Investopedia: Canadian Dilution And Sluggish U.S. Shopping Bring Target A Little Wide Of The Mark

When Wal-Mart (NYSE:WMT), Target (NYSE:TGT), and Costco (Nasdaq:COST) all see relatively uninspiring same-store sales growth trends, I think it's safe to say the U.S. retail market is not in the best of health. Although Target continues to take steps that should improve the company's long-term competitiveness and growth profile, Wall Street is generally very much focused on the now and underperformance creates some challenges for the shares.

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Investopedia: Consumer Spending Looking Bleaker For Wal-Mart

It seems like hopes for a strong back-to-school season (not to mention a more general spending recovery overall) are fading away for Wal-Mart (NYSE: WMT). Weak consumer spending may not be a huge surprise this quarter, but I found it interesting that the company also lost some operating leverage. In any case, while Wal-Mart really isn't the sort of stock to buy or sell on the basis of one quarter, but I find the valuation and potential here to be pretty underwhelming on the whole.

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Investopedia: Wal-Mart Uses Rigorous Cost Control To Offset Weaker Sales

It's no secret that a meaningful percentage of the country's retail business goes on under the roof of Wal-Mart's (NYSE:WMT) stores. To that end, when consumers are feeling pressure (particularly those on the less affluent side of the ledger) it shows up in Wal-Mart's numbers. This gigantic retailer didn't have a bad fiscal first quarter, and it sounds like the fiscal year ahead should get better, but once again Wal-Mart is having to turn to operating synergies to wring out some growth. This stock's status as a proxy for the U.S. retailing sector makes talk of value somewhat moot, but these shares don't look notably cheap on a long-term basis.

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Seeking Alpha: Gordmans Stores Looking To Carve Out A Niche In The Cutthroat Retail World

I go back a long way with Gordmans Stores (GMAN). When I was a little kid, the local Richman Gordman had a kids play area with these huge (to a 4-yr-old) fiberglass animals that you could climb on/through, slide down, and otherwise amuse yourself with. The play area was always pretty full, and I think Richman Gordman was locally popular if for no other reason than mothers could do some shopping (these were the days when you actually could leave kids unattended to play) while their shrieking hellions amused themselves without bothering other shoppers.

Fast forward all too many years, and it's worth asking if the U.S. retail scene really needs yet another shopping destination. In the case of Gordmans, I think there could be something here - the company is trying to combine discount store pricing with a specialty store "feel," and shoppers have proven over and over again that they love that combination. With a good balance sheet, an economically attractive store model, and a solid expansion plan, these shares may just be a discount themselves today.

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Gordmans Stores Looking To Carve Out A Niche In The Cutthroat Retail World

Investopedia: VeriFone Loses The Tailwind Again

Something is going on with VeriFone (NYSE:PAY), and it's not good. Not only is the stock well off its highs, but whatever momentum that the company had gained since its fiscal third quarter miss is likely to evaporate with another miss. Although I don't think VeriFone is a fundamentally flawed business, it may well be transitioning away from that phase of its corporate life where investors look past almost any bad news in the pursuit of growth.

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Investopedia: A Few Hiccups Aren't Going To Derail Costco

As one of the strongest retailers in the United States (not to mentioned one of the best-liked), Costco (Nasdaq:COST) already has a lot going for it. Not only is Costco already an exceptionally efficient retailer in terms of generating sales per square foot, the company still has ample organic expansion potential in the U.S. and abroad. The down-side to this story is not too surprising - Costco's success and popularity are well-known among investors, and the stock doesn't offer a compelling bargain relative to expected above-average growth rates.

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Investopedia: Kroger Makes The Best Of Tough Environment

For those who think supermarket operators can't produce worthwhile capital gains, Kroger's (NYSE:KR) roughly 18% move up over the past three months is a good counter-argument. What's more, while food retailing continues to be a tough business, made even more difficult by price competition from entities like Walmart (NYSE:WMT) and dollar stores and economic pressures on shoppers, Kroger continues to execute at a high level. Although this stock still does not look all that cheap on a cash flow basis, investors should never be quick to abandon well-run companies.

