Business Strategy and Outlook| David Swartz |
Once known as a producer of midtier men's shirts, PVH purchased fashion brand Calvin Klein in 2003. It acquired a second large fashion brand in Tommy Hilfiger (2010) and Calvin Klein licensee Warnaco (2013). We believe that neither of PVH’s major brands has the pricing power or competitiveness to provide it with a moat. Moreover, the firm is dealing with the war in Ukraine, shipping delays, inflation, depreciation of the euro versus the U.S. dollar, and higher taxes. We estimate its adjusted EPS will drop about 18% this year.