Maidenform Brands, Inc.

Maidenform Brands, Inc. (MFB - Snapshot Report), the maker of women's intimate apparel, saw sales leap 16.4% in the first quarter as shapewear remained hot. The company has surprised on estimates 4 consecutive quarters on average by 26.88%. MFB is trading with a PEG ratio of 0.86.

Company Description

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. The 86-year old company recently launched the Donna Karan and DKNY licensed brands.

Sales Jumped 16.4% in the First Quarter

On May 13, Maidenform reported first-quarter earnings that surprised on analysts' estimates by 52.94%. Earnings per share were 26 cents which was flat with the first quarter of 2008 but 9 cents higher than analysts' estimates of 17 cents per share.

Net sales rose 16.4% to $114.2 million compared to the year ago period. The quarter saw growth in products using the Total Solution technology and in the launch of its Donna Karan and DKNY lines. Shapewear was hot, as sales surged 21.1%.

Department store sales lagged by 8.9% due to overall economic weakness in the department store sector. It also reflected lost sales associated with bankruptcy filings of retail partners.

Mass merchant sales climbed 29.7% due, in part, to the expansion of the Sweet Nothings brand in shapewear and bras.

Full-Year Guidance Raised

Forecasting earnings has been difficult for most companies over the past few months. Maidenform, however, is relatively optimistic going into the rest of 2009.

Sales for the second quarter are expected to be flat to higher in the low single digits compared to a year ago. The company forecast EPS in the range of 21 to 25 cents per share.

For the full year, sales are expected to rise in the low-single digits range for the second half of 2009 compared to a year ago. Full year sales are expected to grow by the mid-single digits.

Maidenform also raised its 2009 guidance to $1.00 to $1.10 from its prior forecast of 90 cents to $1.00 per share.

Consensus Estimates Rise

Since the big estimates surprise in mid-May, covering analysts have been moving to raise consensus estimates in line with the company's guidance. Full-year consensus estimates are up 13 cents to $1.04 per share, with both of the 2 covering analysts raising in the last 30 days.

Value Fundamentals

Maidenform is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 11.02 and a price-to-book ratio of 2.24. The company also has an outstanding average 5-year return on equity (ROE) of 35.17%.