Maidenform Brands Inc. (MFB) is still cashing in on demand for shapewear. Who knew shapewear could be so hot?
Maidenform Brands sells intimate apparel at department stores and other retail outlets through a collection of recognizable brands including Maidenform, Lilyette, Control It!, and Sweet Nothings.
Sales Jumped 31% in the Second Quarter
Since I last reviewed Maidenform Brands in December 2009, the company has continued to grow sales and surprise on estimates.
Shapewear and bra sales continue to drive results with shapewear surging 44% and bra sales climbing 31.6%. Net sales rose 31% to $149.4 million driven by a 35.3% increase in the wholesale segment. The retail segment was flat.
The company is also finding growth in its international sales, which jumped 38.8% to $11.8 million. Sales were strongest in Mexico, the United Kingdom and Spain.
Mass merchant channel net sales were also hot, rising 61.3% to $42.9 million due to strong sales growth in the Sweet Nothings shapewear and bras and the Self Expression shapewear brand.
Maidenform Brands surprised on the Zacks Consensus Estimates by 25.5%. Earnings per share were 59 cents compared to the consensus of just 47 cents.
It was the 11th straight earnings surprise, an impressive track record given the grim global economic conditions throughout most of it for retailers.
Full Year Guidance Raised
For the second time this year, Maidenform Brands raised its full year guidance range. The company now expects EPS between $1.88 and $1.93 up from its May guidance of $1.75 to $1.80.
Analysts are bullish on the rest of the year. The 2010 Zacks Consensus Estimate is already at the high end of the guidance range, at $1.92 per share, up from $1.81 before the second quarter results.
This is projected earnings growth of 48%. The company made just $1.30 in 2009.
Is Maidenform Brands Still a Value Stock?
The company has fallen to a Zacks #2 Rank (buy) stock since I last reviewed it in December but its valuations remain cheap.
It is trading at juts 13.7x forward estimates which is in line with peers but cheaper than the S&P 500 which is trading at 14.2x.
Maidenform Brands also has a price-to-sales ratio of just 1.2.
Additionally, the company’s return on equity crushes its peers at 27.4% versus 12.1%.
Maidenform Brands is scheduled to report third quarter results on Nov 9.
Read the Dec 29, 2009 article.
Update to Previous 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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