Bagging The Paisleys: Wunderlich's Bullish Thesis On Vera Bradley And PVH

While challenges for Vera Bradley, Inc. VRA could continue in the near term, the company seems to be taking the necessary steps for a revival in the back half of fiscal-year 2018, Wunderlich’s Eric Beder said in a report. In a separate report, the analyst mentioned that PVH Corp PVH's international operations could continue delivering a strong performance in FY 2018.

While reiterating Buy ratings for both companies, Beder set the price target for Vera Bradley at $11 and that for PVH at $125.

Vera Bradley

The handbag segment has got increasingly challenging, with consumer apathy and pricing pressure from competition, Beder noted. He added that cotton bags have continued to be Vera Bradley’s best-selling item, and arresting the decline is “a key focus.”

The company has hired new design staff to reinvigorate the product offerings, among other measures. The new product rollouts are scheduled for June, with average pricing expected to rise 10–20 percent.

Management does not seem to be focusing on increasing department store penetration; rather, there’s an aggressive shift online and Vera Bradley is experimenting with “creative ways to clear goods,” the analyst stated.

“We continue to believe Vera Bradley management is making the right choices to create a materially more diversified accessories player that can drive solid results; 2HFY18 will be a key period, in our view,” Beder commented.

PVH Corp

The company reported healthy fourth-quarter, FY 2017 results, with top and bottom line significantly ahead of expectations. The beat was driven by international upside at both Tommy Hilfiger and Calvin Klein, despite continued current headwinds.

Beder expects PVH’s international momentum to continue in Q1, driving “solid upside to guidance.” He mentioned that the international stores of both Calvin Klein and Tommy Hilfiger were recording “high single-digit positive comps,” and that the Fall order books were up 25 percent for Calvin Klein and 10 percent for Tommy Hilfiger.

Moreover, the company has continued to gain share in the domestic markets. “We view PVH as one of the best positioned plays in our universe,” the analyst wrote.

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Why PVH Is Bucking The Retail Trend ________ Image Credit: By ImGz (Own work) [GFDL ( or CC BY-SA 3.0 (], via Wikimedia Commons

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Posted In: Calvin KleinEric BederTommy HilfigerWunderlichAnalyst ColorLong IdeasReiterationAnalyst RatingsMoversTrading Ideas