Maidenform Brands (MFB): Solid Growth and Upside Potential

Another nice earnings surprise in today’s earnings reports came from Maidenform Brands (MFB), maker of women’s intimate apparel. The shares gapped up by $2 in pre-market trading and traded higher later in the day.

The company reported earnings of $0.51 per share, beating consensus estimates by $0.11 per share and nearly doubling earnings for the same period last year, reported at $0.26 per share.

Revenues jumped 25.1 percent for the first quarter, coming in at $142.90 million. Like FOSL’s earning report, higher revenues were led by a significant increase in wholesale business activity, a weak dollar, and higher global sales. The company revised guidance to upwards of $0.45 to $0.50 per share for the second quarter.

In a conference call with analysts, Chief Executive Maurice Reznik said “In 2010, we’re increasing our marketing investment by 20 percent versus last year,” highlighting the company’s plans to develop new products, a new website, and sales kiosks at high-traffic malls.

The company holds 40 percent market share in high-margin shapewear (aka slimwear) products and has a portfolio of established well-known brands.

Comments: Until March of this year, MFB has been flying under the radar with shares selling in the $15 to $15.60 range. In March, the company announced a stock repurchase program to the tune 1.5 million shares, and the stock was rated a BUY by BB&T. Since then, the stock has moved higher on higher volumes and has broken through its yearly high of $24.26. In a strong uptrend and at a PE ratio of 13.4, the stock looks cheap with more room for price appreciation to the upside.

Disclosure: No positions