PSS

Our Reports on Stocks in the Specialty Retail (Shoes) Industry

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Structure of the Specialty Retail (Shoes) Industry The specialty retail (shoes) industry includes footwear makers and retailers that sell fashion and athletic footwear. Manufacturers focus on developing partnerships with retailers to achieve product distribution. Depending on brand strength, margin dollars can go to either side of the partnership. Location for retailers is critical, as many consumers still purchase from local brick-and-mortar stores, though online sales continue to expand. The industry is highly fragmented, and small regional players continue to be displaced by larger firms with better scale and purchasing power. We’re neutral on the industry. We no longer publish reports on the Specialty Retail (Shoes) industry. << Our Dividend Reports

Bloomberg Reports Collective Brands Likely to Be Bought Between $20 and $22 Per Share

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“(Collective Brands) expected to receive bids that valued it at $20 to $22, people with knowledge of the matter said last month. That range was higher than the company anticipated in August, when it disclosed a review of plans to increase shareholder value, said the people.” Read the full Bloomberg news release >> The cost basis for our position in Collective Brands is just over $15 per share. << About Our Best Ideas Newsletter

Though Ugg’s Probably Aren’t Dead, Deckers’ Shares Have Only Limited Upside

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The news for Deckers (DECK) hasn’t been great over the past several months. The slide in its share price began when the Street became more cautious on its fundamentals in December, and it recently culminated with flat earnings growth guidance for its fiscal year 2012 due primarily to higher input costs. Though the raw expense of boot materials (sheepskin) may weigh on the company’s fundamentals in the near term, we think the market has generally overreacted to the these headwinds. Regardless of how fashionable men think the company’s flagship Ugg boots are (often nicknamed “Ugg-ly), we think they’re among the most dominant women’s winter footwear brands, along with Sorel (COLM) and North Face (VFC). And why wouldn’t they be? Other … Read more

Collective Brands Surprises in Fourth Quarter

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Though much of the recent rise in the share price of Collective Brands (PSS) can be attributed to takeover speculation, shares jumped over 4% in after-hours trading Tuesday thanks to a better-than-expected quarterly report. The company’s fourth-quarter loss came in at a steep $0.69 per share, but that result was materially better than consensus expectations. We are sticking with our above-market fair value estimate for Collective Brands at this time. Consolidated revenue grew 5.4% thanks to strong PLG Wholesale results (up 21%) and PLG retail lapping a difficult fourth quarter in the year-ago period, with sales increasing 13.5%. PLG Wholesale continues to shine through as the crown jewel of the business, and we suspect that most potential buyers of the firm … Read more

Best Ideas Alert: Collective Brands (PSS) To Narrow Potential Suitors to 10; Bidding Likely to Start at $20 Per Share

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From Bloomberg: “The company (Collective Brands) began yesterday notifying the 20 bidders from the first round whether they would move on to the next, which will comprise about 10 parties, said the people, who declined to be identified as talks are private. Based on bids so far, Collective Brands could get at least $20 a share if the entire business is sold, said one of the people. That would value the Topeka, Kansas-based retailer at about $1.2 billion. Collective Brands got initial offers from buyout firms TPG Capital and Leonard Green & Partners LP, as well as from rivals such as Wolverine World Wide Inc., Columbia Sportswear Co. (COLM) and Deckers Outdoor Corp. (DECK), the people said. The retailer is keeping … Read more

Mixed Bag Yet Again in Collective Brands’ Third Quarter

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One of Valuentum’s best ideas, Collective Brands (PSS) reported quarterly results on Monday after the close. Results, as has been the case for the last several quarters, were mixed. Payless domestic continued to shut down less profitable stores, which helped contribute to the segment’s 5% sales skid. Same store sales also fell 4.5% domestically, reflecting the slow economic recovery and Payless’ ties to low-end consumers. Internationally sales weren’t very good either. Sales only increased by 1.1%, and same stores sales actually fell in Canada. Operating profit in the segment fell by 55%. At the same time, it’s good to see sales growth at any Payless location. PLG Wholesale Blowing Away Expectations While the Payless business remains challenged, or frankly, bad, … Read more