In an attempt to fuel its men's business, PVH Corp.PVH made a few announcements yesterday.
PVH Corp. revealed that it has inked a deal to buy the licensed Tommy Hilfiger men's tailored clothing business from Marcraft Clothes, Inc., for North America. Marcraft operates Tommy Hilfiger's men's business under a license from the latter. Per the deal, scheduled to close on Dec 31, 2017, PVH Corp. will purchase various assets associated with the licensed business.
Further, PVH Corp.'s subsidiary - Tommy Hilfiger Licensing LLC - entered a licensing deal with Peerless Clothing International, Inc. The company's aim behind this agreement is to consolidate all brands under Tommy Hilfiger's men's tailored business in North America, under a single partner, which is expected to take effect from Jan 2018. However, any further deal terms remained under wraps.
While management at PVH Corp. remains pleased with Marcraft's solid efforts to establish Tommy Hilfiger's men's business in North America, the company believes that bringing all its men's tailored brands under a single partner will augment its growth.
Hence, PVH Corp. looks forward to integrating all its Tommy Hilfiger men's brands under Peerless's direction. The company already has strong ties with Peerless, which has been the licensee of PVH Corp.'s Calvin Klein, Van Heusen, and IZOD brands for many years. Thus, management remains confident of Peerless' stewardship and ability to boost growth at Tommy Hilfiger men's tailored clothing business in North America.
PVH Corp.'s strength lies in its premium Tommy Hilfiger and Calvin Klein brands, among others. The company's solid brand portfolio enables it to stay ahead of its peers, which helps the company generate above-average industry growth and sustain its position despite the ongoing challenges. The company's approach to brand management also allows each of its brands to develop through efficient marketing strategies, financial control and operating leverage.
Driven by these factors and the company's robust growth strategies, PVH Corp.'s shares have outperformed the Zacks categorized Textile-Apparel Manufacturing industry over the past one year. Evidently, PVH Corp. has surged 38.1% over the past one year, compared with the industry's decline of 5.9%.
All said, we believe that by entering into various licensing agreements such as the aforementioned ones, the company is on track with developing its brands and remains well-positioned for long-term profitability.
PVH Corp. currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include Tailored Brands, Inc. TLRD , carrying a Zacks Rank #1 (Strong Buy), Michael Kors Holdings Limited KORS and Lululemon Athletica Inc. LULU , each with a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Tailored Brands has an average positive earnings surprise of 8.4% in the trailing four quarters. The stock, with a long-term earnings per share (EPS) growth rate of 17.5%, has seen positive estimate revisions in the last 60 days.
Michael Kors, with a long-term EPS growth rate of 9.6%, has seen positive estimate revisions for the current quarter over the past 30 days. Also, it has a solid earnings surprise history.
Lululemon's long-term EPS growth rate of 15.9% and solid positive estimate revisions for the current fiscal over the past 60 days help it stand strong in the industry. Moreover, the company has an average positive earnings surprise of 3.9% in the trailing four quarters.
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