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Home Depot Earnings Preview: Signs of Recovery?

Atlanta-based big-box retailer Home Depot Inc. (HD) is scheduled to discuss its fourth-quarter and fiscal year financial results in a conference call Tuesday, Feb. 23, at 9:00 AM (ET). Catch the live webcast of the call (later archived) at the company's website.

During the three months that ended in January, Home Depot announced an upgrade of its self-checkout system and an agreement with Martha Stewart Living Omnimedia (MSO), as well as declared a quarterly dividend. Analysts surveyed by Thomson Reuters expect the world's largest home improvement retailer to report fourth-quarter earnings of $0.17 per share, down two cents year over year. Revenue for the period is expected to have fallen 3.7% to $14.1 billion.

Continue reading Home Depot Earnings Preview: Signs of Recovery?

Earnings Highlights: Campbell, Dell, Goodyear, JCPenney, Merck, Playboy ...

Here are some highlights from this past week's earnings coverage on BloggingStocks:

  • Abercrombie & Fitch Co. (ANF) lower Q4 earnings topped estimates and same-store sales also declined.
  • Campbell Soup Co. (CPB) reaffirmed its earnings outlook but lowered its revenue forecast for the full year.
  • Daimler AG (DAI) provided guidance for the year that included slashing its dividend, sending shares lower.
  • Dell Inc. (DELL) lower Q4 earnings beat estimates by a penny but it didn't offer guidance, sending shares lower.
  • Goodyear Tire & Rubber Co. (GT) easily topped Q4 earnings estimates and revenue increased as well.

Continue reading Earnings Highlights: Campbell, Dell, Goodyear, JCPenney, Merck, Playboy ...

The week in preview: More retail earnings: Gap, Home Depot, Sears, Target ...

On the heels of last week's better-than-expected earnings results from retailers Abercrombie & Fitch Co. (ANF), Kohl's Corp. (KSS), Macy's Inc. (M), Urban Outfitters Inc. (URBN) and Wal-Mart Stores Inc. (WMT) -- as well as disappointing numbers from Blockbuster Inc. (BBI) and JCPenney Co. Inc. (JCP) -- the coming week will bring results from more shopping- and strip-mall favorites.

TJX Companies Inc. (TJX), which operates T.J. Maxx and Marshalls stores in the U.S., settled a class action, announced share buybacks and raised its guidance in the third quarter. For the three months that ended in October, analysts surveyed by Thomson Reuters expect TJX to report earnings of $0.80 per share, up from $0.57 in the same period of last year. Revenue is expected to total $5.3 billion, or 10.2% higher than a year ago. So far, the full-year forecast is for a profit of $2.59 per share (+22.3%) on $20.0 billion (+5.5%) in sales.

Continue reading The week in preview: More retail earnings: Gap, Home Depot, Sears, Target ...

Who profited from Bear Stearns' collapse? One insider did, and got away with it

So, I was flipping through some articles in Rolling Stone, when I found a very interesting economic story - yes, in Rolling Stone. The article, "Wall Street's Naked Swindle," takes a look at what happened in the options pits leading up to the death of Bear Stearns and Lehman Brothers. According to the article, an unknown option buyer made "one of the craziest bets Wall Street has ever seen," by shorting Bear Stearns. The unknown trader felt that Bear Stearns would lose "more than half" of its value in nine days or less, a bet that one financial analyst likened to buying 1.7 million lottery tickets.

What is crazy is that this bet paid off, leading to only one conclusion: insider trading (cue dramatic music). When Bear Stearns dropped from roughly $63 to $2 per share on March 17th (just six days later), the person purchasing the options made roughly $270 million. Senator Chris Dodd from the Senate Banking Committee thought that something wasn't on the up and up with this trade, and the Securities and Exchange Commission (SEC) promised it would look into the trade. Of course, nothing has happened since.

Continue reading Who profited from Bear Stearns' collapse? One insider did, and got away with it

Martha Stewart is still money

If I was worried about the fate of Martha Stewart's flagship magazine, Martha Stewart Living, perhaps my concerns were unfounded. The statement from Martha Stewart Living Omnimedia (NYSE: MSO) could not be more bold, more unfailingly optimistic (like Martha herself): Martha is getting a raise.

