) reached a new 52-week high of $119.62 on Tuesday, Jan 15, 2013,
beating its previous 52-week high of $119.37. The closing share
prices of the world's largest shirt and neckwear company, on Jan
15, 2013, was $119.45, representing a solid return of
approximately 68.0% since Jan 3, 2012. Average volume of shares
traded over the last 3 months stands at approximately
An impressive record of beating the quarterly earnings
expectations, a positive fiscal 2012 outlook, and expanding
business through acquisition, are the major growth drivers for
the shares of PVH Corp.
On Nov 27, 2012, PVH reported an outstanding bottom-line
performance in the third quarter of fiscal 2012. Driven by solid
improvement in margins along with a lower tax rate, the company's
adjusted earnings per share jumped approximately 24% year over
year to $2.34, beating the Zacks Consensus Estimate of $2.29.
However, the company's total revenue inched down 1% to $1.643
billion compared with $1.654 billion in the year-ago quarter. The
year-over-year revenue growth at the company's Tommy Hilfiger and
Calvin Klein segments were more than offset by the decline at its
Heritage Brands segment and unfavorable foreign currency exchange
rates. However, quarterly revenue surpassed the Zacks Consensus
Estimate of $1.638 billion.
Bolstered by continued growth momentum at Tommy Hilfiger and
Calvin Klein brands, the company raised its fiscal 2012 earnings
guidance range to $6.37-$6.38 per share, up from previous
guidance range of $6.32-$6.37. The current Zacks Consensus
Estimate for the fiscal is pegged at $6.39 per share which is
above the company's guidance range. Moreover, PVH Corp. expects
net sales to increase 2% from fiscal 2011 level.
Further, we believe that the acquisition of
The Warnaco Group, Inc.
) will facilitate the company to have operations at every major
consumer market in the world, which will ultimately boost its top
line. It is expected that the acquisition will increase the
company's 2013 earnings by 35 cents per share.
Valuation Stretched, Yet Lucrative
PVH Corp. currently trades at a forward P/E of 18.70x,
reflecting a 18.0% premium to the peer group average of 15.85x.
Its price-to-sales ratio of 1.42 is also at a premium to the peer
group average of 1.34. Given the company's compelling
fundamentals, the premium valuation is justified and well
supported by its long-term estimated EPS growth rate of 14.5%
versus 12.6% for the peer group.
About The Company
PVH Corp., formerly known as Phillips-Van Heusen Corporation,
is headquartered in New York. PVH Corp. designs and markets
branded dress shirts, neckwear, sportswear, footwear and other
related products. The company markets its products at a wholesale
level through department store chains and directly to consumers
through retail stores. The company's portfolio of brands includes
its owned brands and its licensed brands. The company has a
market cap of approximately $8.44 billion.
PVH Corp., which competes with
Ralph Lauren Corporation
), currently, has a Zacks Rank #2 (Buy) rating. However, given
the sluggish domestic economic growth coupled with the crisis in
Europe and slowdown in China, we remain slightly cautious on the
stock and uphold our long-term 'Neutral' recommendation.
PVH CORP (PVH): Free Stock Analysis Report
RALPH LAUREN CP (RL): Free Stock Analysis
WARNACO GRP INC (WRC): Free Stock Analysis
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