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Showing posts with label Collective Brands. Show all posts
Showing posts with label Collective Brands. Show all posts
Wednesday, July 11, 2012
Investopedia: A Small Miss Means Little for The Long Term At Wolverine
Starting around September of this year, the next couple of years at Wolverine (NYSE:WWW) could be very interesting. The billion dollar-plus acquisition of Collective Brands' (NYSE:PSS)
Performance and Lifestyle Group holds the promise of transforming the
company from a high-return/low-growth cash-farmer into a company that
produces both robust returns and solid growth. Against that backdrop, a
two-cent miss in quarterly earnings just doesn't seem like a big deal and this looks like a stock that could still be an attractive buy today.
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Wednesday, January 11, 2012
Investopedia: A Better Brown Shoe Is Worth A Lot More
Brown Shoe (NYSE:BWS), the third-largest footwear retailer in the country and a major wholesaler to other retailers like Wal-Mart (NYSE:WMT) and Kohl's (NYSE:KSS), has seemingly been in perpetual turnaround for the better part of a decade. Although the company still has much to prove to the Street and the stock is off its lows, sustained operational improvements could make this stock a real winner in the years to come. (For more, see Earning Forecasts: A Primer.)
A Two-Part Business
Many readers will be familiar with Brown Shoe through its retail system. Brown Shoe operates the third-largest chain of footwear stores (Famous Footwear) after Collective Brands' (NYSE:PSS), Payless ShoeSource and Foot Locker (NYSE:FL), as well as specialty stores like Naturalizer. Perhaps less familiar is the company's wholesale business - a business that supplies brands like Sam Edelman to stores like Nordstrom (NYSE:JWN) and Saks (NYSE:SKS).
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Tuesday, October 4, 2011
Investopedia: Wolverine Still A Winner
The footwear market has been mixed up for a while now and this quarter really has not been all that different. Struggling names like Brown Shoe (NYSE:BWS), Collective Brands (NYSE:PSS), and Skechers (NYSE:SKX) continue to have their issues, while companies like Nike (NYSE:NKE) and Wolverine (NYSE:WWW) continue to offer shoppers what they want even at higher price points.
Solid Third Quarter Performance
Wolverine had a bit of a problem last quarter when its outlook disappointed investors and they sold off the stock. As has been the case more often than not in this company's history, though, that conservatism was another set-up for an "under-promise, over-deliver" quarter.
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Solid Third Quarter Performance
Wolverine had a bit of a problem last quarter when its outlook disappointed investors and they sold off the stock. As has been the case more often than not in this company's history, though, that conservatism was another set-up for an "under-promise, over-deliver" quarter.
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Tuesday, August 30, 2011
Investopedia: Brown Shoe Needs More Execution, Less Excuses
I have been a fan of shoe retailer Brown Shoe (NYSE:BWS) for some time, having profitably owned it many years ago, but perhaps it's time to reevaluate that position. While many retailers are struggling in a difficult consumer spending environment, there are more worrisome issues between the lines. Brown Shoe is making mistakes that it should not be making and offering up fairly thin excuses in place of execution. Brown Shoe's problems are not unsolvable and the valuation is compelling, but shareholders have every right to demand more from this management team.
Another Poor Performance
This fiscal second quarter marks the company's third consecutive major miss with respect to analyst expectations. Revenue rose more than 7% in the quarter, but still came in slightly shy of the average analyst guess. The company's largest segment, Famous Footwear, saw sales drop almost 1%, while the wholesale business was up more than 24% and the small specialty segment rose about 1%.
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Thursday, July 14, 2011
Investopedia: Expectations Gnaw At Wolverine
Would the real footwear market please stand up? Athletic shoe companies like Nike (NYSE:NKE) and Adidas (OTCBB:ADDYY) have been quite strong, and so has fashion-oriented Steven Madden (Nasdaq:SHOO). And then there are the likes of Collective Brands (NYSE:PSS), Brown Shoe (NYSE:BWS) and Skechers (NYSE:SKX) with weak sales and even weaker stocks.