It's a big one, from her current CEO salary of $900,000 a year to at least $2 million annually for the next three years, plus a hefty "retention incentive" of $3 million today.

But where was she going? you might ask. After all, the company is her very self, media-opolied. As far as I can tell, she was going nowhere, but without her there is little left. Martha's aspirational persona has made an indelible mark on our culture, one that has no danger of falling victim to our economic downturn. She represents the soul of the DIY ethos; not for nothing do people say of any well-executed craft, especially one involving vintage pieces found at a thrift store, "that's so Martha!"

Continue reading Martha Stewart is still money

The week in preview: Eye on Marvel, KBR, First Solar, Deckers and more

Analysts surveyed by Thomson Reuters expected the parade of earnings declines to continue into the final week of February, with Martha Stewart Living Omnimedia Inc. (NYSE: MSO), Nordstrom Inc. (NYSE: JWN), Home Depot Inc. (NYSE: HD), Wynn Resorts Ltd. (NASDAQ: WYNN), Macy's Inc. (NYSE: M), DreamWorks Animation SKG Inc. (NYSE: DWA), Limited Brands Inc. (NYSE: LTD), Target Corp. (NYSE: TGT), Royal Bank Of Canada (NYSE: RY), Del Monte Foods Co. (NASDAQ: DLM), Kohl's Corp. (NYSE: KSS), Washington Post Co. (NYSE: WPO), Dell Inc. (NASDAQ: DELL), Gap Inc. (NYSE: GPS), Campbell Soup Co. (NYSE: CPB), RadioShack Corp. (NYSE: RSH), and H.J. Heinz Co. (NYSE: HNZ) all expected to post lower earnings for the most recent quarter. Office Depot Inc. (NYSE: ODP), Saks Inc. (NYSE: SKS), and Cooper Tire & Rubber Co. (NYSE: CTB) are expect to have swung to a loss.

Continue reading The week in preview: Eye on Marvel, KBR, First Solar, Deckers and more

Could Martha Stewart Living mag be troubled?

In a previous post about the medium I call "periodicals printed on paper," I wrote that the universe of magazines and newspapers was being winnowed, and only the very best would survive. As my mind's eye darted around a mental image of a newsstand, a few periodicals stood out as "best"; Martha Stewart Living chief among them. MSL has not just created a loyal following and niche audience; it is a symbol of an entire subset of the population, an aspirational icon who is, while not exactly an ordinary person herself, creates a mostly achievable lifestyle. Her magazine will always represent the soul of the DIY culture; not for nothing do people say of any well-executed craft, especially one involving vintage pieces found at a thrift store, "that's so Martha!"

Continue reading Could Martha Stewart Living mag be troubled?

Financial Felons: Where are they now and is there a next generation coming?

We recently presented a look at some of the most notorious financial felons of contemporary times.

Since then, news has included the indictment of Mark Cuban for insider trading in a case that is somewhat reminiscent of Martha Stewart's case. According to the SEC, the billionaire entrepreneur asked his broker to sell all his shares of Mamma.com after the company's CEO confidentially told him of an impending stock offering that would dilute the value of all existing shares. By selling before the information became public, Cuban is said to have sidestepped losses of more than $750,000. Cuban insists, though, that no agreement existed to keep the information confidential.

And then there was the indictment in Texas of Vice President Dick Cheney, along with former U.S. Attorney General Alberto Gonzales and others. There seems to be a conflict of interest between the vice president's influence on the federal agency that oversees federal immigration detention centers and his substantial holdings in Vanguard Group, which invests in private prison companies. But does the lame-duck county district attorney, who was a no-show in court, have the authority to bring charges against federal officials with regard to federally run institutions?

Continue reading Financial Felons: Where are they now and is there a next generation coming?

Financial Felons: Martha Stewart

This post is part of a feature in which we wonder whatever happened to some notorious financial felons. See all 17.

I sometimes get the impression that people think I'm joking when I say I love Martha Stewart. I get it; I don't look like I have much in common with Martha. My apartment is cluttered, my cleaning habits are slapdash at best, and my hair is generally unkempt. I have at least a week's worth of random garbage traveling with me in the Hyundai at all times -- and I often get the distinct impression that people from New England are looking down on me.

