Consumers can’t get enough shapewear. Maidenform Brands, Inc. (MFB) recently reported fourth quarter results and saw shapewear sales jump 22%. Even with shares at 5-year highs, MFB still has strong value credentials.
This Zacks #2 Rank (buy) sells intimate apparel, including shapewear (items that women, and some men, wear underneath clothes that make you appear thinner), at department stores and other retail outlets in 64 countries.
It offers various recognizable brands such as Maidenform, Control It!, Flexees, Inspirations, Sell Expressions and Sweet Nothings. The company also produces the DKNY and Donna Karan licensed brands.
Another Quarter, Another Beat
Even though Maidenform Brands provides quarterly guidance, the company has been consistently beating the consensus estimate for the last five years.
If you check out the earnings surprises below, it has only missed one time and that was all the way back in 2007.
Given how the recession battered the retailers, it is especially impressive that the company was able to maintain the streak. The streak could also be attributed to good guidance expectations.
On Mar 2, Maidenform reported fourth quarter results of 29 cents, a penny better than the Zacks Consensus. It made 34 cents in the year ago period.
Sales Strong Across Multiple Channels
Sales rose 8.6% to $118.6 million, led by a 10% increase in sales in the wholesale segment which accounted for $105.2 million of the sales in the quarter.
Department store sales rose 14.2% to $49.1 million as strong shapewear and bra sales boosted results.
Mass merchant sales climbed 26.6% to $31.4 million due to an increase in shapewear sales at all of its major mass customers, including warehouse clubs.
International sales were also solid, rising 12.6% to $11.6 million due to strength in Mexico, Spain and Russia, although Canadian sales showed some weakness.
Only sales to other channels, primarily specialty retailers and off-price retailers, declined, falling 11.2% to $24.7 million.
Affirmed Full Year Outlook
For the first quarter of fiscal 2011, the company expects sales to rise 8% to 11% compared to Q1 of 2010. Gross margin rates are expected around 35%.
The company affirmed its previous fiscal 2011 outlook of earnings per share around $2.15. Sales are expected to grow 10% to 12%.
Zacks Consensus Estimates Rise
In the last 30 days, the 2011 Zacks Consensus Estimate jumped 4 cents to $2.14. This is in line with the company’s guidance range and would be earnings growth of 10.2%.
The 2012 estimate has come down a bit, falling 5 cents to $2.38 per share over the last month, but that is still earnings growth of 11.4%.
Still a Value Stock
Maidenform Brands has a forward P/E of 13.2 despite its shares trading at new highs.
Its price-to-book ratio has risen, however, to 3.4, which is a little hot for a value stock, which is normally under 3.0. But it’s still do-able for a value investor.
Investors will also get a stellar return on equity (ROE) of 26.2%.
This Week’s Value Zacks Rank Buy Stocks
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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service. You can follow her at twitter.com/traceyryniec.
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