Discount retailer Gordmans Stores (GMAN)
has been a falling knife since the fall of 2013, as the company has
exacerbated a weak underlying retailing environment with poor
merchandising decisions that have hit same-store sales hard and
depressed margins. Although Gordmans' results weren't out of line with
expectations for the quarter, they were still weak and the company
announced that the CEO had elected to retire.
Gordmans Stores may
benefit from a new vision or voice at the top, as the company's robust
store growth of recent years is not producing compelling comp-growth.
The good news here is that even in a tough quarter the company was still
profitable and it does not take particularly aggressive model
assumptions to suggest value in the shares. This is a speculative call,
and the sell-side has slashed its price targets by almost half in the
last four months, but simply stabilizing the comps could a make a
significant difference.
Follow this link to the full article:
Gordmans Stores' Merchandising Problems Linger
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