Despite our differences, Martha is a personal hero of mine. Flipping through her magazine, Martha Stewart Living, is not unlike paging through a National Geographic. It's a glossy, impeccably photographed glimpse into an exotic world that I can only hope one day to visit. If the July 2007 issue can be believed, Martha is the type of woman who, on a whim, jaunts out to East Hampton for a weekend of kayaking and antiquing. In between horseback rides and hikes, she just might whip up some pasta with salted pressed fish roe, or perhaps a nice avocado gelato. Can you imagine?

So you can appreciate my shock upon discovering that Martha, this creature of uncommon refinement, might also be a common white-collar criminal. On December 27, 2001, Stewart dumped 3,928 shares of ImClone Systems (NASDAQ: IMCL) through her broker, Peter Bacanovic of Merrill Lynch. Martha -- the CEO herself of an eponymous multi-million-dollar media empire, Martha Stewart Living Omnimedia (NYSE: MSO) -- raked in about $288,000 from the sale. The next day, after the market closed, ImClone announced that its cancer drug Erbitux had been rejected by the Food & Drug Administration. It was an explosive bit of news that sent ImClone shares plunging.

Continue reading Financial Felons: Martha Stewart

Martha Stewart does have a sense of humor!

Martha Stewart's daughter Alexis and Jennifer Koppelman Hutt, co-hosts of a show on Sirius Satellite Radio, are teaming up for a new television parody of vintage Martha Stewart Living episodes. The title? Whatever, Martha!

Surprisingly, the show has the blessing of Martha Stewart, who is not normally known as a barrel full of laughs. She told The New York Times that "They promised not to be mean, and I had to trust them. I'm not going to have a heart attack."

The half-hour show, set to debut on Fine Living on September 16th, will feature old clips from Ms. Stewart's show alongside sarcastic commentary from her daughter and Ms. Hutt. There are no clips available online but it sounds similar to ESPN Classic's Cheap Seats.

It's nice to see that Martha Stewart has a sense of humor. Given that shares of Martha Stewart Living Omnimedia (NYSE: MSO) have gone from $20 to $8 in a little more than a year and a half, she will need it. The debut of the new show is symptomatic of the problems the company is facing: Stewart went from an icon to a cliche, and now she completes the cycle by becoming a joke.

With the recent resignation of its CEO following the completion of the Emeril acquisition, this is a company in turmoil. Given its lackluster ability to generate profits during its prime, it seems like a stock worth avoiding.

Martha Stewart goes to Wal-Mart

Martha Stewart Living Omnimedia's (NYSE: MSO) recent announcement that its crafts line would be debuting in Wal-Mart Stores, Inc. (NYSE: WMT) stores nationally sent MSO up more than 5% at first, but the stock has since given all that back and then some: the stock is down nearly 10% from where it was before the announcement.
The company needs to replace the guaranteed licensing fees from K-Mart that are in the process of phasing out, and revenue from that business is likely to plummet when the guarantee declines from $65 million this year to around $20 million next year.

But Wal-Mart? Haven't their been entire books written on how tough it is to make money selling to Wal-Mart? It's easy for me to understand Wall Street's skepticism about this deal, and there have been a lot of uninspiring developments for the company in recent months: first the company paid $45 million for the Emeril empire, what was supposed to be company transforming acquisition. Then a few months later, CEO Susan Lyne resigned abruptly -- which doesn't speak well for the new strategy.

Maybe the Wal-Mart deal will work out splendidly -- but the company appears to be all over the place.

Martha Stewart Living Omnimedia CEO resigns

Bad news out of Martha Stewart Living Omnimedia (NASDAQ: MSO) today: CEO Susan Lyne has stepped down after four years as the company's CEO. President of Media Wenda Harris Millard and President of Merchandising Robin Marino will become co-CEOs.

Oh, how quickly things change. Back in April, Martha Stewart Living announced that it was acquiring the Emeril brand for $50 million, with an optimistic Lyne saying, "This acquisition is strategically important to our company as we continue to expand and diversify our business and represents a significant opportunity for us going forward." The company said it expected the acquisition to add $8 million of EBITDA in its first year of operation. Now Lyne is gone without explanation, and the press release didn't even mention the "strategically important" Emeril deal, which has a value of more than 10% of the company's market cap.

