Oxford, PVH: The Retailers In Fashion At B. Riley FBR

Retail has rode the market rotation to annual highs and clothing manufacturers at the heart of the sector have been rewarded with favorable ratings.

B. Riley FBR came out positive on two apparel companies and ambivalent on two others Friday.

The Rating

Analyst Susan Anderson resumed coverage on:

• Oxford Industries Inc OXM with a Buy and $84 price target;
• PVH Corp PVH with a Buy and $155 target;
• Guess?, Inc. GES with a Neutral and $17 target; and
• G-III Apparel Group, Ltd. GIII with a Neutral and $36 target.

The Thesis

Oxford Industries: Amid Southern Tide’s growth in wholesale expansion and store openings, Lilly Pulitzer’s product and consumer expansion and Tommy Bahama’s flow improvement between full-price stores and outlets, Anderson said she considers Oxford poised to outperform. (See Anderson's track record here.) 

“OXM has best-in-class brands with limited exposure to department stores,” the analyst said. 

PVH: Anderson forecasts PVH driving revenue growth through Calvin Klein sales in Europe and Tommy Hilfiger in Asia. Expense leverage, gross margin expansion and FX improvements are seen to expand margins.

Guess?: Anticipated outperformance in international segments and improving wholesale trends in the Americas are expected to be offset by enduring challenges in American retail comps. The stock is up 46 percent since mid-August, and Anderson said a neutral outlook dependent on trends in the western hemisphere.

G-III Apparel: Having popped 21 percent since September, G-III is expected to improve wholesale business but extend its timeline for an outlet turnaround and ramping of the Donna Karan and Karl Lagerfeld lines.

Price Action

Oxford closed up 0.77 percent at $74.70 Friday; Guess? down 2.12 percent at $17.53, PVH down marginally at $135.60 and G-III down 0.24 percent at $37.07.

SPDR S&P Retail (ETF) XRT was trading near its opening rate at $45.51. 

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