Wolverine (NYSE:WWW) is on the stronger end of the range, even if the Street was not falling over itself to reward the company for solid second quarter results. Then again, if conservatism is the biggest sin of Wolverine, long-term shareholders should not be bothered by the quarterly noise. (For related reading, see Strategies For Quarterly Earnings Season.)
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Wolverine (NYSE:WWW) is on the stronger end of the range, even if the Street was not falling over itself to reward the company for solid second quarter results. Then again, if conservatism is the biggest sin of Wolverine, long-term shareholders should not be bothered by the quarterly noise. (For related reading, see Strategies For Quarterly Earnings Season.)
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Monday, June 13, 2011
Investopedia: VF Corp Laces Up Timberland
I've been thinking (and writing) for a little while now that several footwear stocks just look too cheap relative to even modest growth expectations. Apparently VF Corp (NYSE:VFC), one of the largest apparel makers in the world, agrees. Before the open of trading, VF Corp announced that it was acquiring outdoor footwear maker Timberland (NYSE:TBL) in a cash deal worth roughly $2 billion.
For VF Corp, this is an interesting expansion into new territory. For Timberland shareholders, it is a bittersweet end for a company that has not only been run well, but has frequently been lauded by the ethical investing crowd for its policies and philosophies. There's even something here for investors with no direct stake in either company - perhaps it is at least partial validation that footwear companies have traded too low in this latest market pullback.
The Deal to Come
Assuming that all of the necessary "i's" are dotted and "t's" crossed, VF Corp will acquire Timberland for $43 per share in cash. That represents a premium of 43% to Friday's closing price, a little less than $3 from the all-time high for the stock (set just back in late April, prior to a major fall due to an earning miss), and pretty much the full value for the shares.
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For VF Corp, this is an interesting expansion into new territory. For Timberland shareholders, it is a bittersweet end for a company that has not only been run well, but has frequently been lauded by the ethical investing crowd for its policies and philosophies. There's even something here for investors with no direct stake in either company - perhaps it is at least partial validation that footwear companies have traded too low in this latest market pullback.
The Deal to Come
Assuming that all of the necessary "i's" are dotted and "t's" crossed, VF Corp will acquire Timberland for $43 per share in cash. That represents a premium of 43% to Friday's closing price, a little less than $3 from the all-time high for the stock (set just back in late April, prior to a major fall due to an earning miss), and pretty much the full value for the shares.
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Thursday, May 26, 2011
Investopedia: Collective Brands Might Be Worth The Wait
In most respects, these are pretty good days to be in value-oriented retail. Companies like Family Dollar (NYSE:FDO), Ross Stores (Nasdaq:ROSS) and TJX (NYSE:TJX) all are seeing their stocks trade near 52-week highs, and analyst estimates have been an upward match.
That stands in pretty sharp comparison to the shoe sector, where leading value-oriented companies like Brown Shoe (NYSE:BWS) and Collective Brands (NYSE:PSS) (owner of Payless and Stride Rite) are struggling. With Collective Brands reporting a very disappointing first quarter, it is worth asking whether there is something fundamentally different about the shoe business, or whether the absence of institutional demand for these stocks makes for a buying opportunity for value investors.
A Tough Quarter for Several Reasons
Collective Brands announced that revenue for the fiscal first quarter fell a bit more than 1%, which is not so bad until it's considered that the company missed the average estimate by about 5%. Although the company's very profitable PLG Wholesale business saw revenue rise almost 23%, overall company results were hurt by a 9% drop in domestic Payless revenue (which was fueled by a greater than 8% drop in same-store comps). International sales were also weak, as poor performance in Canada pushed the Payless international revenue down by almost 3%.
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That stands in pretty sharp comparison to the shoe sector, where leading value-oriented companies like Brown Shoe (NYSE:BWS) and Collective Brands (NYSE:PSS) (owner of Payless and Stride Rite) are struggling. With Collective Brands reporting a very disappointing first quarter, it is worth asking whether there is something fundamentally different about the shoe business, or whether the absence of institutional demand for these stocks makes for a buying opportunity for value investors.
