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Overheard on Wall Street: The Buzz On Under Armour, PVH & Versace

What’s new on the business front for major footwear and apparel companies? FN sifts through earnings releases, analyst commentary and press releases to keep you in the know.

Under Armour
Following investor meetings with Under Armour’s management in Chicago, Jeffries Group LLC analysts reiterated their optimistic view of the company’s long-term trajectory. Highlighting that footwear, in particular, is “where it’s at,” the analysts said in a note on March 25 that a “number of compelling growth drivers are in play fueling long-term success.”

“The footwear business grew 44 percent last year and remains a clear priority for the company in the years ahead … The low-hanging fruit opportunity lies in further penetrating the running market in new and existing channels … By product, the Speedform Gemini is a key item to watch.”

PVH Corp.
The parent company of Tommy Hilfiger and Calvin Klein closed Q4 with a decent overall performance despite FX pressure. For the quarter ended Feb. 1, 2015, the New York-based company said its net income was $51.5 million, or 62 cents a diluted share, versus a loss of $37.5 million, or 46 cents, in the year-ago quarter. On an adjusted basis, eliminating costs for the integration of the Warnaco business and other special items, PVH said its EPS was $1.76, beating Wall Street’s estimates of around $1.73.

Watch on FN

“Looking ahead, foreign currency disruptions are expected to wreak havoc on [PVH’s] income statement,” Steve Marotta, a CL King & Associates analyst, wrote in a March 26 note.

“We were encouraged by PVH’s 4Q results in light of a challenging macro environment and currency headwinds that generated a 10 cents negative impact on 4Q EPS,” wrote Bob Drbul, a Normura Securities analyst, in a March 26 note.

Versace Gets Set for IPO
Gianni Versace SpA. reported this week that its profits jumped 27 percent over the past year, to 10.9 million euros, or $15 million. The Milan-based high-end fashion company also revealed that it has adopted International Accounting Standards as it prepares to go public. To support its plans for global expansion, Versace sold a 20 percent stake to money management firm Blackstone Group for 210 million euros ($287 million) last year.

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