A retailer's work is never done. Even if a company has the store
footprint it needs and has its brand identity/merchandising dialed in,
there's often the need to refresh the stores, upgrade logistics systems,
and so on. While all of that goes on, there's still the matter of
weather, fashion, and competition-related volatility in comp store
growth to consider.
American Eagle (NYSE:AEO)
looks like it has a little more work to do before really getting going
again. The company is in better shape than just a couple of years ago
(when the stock traded in the low teens and “Can AEO ever be relevant
again?” stories were more prevalent), but sizable cash investments and
some sluggishness in sales could leave the stocky chopping around a bit
before resuming a more positive trajectory.
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Showing posts with label Pacific Sunwear. Show all posts
Showing posts with label Pacific Sunwear. Show all posts
Thursday, May 23, 2013
Friday, March 2, 2012
Investopedia: American Eagle Outfitters Needs To Tend To Its Nest
Teen retailing is a fickle business where nothing lasts forever. American Eagle Outfitters (NYSE:AEO) knows this as well as any company, as the history of this name has included multiple periods of strong comps growth followed by multi-year funks and eventual recovery. As the company seems to be transitioning from funk to recovery, some key questions for investors relate to whether management can maintain the sales momentum, and whether it can couple that with solid margin improvements.
Coming Out Of The Funk, But At What Cost?
American Eagle certainly had a rough go of it lately, as the company misfired on its product assortments and lost momentum to other teen retail rivals like Aeropostale (NYSE:ARO), rue21 (Nasdaq:RUE), Buckle (NYSE:BKE) and most recently Hennes & Mauritz. Management didn't just surrender the field, though, and results have been improving steady - from negative 10% comps in 2008 to negative 4% in 2009, negative 1% in 2010 and recent positive comps.
Continue reading here:
http://stocks.investopedia.
Monday, May 2, 2011
Investopedia: Wooly And T-Dawg Go Gucci
Somehow it just does not seem too likely that Gucci's core customer base overlaps much with folks who call themselves "Wooly" and "T-Dawg", but France's PPR, which owns the esteemed Gucci label, is going to give it a go anyway. On Monday morning, the French holding company announced that it would be acquiring U.S. boardwear apparel maker Volcom (Nasdaq:VLCM), which was founded by the aforementioned Wooly and T-Dawg in 1991. (For background reading, see Using Consumer Spending As A Market Indicator.)
The Terms of the Deal
PPR is paying almost $608 million for the smaller clothing company, giving Volcom shareholders $24.50 a share in cash, or a 24% premium to Friday's close. That puts a valuation on Volcom shares of about 1.5x trailing sales and about 10.5x trailing EBITDA - not exactly premium pricing for a once-hot stock.
Read the full piece here:
http://stocks.investopedia.
The Terms of the Deal
PPR is paying almost $608 million for the smaller clothing company, giving Volcom shareholders $24.50 a share in cash, or a 24% premium to Friday's close. That puts a valuation on Volcom shares of about 1.5x trailing sales and about 10.5x trailing EBITDA - not exactly premium pricing for a once-hot stock.
Still, it is difficult to value a company like Volcom on a relative basis. Billabong is publicly listed in Australia and trades at an even lower valuation, Quicksilver (NYSE:ZQK) is struggling, and other once-popular boardwear companies like Vans and Ocean Pacific faded years ago and were acquired by the likes of VF Corp (NYSE:VFC) and Iconix (Nasdaq:ICON).
Read the full piece here:
http://stocks.investopedia.
Friday, August 27, 2010
Angst Among Teen Retailers
Maybe America's malls are not quite as empty yet as the one in the Romero classic Dawn Of The Dead, but investors can definitely hear some moaning from retailers. Wednesday's earnings from American Eagle Outfitters (NYSE:AEO) will not stand out as being all that exceptional, as most youth-oriented retailers saw a poor second quarter and have little optimism about the back-to-school season.
The Quarter That Was
American Eagle reported that total sales rose 1%, while comparable store sales fell 1%. Unfortunately, there was not much to mitigate this performance. The company spent the quarter shutting down the disappointing MARTIN + OSA stores (so much for its attempt to move out of the core teen market), and overall online sales were down 9%. Making matters worse, that poor sales performance would have been even worse without some aggressive markdowns, and those markdowns pushed gross profit down 6%.
To read the entire article, please click on the link:
http://stocks.investopedia.
The Quarter That Was
American Eagle reported that total sales rose 1%, while comparable store sales fell 1%. Unfortunately, there was not much to mitigate this performance. The company spent the quarter shutting down the disappointing MARTIN + OSA stores (so much for its attempt to move out of the core teen market), and overall online sales were down 9%. Making matters worse, that poor sales performance would have been even worse without some aggressive markdowns, and those markdowns pushed gross profit down 6%.
To read the entire article, please click on the link:
http://stocks.investopedia.
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