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Buyers Flee Nike After Earnings

Nike, Inc. (NKE) is doing horribly this afternoon. As I write this, a quote of $77.51 is on my screen. That represents a drop of over 9% for the shares. Volume is huge. Hopefully many of you out there didn't do an earnings trade on this one.

How bad were the fiscal Q3 numbers? According to MarketWatch, net income of $1.08 per share was four pennies below the overall call by Wall Street. In addition, the potential for a weakening gross margin is said to have played a part in the sell-off.

Continue reading Buyers Flee Nike After Earnings

Nike's Stock Value Is Highly Sensitive to Its Footwear Business

Nike, Inc. (NKE) is the largest global manufacturer of athletic footwear, apparel and equipment by sales volume, and competes with Sketchers, Adidas AG, Steven Madden and K-Swiss in the global footwear market. It sells its products under several brands including Nike, Nike Golf, Converse, Cole Haan, Umbro, and Hurley.

We maintain a $77.52 price estimate for Nike's stock, roughly 13% below market price.

Continue reading Nike's Stock Value Is Highly Sensitive to Its Footwear Business

Wolverine World Wide: Buy or Sell?

I was looking over some of the stocks mentioned in our Analyst Calls piece. Footwear concern Wolverine World Wide (WWW) was initiated with a buy rating courtesy of KeyBanc. Is buying this stock the right thing to do?

At the time of this writing, shares of the company were up fractionally to $36.53. That isn't far off from the 52-week high of $37.52. Volume of shares traded today, however, isn't impressive.

Continue reading Wolverine World Wide: Buy or Sell?

DSW: Buy or Sell After Q2 Report?

DSW Inc. (DSW) has come off its 52-week high of $33.49. The chart shows that the stock has been trending downward since April. One could argue that it is basically following the market and its current bearish tendencies. But what about the fundamentals? What do they say?

The footwear entity, whose related companies include Collective Brands (PSS) and J.C. Penney Company, Inc. (JCP), reported net income of 52 cents per share for the second quarter. Last year at this time, the business made 17 cents per share.

Continue reading DSW: Buy or Sell After Q2 Report?

Collective Brands Down After Q1 Release

Collective Brands (PSS), which owns the Payless ShoeSource concept and competes with Walmart (WMT) and other retailers involved in the footwear industry, is down this afternoon by almost 9%. With about a half hour to go before the end of the session, the shares are trading at $19.63.

Why is the stock down? Looking at the Q1 earnings report, one gets the sense that the growth rate was attractive. The company made 83 cents per share versus 59 cents per share twelve months ago. Expectations were set at 75 cents per share. Free cash flow increased well over 8%. Shouldn't investors be bidding the shares higher?

Continue reading Collective Brands Down After Q1 Release

Are Nike's Storm Clouds Clearing

Shares of Nike, Inc. (NKE), which I first wrote about on May 12, 2009 at a price of $50.98, navigated recent turbulence in decent shape.

Look for Nike to post a 1-3% fiscal 2010 revenue increase, followed by a better performance in 2011, boosted by international market sales, which account for 60% of revenue. A decent $1.08 annual dividend adds to the positive story.

Meanwhile, margins should remain near 12.8%, aided by continued corporate staff rightsizing and efficiency improvements.

Continue reading Are Nike's Storm Clouds Clearing

Emerging Markets and Electronics Retailers Sport Best Intangible Values

The 2009 equity market recovery has led to an increase in Q ratios for the world's largest retailers. What does this mean? They're using their tangible assets effectively and have demonstrated the strength of intangible factors, such as brand and operational efficiency, to create shareholder value.

"Q" is the ratio of a public company's market capitalization to the market value of its tangible assets. So, a Q ratio of above one means that investors value the company's non-tangible assets -- e.g., brand, differentiation, innovation, customer experience and customer loyalty -- and see these factors as reasons to pay a higher price per share. A company with a Q ratio of below one can't generate a sufficient return on its physical assets. According to Deloitte, this could create an arbitrage opportunity, as it may be ripe for an acquisition.

Continue reading Emerging Markets and Electronics Retailers Sport Best Intangible Values

Nike: For now, hold shares

Nike has strong fundamentals, an exceptional brand, and ample opportunities to expand in emerging markets. And yet the stock has meandered for the better part of four months -- straddling the critical 50-day moving average. What's going on here?

More than likely, institutional investors are concerned that Nike, Inc. (NYSE: NKE) will fall prey to consumer pull-back, even though 60% of the company's sales are outside the now 'frugal consumer' U.S.

Continue reading Nike: For now, hold shares

Collective Brands comes up short in the second quarter

Collective Brands (NYSE: PSS), which owns the Payless shoe store, issued its Q2 release after the bell on Wednesday. Earnings per share took a significant dive once you made some adjustments for last year's results. They came in at 29 cents per share, a decrease of over 40%. Net sales went down over 8%.

