Phillips-Van Heusen Corp. (PVH): Zacks Rank Buy

• By Alex Kolb
• On 1:00 am EDT, Thursday October 15, 2009

Phillips-Van Heusen Corp. (NYSE: PVH - News) is seeing bullish forecasts. Analysts polled by Zacks are calling for earnings of $2.46 per share. Last month, the Zacks Consensus Estimate stood at $2.43 and was pegged at $2.31 two months ago.

Company Description

Phillips-Van Heusen Corp is a global designer and marketer of branded dress shirts, sportswear footwear and other similar products, offering several well-known brands. Calvin Klein , Izod, Bass and DKNY are just a few of the company's brands.

The company grants licensing rights to its brands and holds key licenses to brands in the dress shirts, neckwear, and sportswear segments.

Bullish Forecasts and Strong Momentum

Phillips-Van Heusen is seeing bullish forecasts. Analysts polled by Zacks are calling for earnings of $2.46 per share. Last month, the Zacks Consensus Estimate stood at $2.43 and was pegged at $2.31 two months ago.

For the following year, the Zacks Consensus Estimate of $2.73 per share was increased from last week's $2.70 and last month's $2.56.

Shares, which are trading near a 52-week high, have outpaced the market by about 15% since reporting second-quarter results. PVH more than doubled the market over the past year.

A Solid Quarter

Phillips-Van Heusen posted second-quarter results in mid-August. Earnings per share of 60 cents came in slightly below last year's 66 cents but topped the Zack Consensus Estimate by 36%.

Revenue of $529.3 million came in above the company's guidance but slipped by 1% year-over-year.

PVH noted that its wholesale and retail divisions performed better than planned, particularly the wholesale and retail sportswear businesses.

Comparable store sales of the retail divisions dipped 3% for the second quarter, which is a significant improvement from the first quarter's drop of 8%.

Calvin Klein royalty revenue decreased 6% for the second quarter, which includes a $1.6 million negative impact from a stronger U.S. dollar. On a constant exchange rate basis, Calvin Klein royalty revenue fell 3%.

The company outpaced the market over the past year and surged past the S&P 500 by about 15% since announcing the second quarter.

Strong Fundamentals

Phillips-Van Heusen's return on equity (ROE) of 13% beats the industry' average of 10%. The company's net profit margin of 3% compares favorably to a negative industry average. The Growth and Income pick offers an industry-leading dividend yield of 0.34%.

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