What: Shares of apparel company PVH (NYSE: PVH ) , known previously as Phillips-Van Heusen, jumped as much as 11% after the company reported better-than-expected first-quarter results.
So what: For the quarter, PVH reported an adjusted profit of $1.91 per share as revenue rose 34% to $1.91 billion. Comparatively, Wall Street expectations had only called for EPS of $1.35 on $1.88 billion in sales. The big boost in revenue came from the company's acquisition of Warnaco Group earlier this year, with revenue from its Calvin Klein segment growing by triple digits. Furthermore, PVH backed its full-year view, which calls for $7 in EPS and approximately $8.2 billion in revenue.
Now what: If anything, these results show that consumers are willing to spend more for affordable brand names even if their take-home pay is shrinking because of higher taxes. That's great news for PVH, which, with its purchase of Warnaco, brought all licensing of Calvin Klein jeans and underwear under one company (it purchased the design and product development aspects of Calvin Klein in 2003). With sales soaring last quarter, I feel there could still be some life left in PVH's legs even following today's big run higher.
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