PVH shares rise on strong earnings report

[August 29, 2012]  NEW YORK (AP) -- Shares of clothing maker PVH Corp. hit an all-time high Tuesday after a very strong second quarter, led by the popularity of its Tommy Hilfiger and Calvin Klein brands.

THE SPARK: The New York company said late Monday that improved royalty and advertising revenue also helped results, and PVH raised its full year guidance.

THE BIG PICTURE: Like other clothing makers, PVH, formerly known as Phillips-Van Heusen, has faced economic headwinds in Europe as well as high cotton prices, although the latter has begun to ease. And it was star brands like Tommy Hilfiger that performed particularly well in Europe,

THE ANALYSIS: Brean Murray, Carret & Co. analyst Eric Beder said the company has "sterling growth prospects," as Tommy Hilfiger remains strong and Calvin Klein and Heritage Brands regain strength. He kept his "Buy" rating on the stock and raised his price target to $115 from $107.

Meanwhile, Cowen & Co. analyst John Kernan said the company's brands showed "impressive execution."

He added that he believes the company could talk about global growth plans for Tommy Hilfiger and Calvin Klein at its analyst day Oct. 2, and that could spur on the stock. He kept his "Outperform" rating on the stock and raised third quarter and full year estimates.

SHARE ACTION: Shares rose $4.94, or 5.6 percent, to $93.43 during midday trading. Shares, which had already gained 25 percent this year, set a new record at $94.74 earlier in the day.

[Associated Press]

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