On the surface, the news isn't good -- and it gets worse. As we all know, every investor has to play the earnings game with Wall Street. Collective Brands lost the good fight. The market was looking for 33 cents per share, according to Earnings.com. Coming in four pennies short is about as comfortable as wearing sneakers two sizes too small. Shares of Collective Brands were punished in the after-hours' session, with investors bidding the stock down by close to 7% at one point, though it later recovered.

Continue reading Collective Brands comes up short in the second quarter

Crocs loses less than expected -- time to celebrate!

After the closing bell sounded yesterday, footwear firm Crocs (NASDAQ: CROX) reported second-quarter earnings, or should we say second-quarter loss -- yet the Street is ready to celebrate.

The foam footwear manufacturer reported a second-quarter loss of $30.3 million, or 36 cents per share. Taking a $34.8 million charge out of the equation, CROX would have lost a mere six cents per share. While these results are worse than those of a year ago, they managed to top Wall Street's expectations for a loss of 21 cents per share.

Continue reading Crocs loses less than expected -- time to celebrate!

Under Armour turns apparel into performance in the second quarter

Solid performance in the earnings spotlight from Under Armour (NYSE: UA), as the company reported a surprising profit of three cents per share. Under Armour's earnings topped the consensus estimate for a loss of two cents per share and matched the company's year-ago results. Quarterly revenue increased to $164.6 million from $156.7 million a year ago.

The results were driven by a 16.5% increase ($112 million) in clothing revenue, which compensated for an 18.4% drop ($37.5 million) in footwear from a year ago. Looking ahead, Under Armour forecast 2009 earnings between 80 and 82 cents per share, better than the consensus estimate for earnings of 79 cents per share. As far as revenue is concerned, the Maryland-based firm expects $810 million compared to $804.9 from the Street.

Continue reading Under Armour turns apparel into performance in the second quarter

Collective Brands sees earnings and sales decline, but beats expectations

Collective Brands (NYSE: PSS), a footwear retailer that competes with companies such as Wal-Mart (NYSE: WMT) and Kohl's (NYSE: KSS), issued Q1 results on Wednesday after the bell. The business earned 59 cents per diluted share. That represented a decline over last year's results which, on an adjusted basis, calculated out to 66 cents per share.

That's not the only disappointing news. You also have a sales decline, impacted by currency effects (of course), as well as the expiration of a license related to the Tommy Hilfiger brand. Also, same-store sales dipped by 4.8% on a reported basis, and 3.2% after the exclusion of currency translation. As can be seen, you can look at same-store sales any way you'd like, but in the end, they went down, and that is never healthy for a retailer. A retailer always wants to see rising comps.

Continue reading Collective Brands sees earnings and sales decline, but beats expectations

JockStocks: Does a recall reveal a chink in Under Armour's armor?

Earlier this week, Under Armour (NYSE: UA) issued what could be a very painful recall for both its customers and the company itself. The company voluntarily recalled more than 200,000 of its athletic cups on fears that they could break if hit -- which could then cause injury to the athlete. Last time I checked (and it has been years since I have had to use a "cup") these things were actually supposed to protect the most sensitive area of male athletes, right? If these things aren't doing their jobs, get them off the shelves. Millions of men will agree with me (I think). These cups were manufactured in China according to the U.S. Consumer Product Safety Commission and noted that UA received (brace yourselves men) "five reports of cups breaking, including an injury involving cuts and bruising." Yipes!

Continue reading JockStocks: Does a recall reveal a chink in Under Armour's armor?

DSW misses in fourth quarter

DSW (NYSE: DSW) issued a pretty short press release detailing its Q4 earnings on Wednesday. Can't blame management about that. There really wasn't much to say, other than the data did not look appealing.

The footwear business reported a loss of 17 cents per share. In the previous year's Q4, there was a profit of 2 cents per share (I'm sure DSW is looking on that time period with bitter nostalgia). Unfortunately, the market was looking for a loss of only 12 cents per share according to this.

Continue reading DSW misses in fourth quarter

Nike stomps estimates, but sales are another matter

Nike, Inc. (NYSE: NKE) issued its Q3 numbers on Wednesday, and they were impressive in that they beat the analysts by quite the wide margin. According to Trey Thoelcke's earnings preview, analysts were looking for the sneaker giant to do $0.79 per share. Well, on an adjusted basis, excluding an impairment effect related to the Umbro asset, Nike delivered $0.99 per share. That represents an 8% jump in the bottom line.

Continue reading Nike stomps estimates, but sales are another matter

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Last updated: February 11, 2012: 08:57 AM

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