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Liz Claiborne At IXR Conference Today

|Includes:Kate Spade & Company (KATE)

Liz Claiborne (LIZ) stock has rallied back 3.5% today from the warning after the close on Monday that led to a 13% drop yesterday. See our note from 2 days ago.

Apparently at the ICR XCHANGE conference today, CEO presented some bullish 2012 comps news on the 3 brands. See below. He also reiterated that the majority of any decline in EBITDA expectations were due to a reduction in the expected cost cuts reached in 2012.

kate spade: 10%+
Lucky Brands: 10%
Juicy Couture: 5%

Anybody following LIZ should browse through the presentation on the website. It provides some good summaries and expectations for the global expansion of the 3 brands.

LIZ is almost like a biotech firm with 3 promising drugs that just got FDA approval. That's the feeling one gets when reading about these brands potential and how they were all held back with the restructuring in LIZ over the last 3-4 years.

Each brand has the potential for over $1B in annual sales with kate spade expected to be a multi billion brand. If that seems lofty, just note that Coach (NYSE:COH) is expected to hit $4.7B in sales this year.

One should consider that Coach (COH) trades at a multiple of over 4x sales. LIZ has a multiple of only .5x sales. As kate spade and Lucky Brands keep popping out those double digit comp gains, look for a shift in the multiple to something greater than 1x.

The stock has already responded recently hitting 52 week highs, but the story is still in its infancy. LIZ or FNP in May is now a growth story where the focus on comp sales and new stores will be the norm. This could and should lead to dramatically higher prices. LIZ trades at very low multiples considering the franchise brand had 58% comps in Q4. Heck even Lucky Brand had 20% comps.

Now with the expectation that 2012 will be the inflection point with Juicy Couture and LIZ will become a major growth story.

Disclosure: I am long LIZ.

Stocks: KATE