Continue reading Martha Stewart Living Omnimedia CEO resigns

Macy's Q1 beats analysts, but don't expect me to buy the stock

Retailer Macy's (NYSE: M) first fiscal quarter wasn't that bad, at least in terms of the analyst game. The company, which competes with mall colleagues such as J.C. Penney (NYSE: JCP) and Sears (NASDAQ: SHLD), reported net income of 2 cents per diluted share from continuing operations. The denizens of Wall Street thought the company would lose 2 cents, so management came ahead in this regard by four pennies. Bravo!

However, does this news excite me? Not necessarily. Macy's needs a little help in its sales department. First, the overall top line declined almost 3%, coming in at $5.7 billion. Second, and perhaps even more telling, same-store sales were weak during the quarter, decreasing by 2.6%. And then there's the issue of cash flow. Operational cash flow from continuing operations was excellent compared with last year's quarter since $21 million was generated this time around as opposed to $370 million being used last time around. Nevertheless, when you take into account capital spending, no free cash flow was left over in the first quarter. And cash has been decreasing on the balance sheet. Oh, and gross margin went down, too.

I wasn't too taken by Macy's current earnings report, and I'm not putting the company on my list of investment ideas right now, even though the stock closed up yesterday on the news (heck, the company didn't repurchase any shares last quarter and stated that it didn't see any more share repurchases coming for the rest of the year, so apparently the stock isn't on management's ideas list, either). I think there might be better retail investments out there, such as Wal-Mart (NYSE: WMT) or Target (NYSE: TGT). Yes, the retailer may have strong associations with Donald Trump and Martha Stewart, but I will not be blinded by such celebrity value.

Disclosure: I don't own shares in any company mentioned here; positions can change at any time.

Martha Stewart Living Omnimedia set to buy Emeril empire

Last month, I reported that Martha Stewart Living Omnimedia (NYSE: MSO) was actively seeking an acquisition to diversify beyond its core Martha Stewart brand.

Now the company has found what it hopes is it's missing piece, and is set to acquire superstar chef Emeril Lagasse's [subscription required] media and licensing empire for $45 million in cash and $5 million in stock, according to the Wall Street Journal.

The purchase price will include the rights to Emeril's television programs, syndicated episodes of the "Emeril Live" show on the Food Network, cookbooks and Emeril's websites, and licensing deals from All-Clad cookware, Wüsthof cutlery, Wedgwood tableware and T-fal appliances. The acquisition also includes Emeril-branded spices, marinades, coffee, Bam! B-Q sauce and other food products, according to the Journal. Emeril's restaurants and corporate office are not part of the deal.

It seems likely that the market will react positively to this development, but I wouldn't be buying here. Martha Stewart Living Omnimedia hasn't been able to make much money from the Martha Stewart brand and adding another brand to a failing company hardly seems like a recipe for success.

Can Martha Stewart Living Omnimedia be saved?

With its stock sitting in a toilet that would make the housekeeping goddess cringe, Martha Stewart Living Omnimedia (NYSE: MSO) is looking for something to boost its operations.

Fortune reports it has learned that the company "has held recent talks with two prominent tastemakers, the fashion designer Cynthia Rowley and Jonathan Adler, known for his home décor, with the aim of building multifaceted brands around these personalities that span television, publishing and the internet."

The talks have reportedly broken off, but CEO Susan Lyne has said that she is on the prowl for acquisitions. Acquisitions have a bad habit of failing to generate value for the acquirer, and Fortune notes that "The pressure to do a deal will intensify this year, as MSO prepares to take a hit on several fronts." And therein lies the problem.

The company has historically been unable to generate a profit, and that's not going to get any better in the near future. An acquisition driven by what amounts to desperation is unlikely to change that. And signing a big star will cost a lot money, and the value of that star's brand will tend to aggregate to them, not MSO -- that's the nature of licensing deals.

Bottom line: If you want to buy shares of MSO, it should be because you're bullish on the future of the company as it is now, not because you're hoping that a management team that has failed to generate value can make a killer acquisition that will restore the company to its once high-flying status.

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Last updated: February 12, 2012: 01:46 AM

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