All posts tagged Retail

J.C. Penny – The Weak Sister In Retail Family

JCPenney in Frisco, TX

JCPenney in Frisco, TX (Photo credit: Wikipedia)

JCP

 NYSE : $17.57
J.C. Penney was taking it on the chin Thursday after reporting weak Q4 results, with CEO Ron Johnson admitting the company had made big mistakes in its turnaround effort.

The retailer posted a loss of $2.51 per share, much wider than the $0.24 loss that analysts had expected while same store sales sunk by 31.7%. Internet sales, which have been rapidly increasing across the industry, fell by 34.4% at JCP. Revenue fell 28.4% to $3.8 billion. Johnson said that in his quest to “be the favorite store for everyone:, the retailer had made some errors, including marketing issues and an assessment that customers want simple pricing without constant sales.

He commented, “I had a personal conviction to deliver everyday value beginning with truth on the price tag. We worked really hard and tried many things to make the customer understand that she could shop anytime on her terms. But we learned she prefers a sale, at times she loves a coupon and always, she needs a reference price.”

Going forward, the company will be running sales, as opposed to “everyday low pricing” and will begin to offer some coupons.

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by jackbassteam on March 4, 2013  •  Permalink
Posted in Retail Stores
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Posted by jackbassteam on March 4, 2013

http://amp2012.com/2013/03/04/j-c-penny-the-weak-sister-in-retail-family/

Columbia Sportswear Retail Winter Blues

Cold Weather Is Coming, Beware!

Cold Weather Is Coming, Beware! (Photo credit: Wikipedia)

COLM : NASDAQ

 US$50.66)

Columbia Sportswear reported Q4 EPS of $1.15 versus consensus of $1.14.

Initial 2013 guidance of flattish sales and EBIT margin contraction is worse than he expected. With the fall order book yet to be completed, visibility remains low as retailers exhibit incremental caution. Lyon believes the flat 2013 sales guidance from Columbia portends continued challenges for the winterreliant vendors in 2013.

While winter apparel inventory is relatively clean in the channel due to early and steep discounts, retailers are looking to cut fall 2013 pre-book orders by 10-20% in the category. They are becoming hyper-conservative after two warm winters and are trying to force the vendors to take all the inventory risk.

Lyon believes this heightens the risk for brands most exposed to this category such as COLM and North Face (VFC). Unlike apparel, cold-weather footwear inventory is heavy in the channel, he believes, and will likely result in retailers carrying product over to next season. This will likely lead
to a reduction in open-to-buy dollars for fall 2013. Given the extended lead times in footwear, the vendors will have to take inventory onto their balance sheets with the hopes of getting at-once orders later in the season, or build inventory to lower order levels. In either case, Lyon sees another challenging year for the cold-weather footwear brands like Deckers (DECK) and COLM, and to a lesser extent Wolverine World Wide (WWW).

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by jackbassteam on February 12, 2013  •  Permalink
Posted in Clothing, Retail Stores
Tagged , , , , , , ,

Posted by jackbassteam on February 12, 2013

http://amp2012.com/2013/02/12/columbia-sportswear-retail-winter-blues/

lululemon athletica inc – BUy The Pullback

Lululemon Athletica

Lululemon Athletica (Photo credit: Wikipedia)

lululemon athletica inc
LULU : NASDAQ : US$72.30
BUY 
Target: US$91.00

COMPANY DESCRIPTION:
Lululemon Athletica Inc. is a designer and retailer of technical athletic apparel operating owned retail stores primarily in North America and Australia. The Company offers a range of performance apparel and accessories for women, men and female youth. Its apparel assortment, including items such as fitness pants, shorts, tops and jackets, is designed for healthy lifestyle activities like yoga, running and general fitness.

