) - world's largest shirt and neckwear company - reached a new
52-week high of $121.26 on Friday, Jan 25, beating its previous
52-week high of $119.62. The closing share price of the company
on Jan 28, 2013 stood at $120.86, representing a solid return of
approximately 69.9% since Jan 3, 2012. Average volume of shares
traded over the last 3 months came in at approximately
An impressive record of beating the quarterly earnings
expectations, a positive fiscal 2012 outlook and expanding
business through acquisition mainly drove the upside in the
shares of PVH Corp.
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% on a
year-over-year basis to $1.643 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 the 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 18.92x,
reflecting a 38.8% premium to the peer group average of 13.63x.
Its price-to-sales ratio of 1.48 is also at a premium to the peer
group average of 1.37. 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 12.8% for the peer group. The company has a market cap of
approximately $8.54 billion.
Other Stocks to Consider
Apart from PVH Corp., other stocks' share prices in the
industry that are gaining momentum include
Ralph Lauren Corporation
). Hanesbrands and Ralph Lauren's share prices rose approximately
15.4% and 6.1%, respectively, since both the company's reported
better-than-expected bottom-line performance. All of these
companies carry a Zacks Rank #2 (Buy).
HANESBRANDS INC (HBI): 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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