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Investopedia: Wal-Mart's "Meh" Quarter Doesn't Excite Investors

This has been a better year for Walmart's (NYSE:WMT) stock than many of its customers, as the stock has more than doubled the return of the S&P 500. While Walmart did have a solid back-to-school season and is as leveraged as anybody to improving consumer conditions (and confidence), the sluggish comp numbers suggest that the company is not completely out of the woods. 

 

Decent, but Not Great, Third Quarter Numbers 

Walmart's earnings always get a lot of attention, given its enormous position within the United States retail sector. To that end, Walmart's numbers may be a good reminder that, while the worst may be over, that's not the same thing as saying that the good times are back.

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Financial Edge: The Risky Business Of Courting LGBT Customers

Whether it's due to the rise of social media and the phenomenon of the immediate sharing of views and opinions or just an intensification of the "culture wars" that seem to occur everywhere throughout history, where we eat and shop now has more political and social overtones than ever before. In particular, companies are finding that they must be very careful in how they attempt to position themselves towards Lesbian, Gay, Bisexual and Transgendered (LGBT) customers.

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Investopedia: SuperValu May Be Too Far Gone To Save

Food retailing has never been an easy business, particularly since large discounters like Walmart (NYSE:WMT) and Target (NYSE:TGT) got into the game in a big way. While there has been room for companies with differentiated models (often built around premium products or intense merchandising skill), SuperValu (NYSE:SVU) has been struggling to differentiate itself and compete effectively in the mainline supermarket space. With this major earnings disappointment in hand, it's worth asking if even deep-value turnaround investors ought to bother with this name.

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Investopedia: Walgreen Hopes That It Can Buy Growth

Walgreen (NYSE:WAG) management cannot be faulted for being passive in response to the challenges it is facing in producing growth. With an arguably saturated U.S. market, ongoing challenges from the likes of Walmart (NYSE:WMT) and Target (NYSE:TGT), further penetration from mail-order pharmacies and its ongoing dispute with Express Scripts (Nasdaq:ESRX), the company had to do something. The question remains, though, whether paying up for KKR's British-based Alliance Boots is the long-term solution to what ails Walgreen.

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Investopedia: Costco Living Up To Some High Expectations

One of the problems of having had a lot of success is that it can put expectations at unreasonable levels. That would certainly seem to be a risk for Costco (Nasdaq:COST), as analysts, journalists and commentators have often heaped praise on this warehouse format retailer. While the company may well find it harder to squeeze more efficiencies from an already highly efficient system, the international growth opportunity alone makes this a name worth watching.

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Investopedia: Have Misdeeds Opened A Window For Walmart?

A company like Walmart (NYSE:WMT) is not going to get cheap all that often. The company is widely-held, well-known and generally appreciated as a play both on U.S. retail in general and lower-income retail in particular. Better still, Walmart is a virtual legend in terms of using logistics and competitive sourcing to compete on price, and posts excellent returns on invested capital.

As of now, though, it doesn't look as though the bribery issue in Mexico has created enough worry among investors to push these shares to the point of serious undervaluation. Walmart remains a worthwhile hold, but no particular bargain today.

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Investopedia: Target Needs More Than "Upscale Discounting"

Target (NYSE:TGT) has built a relatively rare business - a discount store format that people don't mind admitting that they patronize. The company may be well past the former glories of the "Tar-zhay" days, and rivals like Kohl's (NYSE:KSS) and Trader Joe's are following similar paths in the multi-line retail and food retail formats, but it still produces reasonable returns. The question for investors, though, is whether management has that spirit of "prudent aggression" that will be necessary to drive the next leg of growth.

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Investopedia: Wal-Mart Rolls On

A company as immense as Wal-Mart (NYSE:WMT) is not going to show a great deal of turbulence from quarter to quarter, but there's nothing wrong with steady growth and stepwise execution of a solid business plan. To that end, Wal-Mart shareholders have little to worry about, as management continues to balance an overseas growth strategy with a domestic operating efficiency plan. Although Wal-Mart is not especially cheap, it likely remains a reasonably good conservative play on consumer spending in the United States, tinged with some international growth.


Basically Solid Fiscal Fourth Quarter Results
Wal-Mart didn't deliver too many surprises in its fiscal fourth quarter, and investors basically have to go to the right of the decimal points to find much deviation from expectation.


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Investopedia: Helen Of Troy Plenty Bold, But What About Beautiful?