Investment recommendation


LULU pre-announced Q4/12 EPS results of $0.74, above the $0.71-$0.73 guidance but in line with us and consensus. Sales are expected to come in at the high end of the $475M-$480M range, ex-the 53rd week, on a HSD comp. We believe expectations were for a LDD comp, and as a
result the stock traded off 7% after hours. We would use the weakness as a buying opportunity as: 1) demand for the brand has not ebbed
whatsoever, we believe, 2) gross margins were better than plan, indicating no incremental y/y markdown activity, and 3) strong gift card
sales were not a part of Q4 results, suggesting the potential for a solid Q1/13. Our expanding production/comp reacceleration thesis is very
much intact, and thus we reiterate our BUY rating and $91 target.
Investment highlights
 Consistent with our markdown analysis note from Jan. 9, LULU’s markdown rate was comparable to last year’s as evidenced by better-than-planned gross margin, suggesting demand for the brand is as strong as ever, and increasing competition is not a factor.
 We believe Q4 gift card sales, which are not included in Q4 sales, were up triple digits. We estimate gift cards could add 7-8ppts to the
Q1/13 comp when redeemed.
 Execution issues stemming from incomplete systems/POS upgrades also likely contributed to unmet sales during Q4.
Valuation
We arrive at our $91 price target by applying a blended average of 35x our 2013E EPS, 25x EV/EBITDA, and DCF

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by jackbassteam on January 16, 2013  •  Permalink
Posted in Retail Stores
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Posted by jackbassteam on January 16, 2013

http://amp2012.com/2013/01/16/lululemon-athletica-inc-buy-the-pullback/

Deckers Outdoor Corporation HOLD

UGG Australia

UGG Australia (Photo credit: Wikipedia)

Nov. 28

Deckers Outdoor Corporation

DECK : NASDAQ : US$36.27
HOLD  Target: US$37.00

COMPANY DESCRIPTION:
Deckers Outdoor Corp. engages in the design, manufacture, and marketing of footwear and accessories for outdoor activities and casual lifestyle use. DECK distributes their goods through specialty retailers, department stores, outdoor retailers, sporting goods retailers and online retailers. DECK also sells directly to consumer through its websites and retail concept stores. The company was founded in 1973 and headquartered
in California.

Investment recommendation
While there was little commentary around current trends at the UGG fall 2013 line review, we were encouraged by some of the evolution in the
classic and fashion lines as greater innovation at reduced price points was a key message. Despite pre-lines going well, the challenge of
transitioning the younger classics consumer to fashion-forward product persists. Moreover, our immediate concerns around poor sell-through
rates at wholesale have not eased and as such, we maintain our HOLD.
Investment highlights
Pricing on fashion product has been too high ($500+) prompting reductions to a more appropriate range of $200-$495, which should help improve consumer adoption of the line. UGG collection pricing will also be down 25%, indicating subpar sell-throughs. Importantly, classics pricing will not increase next year.
 The fall 2013 line will have 100 fewer SKUs (~15% of total) via edits to the women’s core and collection lines. While a healthy move, it also appears that DECK is still searching for that fashion consumer.
 UGG is adding more embellishments (i.e., buckles and studs), color/patterns/prints, and fold-down cuffs to the line. These trends correspond with current fashion; however, we fear UGG will be a season behind all other vendors.
Valuation
Our $37 target is a blend of 9x 2013E EPS, 6x EBITDA, and DCF.

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by jackbassteam on November 28, 2012  •  Permalink
Posted in Retail Stores
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Posted by jackbassteam on November 28, 2012

http://amp2012.com/2012/11/28/deckers-outdoor-corporation-hold/

Francesca’s Holdings Corporation Buy Target $ 30

Francesca

Francesca (Photo credit: Paolo Neoz)

Nov. 19

Francesca’s Holdings Corporation

FRAN : NASDAQ : US$23.95
BUY Target: US$30.00

COMPANY DESCRIPTION:
Francesca’s Holdings Corporation is the holding company for specialty retailer Francesca’s Collections. Through a national chain of over 350 retail boutiques and an ecommerce web site, Francesca’s sells apparel, jewelry, accessories, and gift items with an assortment tailored to its core 18-35 year-old, fashion-conscious female customer .

Investment recommendation
We believe FRAN’s unique business model positions the company to profitably expand its store base. A low-cost, small-footprint store model has translated to EBIT margins in the mid-20% range and one of the specialty retail group’s highest ROIC at around 30%. We expect FRAN’s boutique feel, driven by a broad and trend-right product assortment, should continue to resonate with customers as the company expands square footage at the highest annual rate among all of the companies in our coverage universe.

We estimate double-digit SSS growth will persist in FY13, and we are modeling for EPS of $1.29.

Investment highlights
 We forecast annual square footage growth of 18% over the next five years. By comparison, the specialty retail group average is +6%.
 FRAN’s growth potential warrants a premium to the specialty apparel peer group. We estimate sales and EPS will grow at annual rates of 29% and 39%, respectively, over the next three years versus the group averages of 8% and 19%.

