Exclusive Analysis for the Discerning Investor
The men’s clothing retailer missed consensus estimates and shares have come under pressure as a result. However, we still don’t think the firm’s valuation is attractive enough for us to initiate a position.
After the market closed Wednesday afternoon, Men’s Wearhouse (click ticker for report: ) reported relatively uneventful fourth quarter results that were overshadowed by the company’s strategy change. After announcing the appointment of John Kimmins to chief financial officer last week, the company unveiled that it hired Jefferies to evaluate strategic alternatives for its K&G unit (potentially a sale), which has struggled immensely. The company will focus on Men’s Wearhouse and Moore’s. The firm also added $155 million to its share repurchase authorization, giving the company the ability to repurchase $200 million shares. On top of share repurchases, it announced an amendment to its current credit facility. Kimmins must have been busy. As for K&G, we believe market participants think the company is signaling it will … Read more
Key Takeaways · Valuentum sees four major brand segments o Ultra-Luxury § Richemont, Burberry, LVMH, Gucci (Kering), Chanel, Hermes § Rich heritage brands, economically resilient consumer o Luxury § Marc Jacobs, Tory Burch, Ralph Lauren, Tiffany § Valuable brands, semi-strong barriers to entry o Aspirational § Michael Kors, Marc by Marc Jacobs, Coach, North Face § Popular with younger consumers, strong brand loyalty o Established § Nike, Adidas, Under Armour, lululemon, PVH, Express § Price competitive, exposed to fashion · Our favorite dividend idea: Coach · Fallen Stars: Guess, Bebe · Valuentum’s Take: Brand value is only part of the investment equation Branding has been a powerful force in both marketing and investing for the past century. Companies work hard … Read more