) - world's largest shirt and neckwear company - hit a new
52-week high of $122.68 on Wednesday, Feb 6, before closing at
$121.38. This Zacks Rank #3 (Hold) beats its previous 52-week
high of $121.26, and has generated a whopping return of
approximately 55.6% since Feb 3, 2012. Average volume of shares
traded over the last 3 months came in at approximately 910K.
Drivers that Triggered Momentum
An impressive positive earnings surprise history, upbeat
fiscal 2012 guidance, and accretive acquisition facilitated the
shares of PVH Corp. to gather momentum and achieve a new
PVH reported an outstanding bottom-line performance in the
third quarter of fiscal 2012, on the back of 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 by 2.2%. Total
revenue of $1.643 billion also came ahead of the Zacks Consensus
Estimate of $1.638 billion.
The continued growth momentum across the company's brands,
Tommy Hilfiger and Calvin Klein, prompted management to raise
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 penny above the company's upper-end of the 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.
Stock's Key Indicators
PVH Corp. currently trades at a forward P/E of 16.37x,
reflecting an 18.2% premium to the peer group average of 13.85x.
Its price-to-sales ratio of 1.49 is also at a premium to the peer
group average of 1.38. 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%
compared with 12.8% for the peer group.
Other Stocks to Consider
Apart from PVH Corp., other stocks in the apparel industry
that are portraying strong upward trend in the bourses are
Michael Kors Holdings Limited
Ralph Lauren Corporation
). Michael Kors' and Ralph Lauren's share prices rose
approximately 9.5% and 5.6%, respectively, since both the
company's reported better-than-expected bottom-line performance.
Michael Kors has a Zacks Rank #1 (Strong Buy), while Ralph Lauren
holds a Zacks Rank #2 (Buy).
MICHAEL KORS (KORS): Free Stock Analysis
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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