PVH (PVH), Lululemon (LULU) and other specialty retail and department stores highlight limited visibility into near-term performance amid ongoing economic pressures and tariff uncertainty, BofA Securities said in a note Saturday.
The analysts said Lululemon's shares fell 13% after the company announced Heidi O'Neill, a longtime Nike (NKE) executive, as its new chief executive starting Sept. 8. While she brings strong experience from a major global brand, the delayed start date means any major product changes may not show up until late 2027 or even 2028.
"The multiple is near all-time lows and is balanced by our lack of visibility into the earnings power under new leadership; we remain Neutral," BofA said.
PVH stock rose sharply in April, gaining 37%, well ahead of the broader market. The company's 2026 outlook includes better gross margins than expected, though it still faces challenges in Europe and relies on buybacks for earnings per share growth. Its Calvin Klein brand is getting a visibility boost from a popular television series, but concerns remain due to PVH's 50% Europe exposure given the macro challenges in the region, the analysts said.
The analysts added that tariffs have stayed low at around 10% since late February, after higher rates were paused. The lower tariffs could slightly improve profit margins, but the benefit will be delayed because goods imported in March won't be sold until Q2. There is little impact expected on Q1 results.
BofA has a neutral rating on Lululemon and a $175 price target. PVH also has a neutral rating and its price target was adjusted to $103 from $87.
Price: $91.88, Change: $-1.77, Percent Change: -1.88%