Turning closer to home, Chirico said the U.S. back-to-school shopping season is off to a strong start and North American same-store sale comparisons are in the high single digits. He also mention a new rollout of the company's Izod brand at J.C. Penney (JCP) as another highlight.
When asked to comment on the partnership with J.C. Penney and the company's turnaround plans, Chirico said Penney's store-within-a-store concept is a great way to showcase PVH's brands and the company clearly has a clear path to where it wants to be. PVH remains supportive of J.C. Penney, he said, which is seeing good performance in the early days of the turnaround.
Chirico also had positive things to say about Macy's (M), another retailer that has helped PVH grow its brands over the past three years. He said Macy's continues to do a fabulous job.
When asked about the specifics of the business, Chirico confirmed that input costs are falling but many have been offset by higher labor costs. He said PVH continues to be happy with its partnership with Warnaco (WRC), which licenses the Calvin Klein brand in certain categories.
Chirico, Part 2Continuing his interview with Manny Chirico, Cramer asked how the company can justify its 31 flagship stores around the globe. Chirico explained that PVH looks at its flagships more as brand builders and considers part of their costs to fall under marketing. Rather than advertise on a billboard, which goes away after a few months, the stores remain in high-traffic areas around the world as a symbol of what their brands represent. When asked further about how PVH is positioning brands like Calvin and Tommy, Chirico said in North America they're looked at as premium brands, targeted towards the upper-income demographic. Fortunately, that's a sweet spot right now as that segment is not suffering from the economic slowdown, he added. So just how big a player is PVH? Chirico said that in most department stores, when it comes to men's dress shirts you'll find PVH controlling 50% to 75% of the floor since PVH now has nine of the top 10 best-selling dress-shirt brands.
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