Wednesday, January 7, 2015

Seeking Alpha: Summer Infant Looking To Transition Back To Growth

Infant products manufacturer Summer Infant (NASDAQ:SUMR) spent most of 2014 getting its house back in order. The company exited its low-margin licensing business, slashed its SKU count, restructured its product development process, as well as its sales approach, and reoriented the company around internally-driven sales and ROIC targets.

It seems premature to say "job done", but the company has definitely stabilized the business with a return to sales growth (high single-digit to low double-digit on an adjusted basis) and improving gross margins. Now it is time for management to show that it can gain share in important categories like monitors and strollers and establish a footprint in new retail channels. I'm bullish on management's plans and I believe that 2015 should see progress on internal growth initiatives. With a fair value target of almost $4 based on what I believe are relatively conservative projections, there is still credible upside to this consumer goods story.

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Summer Infant Looking To Transition Back To Growth

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