Way more upside for PVH

The company has a strong Europe story and a top-notch CEO.

By Jim Cramer Jun 13, 2013 9:33AM

thestreet logoYoung woman clothes shopping (© Image Source/Getty Images)Some CEOs are worth banking on, even in this once-placid, now-treacherous-and-difficult market. Manny Chirico is one of them.


Manny's taken PVH (PVH), the old Philips Van Heusen, from a company with a pastiche of brands and turned it into a total global powerhouse with the purchase of Tommy Hilfiger a few years back.


The acquisition was so successful that people jumped all over the stock when Manny then scooped up Warnaco to get the portion of Calvin Klein that PVH didn't own, especially Calvin jeans, which is a huge brand overseas.


But in a very rare move, PVH missed the last quarter, as it turned out that Warnaco was doing very poorly, particularly in Europe where Spain and Italy are the two biggest markets, and Manny had to guide numbers down by 25 cents, which killed the stock.


Then Wednesday night, he reported the quarter we were all hoping for, with a very solid number from Calvin Klein and still one more terrific number from Tommy, and the stock's roaring back with a vengeance.

But here's what you need to know. The stock's got much more upside than it's delivering today -- much more. The $7 guide is way low.


This will be the quarter that Calvin Klein's distribution system gets rationalized and the right people are put in to turn around jeans. I also think that higher-quality jeans will be in the stores in Europe, which is very important because Calvin jeans have a very high price point in Europe.


If you believe a I do that Europe's bottoming, then you should begin to look forward to some better numbers from Italy and Spain. But more importantly, Tommy's distribution system in Northern, Central and Eastern Europe is superb. Calvin is pretty much non-existent there, but I think that will all change this quarter.


Plus, the weather's been appreciably better for all the brands since the new quarter began.


Tommy gave this company three years of amazing performance as the company wasn't built out and the brand wasn't as big as it is now.


Calvin Klein, after the initial stumble, is now where Tommy was when Manny bought it. The runway here is huge and the company hasn't even had a chance yet to integrate Tommy into the strong Brazillian and Chinese Calvin market.


So, I would buy some, even as it's up huge, because all it is doing is recovering from what should have happened before. Then, I would wait to see if the market brings it down so you can buy more.


It's just that strong a story.




Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.



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Jun 13, 2013 10:20AM
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Jun 13, 2013 3:33PM
Once again you didn't make the Headlines, Jim. This time it isn't you... it's your brothers-in-terror who absolutely will DIE if the Dow stays under 15,000. Pretty sure they are contemplating that now, even yellow journalism can't stall the inevitable forever. Where do you go once you've screwed the whole world? Jobs... UP. Where? Confidence... UP? Where. Kool AID... UP. Cataclysmic collapse hurts.
Jun 13, 2013 10:02AM
well maybe the day is going up again.  still.....  a CLOTHING article?!?!?!?
Jun 13, 2013 9:44AM
A clothing article?  while Rome is burning down?  really?
Jun 13, 2013 4:54PM
Today fortunately didn't develop the way these crooks wanted to; plenty of buying turned their plans and hopes upside down...We needed a day like this after the last 3 crappy ones....Tomorrow may be a whole lot different though, remember, these manipulators will not go away anytime soon.
Jun 13, 2013 3:08PM
Yup, I just can't get too excited about all this....
Jun 13, 2013 11:07AM
Remain cautious...All the typical signs of another sucker's rally....Hope to be wrong but all the signs are there....Manipulators in charge down here, they are owning the floor like they have all week...Be very careful...More later.
Jun 13, 2013 9:54AM
This morning's opening not unlike the rest of the week; not up 119 points, no need for a sucker's rally today but manipulators in control so we are down early, nothing new, these scumbags have owned us all the entire week and will try to drop these markets big again today...Oh well, we will see how things develop, we just opened 20 minutes ago.
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