Investment Review №353. In Search of New Landmarks

Trade Thesis

Buy PVH 75 Call as a recovery trade after the recent pullback. Q2 was better than feared: EPS was $3.70, margin beat guidance and the full-year outlook was maintained. Stabilization in Europe could support a move toward $82–88.

Key Arguments

• Q2 beat reduced expectations: earnings and profitability were stronger, while full-year guidance was maintained.
• Valuation near 6x adjusted earnings already discounts substantial weakness; even modest multiple normalization offers upside.
• Calvin Klein and Tommy Hilfiger retain recovery potential; better e-commerce and weaker-region trends could improve expectations.

Risk Management

Risks: persistent weakness in Europe, higher marketing costs, FX/trade pressure and time decay if the shares move sideways.

Trade parameters

P/L of the Option Strategy