PVH, Tiffany’s and Macy’s crown Wall StreetThursday, 02 June 2011
In a busy trading session, plagued with corporate releases and
analysts' comments, there were some rising stars in Wall Street listed fashion retailers. It was the case of PVH, Tiffany’s and Macy’s, that together with main British stocks, helped to lift the FashionUnited Top 100 Index.
Phillips-Van Heusen reported Tuesday it swung to a fiscal first-quarter profit as strong sales from its Calvin Klein brand and recently acquired Tommy Hilfiger label drove earnings. Shares rose 3.1% to $68 premarket as the company’s results topped its own prior guidance.
Macy’s said its May same-store sales increased 7.4% year-over-year and that its total sales rose 8.5% to $1.9 billion from $1.7 billion in the year-ago period.. The retailer also raised its forecast for second-quarter same-store sales. Shares rose 2.2% to $29.50 premarket, nearly a three and a half year high.
"We continued to see very strong sales results in May as every Macy’s stores region, Bloomingdale’s stores, macys.com and bloomingdales.com all met or exceeded our aggressive expectations. We can attribute this success to the continued crisp execution of our major strategies," said Terry J. Lundgren, chairman, president and CEO.
For the year to date, Macy’s sales totaled $7.8 billion, up 6.3 percent from total sales of $7.4 billion in the year ago period. On a same-store basis, Macy’s year-to-date sales were up 5.9 percent.
Less luck had Tiffany’s & Co. Deutsche Bank downgraded Tiffany & Co. today, warning the stock is "priced to perfection." Tiffany had been rated a "buy" and now it is a "hold," according to Deutsche Bank.
Tiffany lost 1.28% in yesterday’s trading despite Deutsche Bank raised its price target to $76 from $65.60 in Wednesday's note.
"Tiffany's 1Q12 results were 15% higher than our and consensus expectations, prompting a 14% upgrade to our EPS and a 16% rise in our target price (now $76). We downgrade TIF to Hold due to its strong performance year to date, which has brought the valuation to a 10% premium vs. other global luxury brands. We still like the TIF equity story; we realize the company is in a sweet spot, but the 22x FY12E and 19x FY13E PERs indicate the quality is already in the price," Deutsche Bank's analysts write.
In the meantime, a large number of US retailers are eyeing the ample growth opportunities, a ready customer base and untapped profit potential that neighboring Canada will offer during the next couple of years.
The trip north is an easy way to mount international expansion while keeping a very close eye on its progress. The similarity of customers on both sides of the border makes big changes to stores and merchandise generally unnecessary. And the idea of a less-crowded retail field eases competitive pressures and the difficulties of finding new space in U.S. markets.
"The U.S. market is largely tapped out in terms of expansion opportunity and consumer demand has softened," said Madison Riley, managing director at retail consulting firm Kurt Salmon. "At the same time, the Canadian economy did not suffer as much as ours and there are virtually no regulatory hurdles."