Shares of PVH Corp. (PVH) reached a new 52-week high of $138.94 on Jan 3, 2014. This branded apparel designer and retailer eventually closed at $137.62 on the last trading day, amassing a return of roughly 21.2% over the past 1 year. Average volume of shares traded over the last 3 months stands at approximately 777.2K.
An impressive record of beating the quarterly earnings expectations, sustained focus on brand building, asset management, global expansion and effective implementation of business strategies are the catalysts behind stock’s momentum.
PVH Corp.’s focus on brand building is evident from its emphasis on developing higher-margin businesses, led by the Calvin Klein and Tommy Hilfiger brands, rather than lower-margin products to drive long-term growth and enhance shareholder value.
To achieve this, the company recently divested all the assets of its G.H. Bass & Co. division to a subsidiary of G-III Apparel Group Ltd. (GIII). The deal fetched PVH Corp. nearly $50 million of cash.
This Zacks Rank #3 (Hold) company also formed a joint venture (:JV) with Gazal Corporation Limited in Oct 2013 to expand the footprint of its Calvin Klein brand across Australia, New Zealand and the South Pacific nations and islands.
Backed by its strong brand portfolio and its recent acquisition of Warnaco, PVH Corp. expects its non-GAAP earnings per share to increase over 15% in 2014 and onwards. The company, with its associates, brands and financial strength is well positioned to achieve accelerated growth and generate positive returns for its shareholders.
With the aforementioned strategies, we believe PVH Corp. is moving in the right direction, which will help it exploit opportunities in the lifestyle apparel market.
This N.Y.-based retailer currently trades at a forward P/E of 19.5x, a 6.0% premium to the peer group average of 18.4x. The last traded price is 3.5% below the Zacks Consensus average analyst price target of $142.55. Moreover, the company has long-term projected earnings per share (EPS) growth rate of 14.0%, higher than the peer group average of 12.9%.
Apart from PVH Corp., retail stocks such as The Walt Disney Company (DIS) and Hertz Global Holdings, Inc. (HTZ) achieved new 52-week highs of $76.70 and $29.81, respectively, on Jan 3, 2014.