Jun 15, 2016
Calvin Klein maker upbeat on dept stores, shares rise
Jun 15, 2016
Shares of Calvin Klein and Tommy Hilfiger manufacturer PVH Corp rose the most in three months on Wednesday after its chief executive made upbeat comments that also buoyed some beaten down department store stocks.
"Our department store business here in the United States has actually been very good, particularly with our two big brands, Calvin and Tommy," said PVH CEO Manny Chirico at a retail conference in New York.
He said the Calvin Klein brand is having strong sales "in just about every store, including Macy's," which helped shares of the embattled retailer gain as much as 4.5 percent in morning trading. The advance would be its largest daily gain in five months.
PVH stock jumped almost 5 percent, the most since March, while the price brushed $100 per share, the highest it has been since October.
"We are seeing slightly better trends in the second quarter," Chirico said, which builds on stronger-than-expected overall retail sales numbers seen in April and May.
Shares of other department store operators also rose in morning trading as the stronger sales comment from Chirico offered hope for a sector that has suffered as consumers' demand for apparel wanes.
"Expectations for department stores have been set so low that any kind of good news is going to cause them to trade up," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
"It's a glimmer of hope and investors will take it."
Kohl's and Nordstrom shares were up about 4 percent in late morning trading, while J.C. Penney jumped 7.6 percent. The S&P 1500 department stores index gained 4.9 percent, the most since Jan. 11. It is up more than 8 percent from a six-year low hit in May.
Macy's has lost over a quarter of its market value in the last three months alone and in May hit its lowest since 2011 in the wake of weaker than expected sales and a slash to its forecasts.
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