Top 12 Luxury Clothing Stocks to Buy According to Hedge Funds

8. PVH Corp. (NYSE:PVH)

Number of Hedge Fund Holders: 27

PVH Corp (NYSE:PVH) is a luxury fashion company that operates Tommy Hilfiger and Calvin Klein brands. The company delivered on its revenue guidance in fiscal Q3 2024 primarily due to a disciplined execution of its brand-building growth plan, which it calls the PVH+ plan.

Although revenue for fiscal Q3 2024 was down by 5% compared to last year, the company exceeded its guidance primarily due to the timing of wholesale shipments in Europe and an acceleration of expense efficiencies. It delivered an operating margin of 10.5%, surpassing analyst estimates. This was because higher gross margins and strong expense management offset the leverage loss that occurred due to a decrease in the company’s revenue.

Analysts believe that the company has the potential to boost its brand over the long term by enhancing its marketing efforts and improving its designs. Its new management team is also anticipated to prove favorable for the company. Analysts estimate PVH Corp (NYSE:PVH) to raise its earnings per share (EPS) to $11.71 in 2025 from $10.68 in 2024. Overall, PVH Corp (NYSE:PVH) is positioning its brands for long-term, increasingly profitable sales growth. It takes the eighth spot on our list of the top luxury clothing stocks to buy according to hedge funds.

FPA Queens Road Small Cap Value Fund stated the following regarding PVH Corp. (NYSE:PVH) in its first quarter 2024 investor letter:

“PVH Corp. (NYSE:PVH) is an apparel company that owns the Tommy Hilfiger and Calvin Klein brands globally. Most of PVH’s earnings come from Europe, where the Tommy and Calvin brands are considered “almost luxury” and PVH has generally recorded high single-digit organic growth with demonstrated pricing power during the preceding decade. CEO Stefan Larsson has done an excellent job revitalizing the company and improving margins at PVH’s moribund US operations. Over the past year, PVH and our other apparel companies have performed well as the worst fears for consumer spending didn’t play out. PVH has become a top five holding for us and our apparel holdings (PVH, GIII, LEVI and DECK) now make up almost 10% of the portfolio. On April 2, post quarter end, PVH announced fiscal 23Q4 results where they missed on earnings guidance for the coming year. The stock is down ~20% from its high but now trades at less than ten times forward earnings. We have held our position.”