Brean Murray Carret & Co Gives Earnings Preview On Apparel Industry

Brean Murray Carret & Co is reiterating its Buy rating on the apparel industry with Hanesbrands starting off the 1Q earnings season tomorrow. It believes there are a number of specific and general factors which should allow for the apparel industry to remain strong in 1H and beat Street expectations.

Further, it expects management to remain positive on trends for 2Q and initial orders for 2H11; while it understands inflation worries have been a key overhang on the group, it believes, especially for players with strong brands and growing higher margin international sales, that investor fears will prove overblown.

Brean Murray's favorite names in the segment include G-III Apparel Group (NASDAQ: GIII) and Perry Ellis International (NASDAQ: PERY) in the small/midcap arena and Phillips Van Heusen (NYSE: PVH) and Warnaco Group (NYSE: WRC) in the large cap space; that said, it believes a near‐term bull case can be made for virtually all its apparel universe players, especially with valuations below historic levels for the entire group.