a few weeks.
Some industry insiders think Amazon will have a hard time selling to first-time customers who want to feel and touch their lingerie products, while others warn that the sub-$10 pricing from the Seattle company could rattle the bra market as Generation Z factors in.
Calvin Klein (NYSE:PVH), Victoria's Secret (NYSE:LB), Target (NYSE:TGT), Nordstrom (NYSE:JWN) and American Eagle Outfitters (NYSE:AEO) are a few of the companies that could be impacted by the new Amazon apparel push.
Evercore ISI takes a broad swipe at the apparel sector on concerns over "signficant" EPS exposure to wholesale channels.
Analyst Omar Saad thinks a turning point could be reached in the apparel industry when the first high-profile brand sets up a marketpalce website within Amazon (NASDAQ:AMZN).
"We believe that many years from now, when economic and market historians study the digital revolution in retrospect, one of the most profound structural changes for which this era will be remembered is the destruction of middlemen throughout the economy," KORS)+to+Hold/12483094.html" target="_blank">writes Saad.
"We wholeheartedly believe the innovation-driven brand stocks will win, and win big, in a digital landscape where content-producing companies with strong brands can connect more directly with consumers and rely less on superfluous third-party middleman.
Deckers Outdoor (NASDAQ:DECK), Fossil (NASDAQ:FOSL), Michael Kors (KORS), PVH (NYSE:PVH), Ralph Lauren (NYSE:RL) and VF Corp. (NYSE:VFC) are all reduced to a Hold rating from Buy. Coach (NYSE:COH) is the outlier, earning an upgrade to Buy due to its high mix of sales from the full-price format and recent innovation.
Shares of Coach are up 1.53% premarket to $37.92. FOSL -1.37%. PVH -1.00%. KORS -1.17%.
Bloomberg Intelligence analyst Caitlin Webber says Wal-Mart (WMT -2%), Target (TGT -1.5%), Best Buy (BBY -4%) and Costco (COST -1.7%) would face billions of dollars in extra import costs under a border adjustment tax as proposed by the GOP.
Senior Trump administration officials are said to be favoring the tax in some form, despite some up and down signals from POTUS.
Add to the list posted earlier of retail stocks trading lower Stein Mart (SMRT -4.7%), Zumiez (ZUMZ -4.4%), Pier 1 Imports (PIR -4.8%), The Children's Place (PLCE -3.7%), Five Below (FIVE -3.6%), RH (RH -5.2%), Chico's FAS (CHS -3.8%), DSW (DSW -2.5%), Cato (CATO -2.8%), Williams-Sonoma (WSM -3%), Carter's (CRI -3.5%), Iconix Brand Group (ICON -4.4%), G-III Apparel (GIII -3.8%), Perry Ellis (PERY -2.9%), PVH (PVH -2.6%) and Steven Madden (SHOO -2.7%).
Other stocks moving in what could be a reaction to President-elect Donald Trump's comments on the strong U.S. dollar and trader buzz over the GOP border tax being pulled back include PVH Corp. (PVH +4.3%), Caleres (CAL +5%), G-III Apparel Group (GIII +3.9%), Wolverine World Wide (WWW +2.1%), Deckers Outdoor (DECK +1.5%), Luxottica (LUX +8.4%), Ascena Retail Group (ASNA +3.3%), Francesca's (FRAN +2.8%), Michaels Companies (MIK +6.1%), Dollar Tree (DLTR +3.7%), Dollar General (DG +2.1%), Abercrombei & Fitch (ANF +3%), Sears Holding (SHLD +4.6%), Guess (GES +3.9%), Vera Bradley (VRA +4%) and Hanesbrands (HBI +2.5%).
The broad sector rally arrives after selling pressure for the first part of 2017.
A dark shadow has crossed over parts of the sector as more analysts weigh in on the negative impact of a border tax adjustment on goods sourced from outside the U.S. The GOP and President-elect Trump are expected to agree to support some form of border adjustments.
The border tax could be especially difficult for apparel and footweat companies to overcome.
Retail stocks that trade weak today amid the discussion include Deckers Outdoor (DECK -6.6%), Fossil (FOSL -5.7%), Coach(COH -3.1%), Iconix Brand Group (ICON -2.9%), Ralph Lauren (RL -2.5%), Wolverine World Wide (WWW -2.3%), Lululemon (LULU -1.7%), PVH (PVH -1.3%), Duluth Holdings (DLTH -6.1%), Boot Barn (BOOT -3.8%), Tilly's (TLYS -3.8%) and Skechers (SKX -1.2%).