A Tough Quarter for Several Reasons
Collective Brands announced that revenue for the fiscal first quarter fell a bit more than 1%, which is not so bad until it's considered that the company missed the average estimate by about 5%. Although the company's very profitable PLG Wholesale business saw revenue rise almost 23%, overall company results were hurt by a 9% drop in domestic Payless revenue (which was fueled by a greater than 8% drop in same-store comps). International sales were also weak, as poor performance in Canada pushed the Payless international revenue down by almost 3%.
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Tuesday, March 22, 2011
Investopedia: The Best And Worst Of Times In Shoes
Shoes are a weird business. You never can tell what is going to resonate with the public at any particular point in time - after all, people have fallen over themselves trying to get a hold of plastic shoes, shoes with little clear windows in the heel and shoes that allegedly build muscle. At the same time, it is a ridiculously competitive industry with price points all over the map.
With that backdrop, perhaps it should not be so surprising that the performance of shoe companies and retailers is also all over the map. Companies like DSW (NYSE:DSW) and Timberland (NYSE:TBL) have leveraged solid financial momentum into good stock performance, while the stocks of more bargain-oriented retailers like Collective Brands (NYSE:PSS) and Brown Shoe (NYSE:BWS) have had some struggles.
Brown Shoe, DSW Not Looking So Green
Brown Shoe has been all over the map for years, and Tuesday's poor earnings report will not help. Not only did sales growth of 7% miss estimates, but the margins were a mess. Overall gross margin fell more than 200 basis points, due solely to the wholesale business. Wholesale margins fell 800 basis points because of sourcing problems and order fulfillment issues tied to a new IT system. All in all, the company missed its EPS target by a pretty meaningful amount and the market was merciless to the shares.
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With that backdrop, perhaps it should not be so surprising that the performance of shoe companies and retailers is also all over the map. Companies like DSW (NYSE:DSW) and Timberland (NYSE:TBL) have leveraged solid financial momentum into good stock performance, while the stocks of more bargain-oriented retailers like Collective Brands (NYSE:PSS) and Brown Shoe (NYSE:BWS) have had some struggles.
Brown Shoe, DSW Not Looking So Green
Brown Shoe has been all over the map for years, and Tuesday's poor earnings report will not help. Not only did sales growth of 7% miss estimates, but the margins were a mess. Overall gross margin fell more than 200 basis points, due solely to the wholesale business. Wholesale margins fell 800 basis points because of sourcing problems and order fulfillment issues tied to a new IT system. All in all, the company missed its EPS target by a pretty meaningful amount and the market was merciless to the shares.
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Monday, December 6, 2010
Investors Willing To Pay More For Payless
Collective Brands (NYSE:PSS) had a lot of the characteristics of a potential winner. The company has a strong market position in its niche, a low valuation and realistic levers to pull for long-term growth. All that the stock needed was a solid quarter to get investors confident again ... and voila, the company did just that with its third quarter earnings report.
An Okay Quarter And Low Expectations
Of course, a "solid quarter" is a relative concept. Collective Brands' third quarter results were not all that strong in and of themselves, but they were a fair bit better than analysts were expecting. Total sales rose almost 2%, while comparable store sales were down 2.7%. That is admittedly not strong, but still better than some Wall Street expectations.
Within those numbers, the domestic Payless business was clearly soft; revenue was down 5% on a 4.6% decrease in comps. Payless international was stronger, though, as sales were up 8%.
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An Okay Quarter And Low Expectations
Of course, a "solid quarter" is a relative concept. Collective Brands' third quarter results were not all that strong in and of themselves, but they were a fair bit better than analysts were expecting. Total sales rose almost 2%, while comparable store sales were down 2.7%. That is admittedly not strong, but still better than some Wall Street expectations.
Within those numbers, the domestic Payless business was clearly soft; revenue was down 5% on a 4.6% decrease in comps. Payless international was stronger, though, as sales were up 8%.
Please follow this link for the complete article:
http://stocks.investopedia.
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