Cramer: What Should You Make of PVH?

PVH CEO: Europe Is Huge Opportunity For Us

Wednesday, 27 Mar 2013 | 6:25 PM ET

PVH Corp. CEO Manny Chirico, offers insight on his company's acquisition of Warnaco, and also on international growth. "Jeans is a category that goes in cycles, and I think we're buying Warnaco at just the right time," he says.

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On Wednesday shares of PVH slipped lower to about flat on year.
What gives?

Over the past 30 days the Street has turned skeptical on apparel makers with Michael Kors and Ralph Lauren both lower.

But Cramer thinks there's more too the decline that just a sector rotation.

"PVH has dropped back to the level where it was right after the company announced the Warnaco acquisition on the last day of October," Cramer said.

The Mad Money host thinks that's significant.

The Street may have grown at least somewhat skeptical that the Warnaco acquisition will drive the bottom line - at least in the near term. Yet Cramer believes the company, led by CEO Manny Chirico, is particularly adept at just this kind of integration.

"PVH has had a ton of success in the past buying up its licensees and then operating their businesses more efficiently," said Cramer.

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During a live interview on Mad Money Chirico seemed to confirm Cramer's thesis.

"We're really positioning ourselves for long-term growth," explained Chirico. "We feel strongly that by making this kind of investment today, we can have out-sized growth in 2014 and beyond. I think we bought Warnaco at just the right time especially to capture real growth in the jeans business."

Adam Jeffery | CNBC

And Chirico added sales in the second half of the year should be relatively strong. "The fall / holiday order book is up 10-11%," he revealed.

Cramer believes in the long-term potential. "I still believe in the company," he said.

The Mad Money host explained PVH has a great combination of brands and strong leadership in Chirico.

However, price is truth and the truth is the stock is down.

Therefore, Cramer suggests putting the stock on your radar but not pulling the trigger. "It might not be a buy this quarter, but I'd make sure to check back later in the year."

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