PVH just changed the retail narrative

The parent company of Calvin Klein and Tommy Hilfiger has “changed the narrative” for the retail sector, and its stock still has more upside, CNBC’s Jim Cramer said Monday after the major averages fell slightly on earnings worries.

PVH had a very rough time in the second half of 2018. Even though shares have rallied $18 from their Christmas Eve lows, … the darned thing is still down $65, or 38 percent, from its highs last summer,” the “Mad Money” host said.

But after PVH recently raised its fourth-quarter and full-year guidance, announcing it would restructure the struggling parts of its Calvin Klein business, the prospects seriously improved for the international retailer and its counterparts, Cramer said.

“Contrary to the worries on Wall Street, PVH is actually doing better than expected across all of its businesses, whether you go by brand or by geography,” he said, recapping the announcement. “Even their Chinese business is pretty much unchanged, and North America’s strong. And, hey, if PVH can breath new life into Calvin Klein, that will be a huge positive.”

All in all, with PVH’s stock trading at only nine times next year’s earnings estimates, Cramer said investors were getting a buying opportunity in the apparel play — and some welcome relief in other retail names.

“These numbers showed that PVH’s earnings are much, much, much more resilient than most people believed,” he said. “I say there’s a lot more upside.”

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