ANF

The Gap is Back…But We’re Not Chasing It Here

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Retailer Gap (click ticker for report: ) shrugged off sluggish international demand to post another strong quarter Thursday. For its second quarter, the retailer grew sales 6% from the same period a year ago, to $3.6 billion, north of consensus expectations. Earnings per share increased 40% to $0.49, which was also better than consensus estimates. The firm hiked its 2012 bottom-line earnings per share guidance range to $1.95-$2.00, a meaningful increase from its previous range of $1.78-$1.83. Other than its international segment, Gap is firing on all cylinders. Systemwide same-store sales grew 4% year-over-year, despite a 5% decline in the international division. Though Gap North America and Banana Republic lapped negative comparisons, both segments grew 7%. Management noted trends regarding … Read more

A Tale of Two Teen Retailers: Abercrombie & Fitch, Aeropostale

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On Thursday, Abercrombie & Fitch (ANF) and Aeropostale (ARO) reported third-quarter sales. The resulting stock price performace from the two was completely opposite: Abercrombie fell sharply, while Aeropostale shot up significantly. We think Abercrombie now represents a bargain under $59 per share, but we are waiting for the technicals to firm before diving into the shares in the portfolio of our Best Ideas Newsletter. We think Aeropostale is fairly valued, even after the big move. Let’s dig into the reports of both of the companies. Abercrombie was weighed down by poor results in Europe, Japan and Canada, with the company noting negative comps for its flagship stores in the regions. Though by itself, such news wouldn’t cause the massive 20%+ price … Read more

Stock Market Outlook for 2021

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By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more

There Is Milk At The Store

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This article first appeared in the September edition of the High Yield Dividend Newsletter. For more information about this publication, please see here. “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” — Winston Churchill By Brian Nelson, CFA Very few of us could have imagined that we’d witness the bull market that began on that fateful day in March 2009 that might very well mark a generational low. In 2009, major investment banks around the globe were struggling to survive, and the fallout in the mortgage markets left the banks holding paper that nobody wanted to own, let alone buy. The global financial system … Read more

2,350-2,750 on the S&P? Could the Coronavirus Catalyze a Financial Crisis?

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Image: We think a rather modest sell-off in the market to the target range of 2,350-2,750 on the S&P 500 is rather reasonable in the wake of one of the biggest economic shocks since the Global Financial Crisis. The chart above shows how far markets have advanced since 2011, and an adjustment lower to the target range of 2,350-2,750 is rather modest in such a context and would only bring markets to late 2018 levels (note red box as the target range). The range reflects ~16x S&P 500 12-month forward earnings estimates, as of February 14, adjusted down 10% due to COVID-19. When companies like Visa talk about a couple percentage points taken off of growth rates, one knows that … Read more

Qurate Retail Faces Difficult Turnaround Process

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Image Source: Qurate Retail Inc – First Quarter of 2022 IR Earnings Presentation Executive Summary: Qurate Retail Inc is home to several well-known retail brands including QVC and HSN that operate television networks and online marketplaces that sell curated products. The company is contending with several exogenous shocks such as inflationary pressures and supply chain hurdles, while customer engagement levels are on the decline after growing during the initial phases of the COVID-19 pandemic. Qurate Retail has a massive net debt load and sizable annual financing obligations, and its margins have deteriorated substantially of late. Due to its complex share structure and management organization, weak financial position, and lackluster outlook, we are not interested in Qurate Retail’s common or preferred … Read more

US Congress Is Getting Ready to Pass a Massive ~$2.2 Trillion Fiscal Stimulus Bill

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Image Shown: US equities have started to recover some of their lost ground as the likelihood that the US Congress will pass a massive ~$2.2 trillion fiscal stimulus and emergency spending package, dubbed the CARES Act, has increased significantly over the past week as seen through the bounce in the SPDR S&P 500 ETF Trust (SPY). President Trump has clearly indicated that he intends to sign such a bill into law as soon as possible, with the US House of Representatives expected to take up the legislation this upcoming Friday morning on March 27. By Callum Turcan On March 25, the US Senate worked late into the night to secure a bipartisan compromise on a massive ~$2.2 trillion fiscal stimulus … Read more

Changing Millennial Preferences and the Death of the Blue Box?

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A video that has been making the rounds challenging the markups at some of the high-end luxury dealers.