Benzinga | Aug 31, 2021 04:17PM EDT

PVH Sees Q3 Adj. EPS $1.95 to $2.00 vs $1.77 Est., Sees FY21 Adj. EPS ~$8.50

Full Year Guidance

Revenue in 2021 is projected to increase 26% to 28% (increase 24% to 26% on a constant currency basis) as compared to 2020.

The Company currently projects that 2021 earnings per share on a GAAP basis will be approximately $8.80 compared to a loss per share of $(15.96) in 2020. These results include the amounts for the applicable period described under the heading "Non-GAAP Exclusions" later in this release. Earnings per share and loss per share on a non-GAAP basis for these periods, respectively, as discussed below, exclude these amounts.

The Company currently projects that 2021 earnings per share on a non-GAAP basis will be approximately $8.50 compared to a loss per share of $(1.97) in 2020.

Net interest expense in 2021 on a GAAP basis is projected to decrease to approximately $105 million compared to $121 million in 2020. Included in net interest expense for the prior year was a $5 million expense resulting from the remeasurement of a mandatorily redeemable non-controlling interest that was recognized in connection with the Australia acquisition. Net interest expense on a non-GAAP basis for the prior year excludes this amount. Net interest expense in 2021 on a GAAP basis (there are no non-GAAP exclusions in 2021) is projected to decrease to approximately $105 million compared to $116 million on a non-GAAP basis in 2020. The Company estimates that the 2021 effective tax rate will be in a range of 17% to 18%.

The Company's estimate of 2021 earnings per share on a non-GAAP basis excludes (i) a pre-tax net gain of approximately $110 million expected to be recorded in connection with the Heritage Brands transaction, (ii) approximately $60 million of pre-tax costs expected to be incurred in connection with actions to streamline its organization through reductions in its workforce, primarily in certain international markets, and to reduce its real estate footprint, including reductions in office space and select store closures, and (iii) $21 million of pre-tax costs incurred in connection with exiting the Heritage Brands Retail business, and the resulting estimated tax effects of these pre-tax items.

Third Quarter Guidance

Revenue in the third quarter of 2021 is projected to increase 11% to 13% compared to the prior year period.

The Company currently projects that third quarter 2021 earnings per share on a GAAP basis will be in a range of $3.00 to $3.05 compared to $0.98 in the prior year period. These results include the amounts for the applicable period described under the heading "Non-GAAP Exclusions" later in this release, including the pre-tax net gain of approximately $110 million expected to be recorded in the third quarter of 2021 in connection with the Heritage Brands transaction. Earnings per share on a non-GAAP basis for these periods, as discussed below, exclude these amounts.

The Company currently projects that third quarter 2021 earnings per share on a non-GAAP basis will be in a range of $1.95 to $2.00 compared to $1.32 in the prior year period.

Net interest expense in the third quarter of 2021 on a GAAP basis is projected to decrease to approximately $25 million compared to $34 million in the prior year period. Included in net interest expense for the prior year period was a $1 million expense resulting from the remeasurement of a mandatorily redeemable non-controlling interest that was recognized in connection with the Australia acquisition. Net interest expense on a non-GAAP basis for the prior year period excludes this amount. Net interest expense in the third quarter of 2021 on a GAAP basis (there are no non-GAAP exclusions in the third quarter of 2021) is projected to decrease to approximately $25 million compared to $32 million on a non-GAAP basis in the prior year period. The Company estimates that the third quarter 2021 effective tax rate will be in a range of 26% to 28%.

The Company's estimate of third quarter 2021 earnings per share on a non-GAAP basis excludes (i) a pre-tax net gain of approximately $110 million expected to be recorded in connection with the Heritage Brands transaction and (ii) approximately $8 million of pre-tax costs expected to be incurred in connection with the previously described actions to streamline its organization and reduce its real estate footprint.

Please see the section entitled "Full Year and Quarterly Reconciliations of GAAP to Non-GAAP Amounts" at the end of this release for further detail and reconciliations of GAAP to non-GAAP amounts discussed in this section.