Chirico attributed PVH's strong quarterly results to both the Warnaco acquisition as well as improvements in gross margins and tax rates. He said many of PVH's brands, including Heritage, IZOD and Tommy Hilfiger, are performing well, as is Calvin Klein. Chirico even called out the new store designs at JC Penney (JCP) as an area of strength.
Chirico noted that PVH was affected by Hurricane Sandy in the Northeast, that area of the country representing about 35% to 40% of sales this time of year. But even with store closures, Chirico said PVH was able to compensate in other areas.
When asked about the Warnaco acquisition, Chirico once again reiterated the deal will be accretive to PVH's earnings in year one but will really start to deliver for the company in years two and three. He said now is a great time to invest and acquisitions like Warnaco allow PVH to grow its brands into global powerhouses.
When asked about international growth, Chirico was bullish in his outlook for Asia and Latin America as well as in South America. He said that when you have great brands, they drive consumers into your stores no matter what the economy is doing, and that is certainly the case for many of PVH's world-renowned brands.Cramer remains bullish on PVH.
Food for ThoughtIn his second "Executive Decision" segment, Cramer checked in with Gary Rodkin, CEO of ConAgra Foods (CAG), which on Tuesday announced the $6.8 billion acquisition of private-label food maker Ralcorp (RAH). Rodkin explained that one key aspect of ConAgra's growth strategy is private-label foods, and with the Ralcorp acquisition his company is now the largest player in that space. He said ConAgra already sells almost $1 billion worth of private-label products annually, so they are coming to the private label business with considerable experience. The goal is not to compete with ourselves, said Rodkin. One of the things Ralcorp does for ConAgra is give it more access into channels such as Costco (COST) and Target (TGT) as well as with specialty supermarkets like the privately held Trader Joe's. Many private-label goods are in different segments and channels, he said, which means more sales for both categories.
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