You have to give credit where it's due and Helen Of Troy (Nasdaq:HELE) management (which means CEO and founder Gerald Rubin) is absolutely willing to take chances to grow this company. Once a licensor of low-price/low-prestige personal care brands, and a maker of fairly low-end consumer care electrics, such as curling irons, Helen of Troy has increasingly built itself into a legitimate player in a variety of personal and houseware products. Although the company's rising debt is likely to magnify what has been a very volatile company to begin with, there looks to be value here for risk-tolerant investors.

A Pretty Good Third Quarter 

Helen Of Troy beat expectations for the fiscal third quarter, a welcome change from a recent "mini-trend." Investors should note, though, that acquired revenue and expenses are still impacting performance and it is often more difficult for analysts to accurately forecast results in that environment. In other words, take the beat with a small grain of salt.

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Investopedia: Winn-Dixie Gets An Early Gift

With only six days left 'til Christmas, BI-LO decided to finish its shopping list in a big way, announcing Monday that it was acquiring Winn-Dixie (Nasdaq:WINN) in an all-cash deal. Although some shareholders may lament that BI-LO's acquisition sells short Winn-Dixie's ability to turn itself around, the fact is that getting 85% or 90% of a company's possible value in straight-up, no-risk cash is not such a bad deal.

The Deal  
Winn-Dixie announced Monday morning that it had accepted an offer from privately held BI-LO to sell itself for $560 million or $9.50 per share in cash. That price represents a 75% premium to Friday's close, but only tiny premiums on the basis of EV/revenue or EV/EBITDA multiples. (For related reading, see Value Investing Using The Enterprise Multiple.)

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Investopedia: IBM Shows Its Demand For Analytics

Software and services giant International Business Machine (NYSE:IBM) has been saying for some time now, that it believed there was both opportunity and necessity in adding more analytics capabilities to its software offerings. The company has decided to put more of its money where its mouth is, agreeing to acquire small retail analytics software provider DemandTec (Nasdaq:DMAN), in a $440 million net cash deal.


The Terms of the Deal 
Assuming no regulatory, legal or shareholder hang-ups, IBM will be acquiring DemandTec for $440 million in net cash. That works out to $13.20 per share, or a 57% premium to DemandTec's price, prior to the deal announcement.


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Investopedia: Maidenform Pulled Out Of Shape

Players in the intimate apparel space, like Hanesbrands (NYSE: HBI) and Warnaco (NYSE: WRC), warned earlier this month that the market was not so strong, and data from retailers like J.C. Penney (NYSE: JCP) and Kohl's (NYSE: KSS) was likewise not encouraging. Even with that backdrop, though, Maidenform Brands (NYSE: MFB) surprised the Street with a very disappointing third quarter and some self-inflicted wounds only made matters worse.

A Poor Q3  
There's no value in sugar-coating what was a lousy report from Maidenform. Sales rose less than 2%, while sell side analysts had been expecting 11% growth, versus last year's quarter. Wholesale sales, the bulk of MFB's revenue base, rose just barely more than 1%, but the results were curiously mixed. Sales to mass merchants like Wal-mart (NYSE: WMT) and Target (NYSE: TGT) jumped 15%, but sales to department stores were down almost 1%. (To know more about buy side and sell side analysts, read: Buy Side Vs. Sell Side Analysts.)


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Investopedia: Bulls And Bears Still Battling For Helen Of Troy

It's pure coincidence that I just finished reading through The Iliad earlier this week; the ancient story of the Greeks fighting the Trojans after the kidnapping of Helen. There are undeniable similarities with the battle for the fictional Helen and the back-and-forth with Helen Of Troy (Nasdaq:HELE) and the market. While I seriously doubt that Athena and Poseidon are taking a personal interest in the stock market and influencing traders, the advances and declines in this stock do seem to resemble the ebb and flow of that legendary battle.

A Tougher Second Quarter  

Helen of Troy reported that sales rose almost 59% this quarter, but that figure was greatly boosted by the acquisition of Kaz and it came in close to 5% below the average analyst estimate. The personal care and healthcare/home businesses were disappointing; personal care was down 2% and the healthcare/home was down about 1% on a pro forma basis. Consequently, the 14.6% growth in the smaller housewares business was largely for naught. All in all, adjusted revenue growth this quarter was just 2% and that's not enough.

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