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by jackbassteam on November 19, 2012  •  Permalink
Posted in Fashion, Retail Stores
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Posted by jackbassteam on November 19, 2012

http://amp2012.com/2012/11/19/francescas-holdings-corporation-buy-target-30/

Williams-Sonoma Target $ 55

The Williams-Sonoma flagship store in Union Sq...

The Williams-Sonoma flagship store in Union Square, San Francisco. (Photo credit: Wikipedia)

 

 

Nov 15Williams-Sonoma

WSM : NYSE : US$45.11
BUY Target: US$55.00

Consumer & Retail — Specialty Retail
SALES MOMENTUM PERSISTS IN Q3
Investment recommendation
WSM reported Q3 EPS of $0.49, $0.05 ahead of our estimate and $0.04 above consensus. Prior guidance was $0.43-$0.46.
Comparable brand revenue (including DTC sales) increased 8.5% on top of +7.3%, above our forecast of 4.4% growth. Pottery Barn’s comparable brand revenue was up 11% on top of +7%, and the Williams-Sonoma brand turned in its first positive result in four quarters. The gross margin increased 70bps yr./yr., above our forecast for flat GM.

WSM raised its FY12 operating EPS guidance by $0.01 to $2.45-$2.52. We are raising our FY12 estimate $0.01 to $2.52. We are maintaining our BUY rating and DCF-generated price target of $55. At 15x our FY13 EPS estimate (ex-cash/share of $2.72) and 6x FY13E EV/EBITDA, we don’t
believe the growth potential of the e-commerce business is adequately reflected at the current valuation.
Investment highlights
 Q4 EPS guidance of $1.21-$1.28 appears conservative. This includes $0.02 in expenses related to WSM’s Australia expansion and the impact of Hurricane Sandy. Our Q4 EPS estimate moves $0.03 lower to $1.28 versus consensus of $1.33.

 We are raising our FY13 EPS estimate by $0.04 to $2.90, $0.09 ahead of consensus. We forecast comparable brand revenue growth of 7.5% on top of +5.9%,

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by jackbassteam on November 15, 2012  •  Permalink
Posted in Retail Stores
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Posted by jackbassteam on November 15, 2012

http://amp2012.com/2012/11/15/williams-sonoma-target-55-2/

Steven Madden, Ltd. BUY Target $ 53

Description unavailable

Description unavailable (Photo credit: Raleene)

Steven Madden, Ltd.

Oct. 31

 

SHOO : NASDAQ : US$42.83  BUY Target: US$53.00

COMPANY DESCRIPTION:

Steven Madden, Ltd., together with its subsidiaries, designs, sources, markets and sells fashion-forward footwear for women, men and children. The company was founded in 1990 and is headquartered in Long Island City, New York. SHOO has a portfolio of brands that reaches globally among all economic tiers. SHOO offers products through wholesale partners, an e-commerce platform and its own retail stores

Investment recommendation

We are anticipating a solid earnings report from SHOO when it reports on Thursday, November 1 BMO. We believe our EPS estimate of $0.87 (consensus of $0.90) could prove conservative by ~4c based on stronger wholesale sales and gross margin. We believe above-plan sell-through of booties drove solid footwear sales while handbags propelled accessories growth. Moreover, the studded trend is pushing ASPs higher. Retail comps (7% est.) likely also benefitted from similar trends; however, we believe that like with most retailers, traffic slowed in late September.

While we expect commentary to be relatively reserved on the conference call due to choppy traffic trends and Hurricane Sandy, we remain positive on SHOO’s prospects and thus reiterate our BUY.

Investment highlights  

Growth may suprise to the upside driven by solid sales of booties, casuals (Superga), and anything with studs. According to our checks, early fall boot reads have been better than plan, particularly short shaft boots (e.g. Troopa). In addition, we expect the strength in handbag sales to continue and drive wholesale accessories growth of 20%+.   Gross margin expansion in Q3 as the mix impact of TGT’s private label business lessens and direct sourcing efforts manifest. We are modeling margin expansion of ~80bps.

Valuation

We arrive at our $53 target by applying a blended average of 15x 2013 P/E, 9x EV/EBITDA, and DCF.

