Tommy Hilfiger (NYSE:TOM) and Polo Ralph Lauren (NYSE:RL) reported solid earnings today, with two very different stories. Both stocks have bounced off of lows but now are unattractively priced for their respective business.

Tommy Hilfiger stock jumped almost 13% to more than $16 a share after strong growth in Europe and currency gains helped it pound its own earnings estimates. While second-quarter revenue rose only slightly to $547.9 million, earnings grew 6.1% to $64.7 million, or $0.71 per share. That handily beat the analyst estimate of $0.58 per share and the company's own August guidance of between $0.55 and $0.59 per share.

European sales growth of 58% to $152.5 million was enough to offset the 14% decline in U.S. revenue. However, $19.2 million of that growth was due to currency effects, which also helped margins. That said, Tommy Hilfiger doesn't expect growth in Europe to be strong enough to keep overall sales from falling 15% in the third quarter, though it will mitigate a projected 20% decline in U.S. sales in the fourth quarter. Further, while the company showed positive comps in Europe, same-store sales fell in the high single digits in the U.S.

The stock has bounced back from under $6 in April, but at 11 to 12 times this year's earnings, Tommy Hilfiger doesn't look attractive enough to take the plunge.

Polo Ralph Lauren told a different story, as second-quarter revenues increased 10% to $707.8 million. Unlike Tommy Hilfiger, Polo showed an 8.3% increase in same-store sales, enough to more than offset a weak wholesale business in Europe. Net income grew slightly to $54 million, or $0.54 per share, helping it beat estimates by a penny.

In last year's "Companies on the Road to Ruin" (a Hidden Gems special report), I discussed a March 2002 Forbes article describing Polo's moves to help pump its stock price. In it, Ralph Lauren was quoted as saying that the company was "still dissatisfied" with its stock price, and that it hasn't been awarded the "luxury multiple" it "deserves."

Well, as we know, that multiple is a function of performance, not fashion.

Since that article was written, Polo's stock has fallen from $28.51 to the high teens, before bouncing back to $31 a share today. The company has turned in a decent performance, but at 17 times this year's earnings, the stock looks plenty luxuriously priced.

Jeff Hwang can be reached at