Market Overview

Earnings Preview: Phillips-Van Heusen Revenue Expected to Double

Phillips-Van Heusen (NYSE: PVH) is set to report first-quarter fiscal 2011 results Tuesday, May 31, after the markets close. Analysts are looking for the shirt maker to report that earnings grew 28.4% from a year ago to $1.16 per share. That consensus earnings estimate is unchanged from 30 days ago. The revenue forecast for the quarter calls for $1.3 billion, which is more than double from the same period of last year.

The Company

Phillips-Van Heusen is headquartered in New York City and designs and markets dress shirts, sportswear, footwear and other apparel and accessories worldwide. Its brands include Calvin Klein, Van Heusen, Tommy Hilfiger, IZOD and ARROW. The company generates much of its revenue from wholesale clients Macy's (NYSE: M), Kohl's (NYSE: KSS), JCPenney (NYSE: JCP) and Walmart (NYSE: WMT) but also operates about 650 retail outlets.

In the three months that ended in April, the company licensed its IZOD brand in China, India and the Middle East. It also appointed a new head of Canadian retail operations. CEO Emanuel Chirico said in the year-end earnings press release: "We look forward to a strong 2011 that will be fueled by the international growth opportunities at Tommy Hilfiger and Calvin Klein."

Looking Ahead

Analysts so far expect to see year-over-year growth of both per-share earnings and revenues in the second quarter and for the full year. Note that Phillips-Van Heusen earnings have topped consensus per-share estimates in every quarter since well before the recession; the beat was by more than 13% in the fourth quarter.

Performance

Shares are trading at 16.4 times current earnings estimates, which is well below the industry average. Phillips-Van Heusen has a price/earnings-to-growth ratio of 1.0 and a long-term earnings per share growth forecast of 13.7%. Analysts on average have recommended buying PVH for more than 90 days; their mean price target is currently $75.60 per share.

The share price has pulled back about 7% in the past month from near the 52-week high of $72.42. The stock ended last week at $66.58, which is above the 200-day and 50-day moving averages. Over the past three months, Phillips-Van Heusen has outperformed competitors Perry Ellis (NASDAQ: PERY) and Polo Ralph Lauren (NYSE: RL), as well as the broader markets.

Posted-In: Calvin Klein Emanuel Chirico IZOD jcpenneyEarnings Long Ideas Previews Trading Ideas

 

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