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by jackbassteam on October 31, 2012  •  Permalink
Posted in Fashion, Retail Stores
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Posted by jackbassteam on October 31, 2012

http://amp2012.com/2012/10/31/steven-madden-ltd-buy-target-53/

SanDisk – Beating Estimates

Image representing SanDisk as depicted in Crun...

Image via CrunchBase

SanDisk (SNDK : NASDAQ : US$44.02)

 

October 22
pn a flash! SanDisk bucked the broader trend on Friday, after the maker of flash memory for mobile devices reported
quarterly profit and revenue that beat analysts’ estimates on strong retail sales and high demand for mobile devices.

Thirdquarter earnings were $0.48 a share on sales of $1.27 billion; analysts on average had estimated profit of $0.34 on revenue of
$1.22 billion. The company said it benefited from robust demand from manufacturers of hand-held devices that use its type of
memory, which is more compact and easier to update than other kinds.

Profit was also boosted by increasing chip prices.Analysts note SanDisk is definitely benefiting from reductions in NAND supply, saying it’s clearly outperforming and the stars have aligned at least for the near term. Going forward, the company is planning to focus more on the iNAND technology, as this is going to be a driver for its mobile-embedded products. It expects the launch of several new smartphones and tablets,
Ultrabooks and other end-client PCs, running on solid-state drives, which should boost demand for NAND Flash gadgets.

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by jackbassteam on October 22, 2012  •  Permalink
Posted in Computers, Tech stocks
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Posted by jackbassteam on October 22, 2012

http://amp2012.com/2012/10/22/sandisk-beating-estimates/

BEST BUY – continues to search for meaning in an Amazon World

Best Buy sign

Best Buy sign (Photo credit: Ron Dauphin)

Oct 15

Amazon.com (AMZN : NASDAQ : US$242.75)

ABC: Always Be Closing. 

The Wall Street Journal reported on Friday that Best Buy planning to match the prices of Internet competitors such as Amazon.com (AMZN)

this holiday season, even as it plays down its concerns over shoppers browsing gadgets in stores only to buy them for less online. Best Buy said it wants to turn more shoppers into actual buyers.

The electronics chain also is preparing to offer free home delivery on merchandise that is out of stock in stores, according to a person familiar with the matter, in spite of recent remarks by new CEO Hubert Joly that “showrooming” by consumers has been blown out of proportion. The electronics retailer says it is taking these steps to improve the percentage of people who walk into their stores and leave with a purchase, which is about 40% of shoppers.

The Journal noted that Best Buy’s seemingly contradictory stance underscores the conundrum facing executives at many big-box chains. Aware that they need to adapt aging business models to the realities of mobile- and computer-aided shopping, they don’t want to overreact or lose sight of what made them successful – namely, selection and service.

 

 

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by jackbassteam on October 15, 2012  •  Permalink
Posted in Amazon, S&P
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Posted by jackbassteam on October 15, 2012

http://amp2012.com/2012/10/15/best-buy-continues-to-search-for-meaning-in-an-amazon-world/

Smart Balance, Inc. Smart Growth BUY

Gluten Free Vegan Quiche

Gluten Free Vegan Quiche (Photo credit: nc_hiker)

Sept 23

Smart Balance

SMBL  NASDAQ  12.00

Investment recommendation

We continue to believe that Smart Balance has a favorable financial model and platform for growth in the healthier foods arena that is highlighted by its rising exposure to gluten-free.

Investment highlights

Smart Balance’s natural food brands were well represented at the Natural Products Expo trade show this past weekend.

Gluten-free again seemed to be a draw and Udi’s new tortillas, to be available in 6″ and 9″ offerings, seemed to get the most attention at the booth with a steady stream of retailer interest.

Tortillas have been highly anticipated by investors. We saw the production equipment during a facility tour last month, but production had not begun. Availability could be soon with January offered as the conservative estimate to retailers.

Valuation

Shares trade at 39x our F2013 EPS estimate and 14.5x F2013 EBITDA, which is a premium to the peer group of healthy food stocks. Our $13 price target is predicated on about 13x preliminary 2014E EBITDA, which is a valuation consistent with where the peer group trades on out-year EBITDA forecasts.

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by jackbassteam on September 24, 2012  •  Permalink
Posted in Fast food, Restaurants
Tagged , , , , , , ,

Posted by jackbassteam on September 24, 2012

http://amp2012.com/2012/09/24/smart-balance-inc-smaert-growth-buy/

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