WMT

Don’t Get Too Floored By Lumber Liquidators’ Performance

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Over the past year, one of the more amazing performers has been hardwood floor supplier Lumber Liquidators (click ticker for report: ). Shares have steadily climbed a whopping 185% over the past year and are up 55% year-to-date. However, we do not believe such robust performance is likely to continue. Fundamentally, little is wrong with the company’s recent performance. In fact, Lumber Liquidators is benefitting from a strong rebound in the US housing market. Flooring is one of the more obvious features of a house, making it an obvious area to improve from almost all aspects of ownership, whether it be selling, buying, or renting. With hardwood floors still in vogue, the firm is capitalizing on this demand, experiencing a … Read more

Costco Outperforms Wal-Mart and Target

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Even as Wal-Mart (click ticker for report: ) remains challenged, wholesaler Costco (click ticker for report: ) continues to report strong results. Revenue increased 8% year-over-year to $24.8 billion, falling slightly short of consensus estimates. Earnings jumped 37% year-over-year to $1.24 per share, roughly in-line with consensus expectations. Earnings included a one-time $0.14 per share benefit, net of which earnings still grew 22% year-over-year. Although revenue growth was only 8%, membership revenue jumped 15% year-over-year to $528 million. Membership revenues are driven by fantastic renewal rates, which in the US and Canada totaled 93.9% for business memberships and 88.8% for Gold Star memberships. With renewals so strong, the company has been able to easily pass on price increases, saying: “Continued … Read more

Who’s Amazon’s Next Victim?

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An interesting white paper was released recently, analyzing how Amazon (click ticker for report: ) is altering the retail landscape. The paper itself had some interesting insights, but our favorite takeaway of Placed’s work was the top ten companies at risk. 1.    Bed Bath and Beyond (click ticker for report: ) 2.    PetSmart (click ticker for report: ) 3.    Toys ‘R Us 4.    Best Buy (click ticker for report: ) 5.    Sears (click ticker for report: ) 6.    Barnes & Noble (BKS) 7.    Kohl’s (click ticker for report: ) 8.    Target (click ticker for report: ) 9.    Costco (click ticker for report: ) 10. JC Penney (click ticker for report: ) For the most part, we agree with the list, … Read more

Target Remains Cautious on 2013; Shares Look Fairly Valued

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Retail powerhouse Target (click ticker for report: ) announced solid fourth quarter results Wednesday morning. Revenue increased 7% year-over-year to $22.3 billion, which fell short of consensus expectations. Earnings per share, when adjusted for expenses related to the Canadian rollout, grew 10% to $1.65, above consensus estimates. Though overall sales growth was solid, same-store sales increased only 0.4% year-over-year during the quarter. The results were a little worse than the growth we saw at Wal-Mart (click ticker for report: ) and also a little worse than the same-store sales growth rate we saw at Dollar Tree (click ticker for report: ), which we would attribute to consumers being very cautious with non-core purchases during the holiday season. In fact, management … Read more

Dividend Increases for the Week Ending February 22

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This week was jam-packed with companies raising their quarterly cash dividends. Below we provide a list of firms that upped their dividends for the week ending February 22. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here. Firms Raising Their Dividends This Week Abercrombie & Fitch (ANF): now $0.20 per share quarterly dividend, was $0.175. Analog Devices (ADI): now $0.34 per share quarterly dividend, was $0.30. Chemung Financial (CHMG): now $0.26 per share quarterly dividend, was $0.25. Chesapeake Lodging Trust (CHSP): now $0.24 per share quarterly dividend, was $0.22. Cheviot Financial Corp. (CHEV): now $0.09 per share quarterly dividend, was $0.08 Corrections Corp of America … Read more

Wal-Mart Posts a Solid Fourth Quarter; Boosts Dividend

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Retailing goliath Wal-Mart (click ticker for report: ) announced decent fourth quarter results yesterday. Revenue increased 3.9% during the quarter to $127.1 billion, just a touch below consensus expectations. Earnings were better than expected, but boosted by a favorable tax rate, growing 11% year-over-year to $1.67 per share. Although the quarter was by no means a blockbuster one, we thought results were acceptable. Wal-Mart’s core US namesake business experienced 2.6% sales growth thanks to same-store sales that increased 1% (1.8% ex-fuel). Traffic declined marginally, down 0.1%, but average tickets were 1.1% higher than the year prior, and NPD indicated that the firm grew market share over the holiday season. Let’s not forget that Wal-Mart registered sales of nearly $75 billion during … Read more

Best Buy’s Holiday Sales Were Solid; Margins Are the Issue

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This morning, the maligned big box electronics retailer Best Buy (click ticker for report: ) provided updates on its holiday sales results, which were relatively strong, in our view. Breaking the downward spiral, same-store sales in the US were flat compared to last year, but continued to decline internationally, down 6.4% year-over-year. However, overall sales declined to $12.8 billion for the 9-week holiday season compared to $12.9 billion for the same period last year, suggesting overall business was fairly solid. Consistent with trends throughout 2012, consumer electronics were weak, while ‘Computing and Mobile Phones’ revenues surged. Source: Best Buy Holiday Sales Report, Valuentum Consumer electronics, largely comprised of TVs, has been weak and probably will continue to be until we see … Read more

Can Eddie Lampert Turn Around Sears?

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Earlier this week, Sears (click ticker for report: ) CEO Lou D’Ambrosio announced that he’ll resign from his position in February due to an illness in the family. Not so surprisingly, Sears chairman and hedge fund titan Eddie Lampert will be taking the reigns as CEO. Lampert, who merged Sears and Kmart several years ago, will be the chief executive for the first time, and as far as we can tell, he seems confident in his ability to turnaround the failing retailer. In an interview with the Chicago Tribune, Lampert cites Jeff Bezos’ success as a finance guy turned retailer leading Amazon (click ticker for report: ) as evidence that he can turn the dying company around. Although he hasn’t … Read more

Roundy’s: A Cheap Stock in a Terrible Industry

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After going public in early 2012, we profiled Midwestern grocery chain Roundy’s (click ticker for report: ). Earnings momentum has moved materially against the company, and as we predicted, the firm had to slash its enormous dividend payout. In a typical post-IPO period, management was optimistic about future prospects, and competition in the firm’s core Wisconsin market looked weak at best. What CEO Bob Mariano didn’t see coming was that Wal-Mart (click ticker for report: ) would enter Wisconsin in a big way, Woodman’s would keep growing, and Roundy’s-owned Copps would be thrown into a major price war, crushing same-store sales and margins. Our initial thesis included a stable, or even slightly declining core business, but not the 3.6% decline … Read more

Fiscal Cliff Averted; Aerospace Rallying

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After a volatile December, two of our favorite aerospace names, Astronics (click ticker for report: ) and EDAC Technologies (click ticker for report: ), are rallying significantly after a deal was finally reached to avert the fiscal cliff. Precision Castparts (click ticker for report: ), which had steadily moved higher during the fiscal-cliff ordeal thanks to optimism surrounding its planned acquisition of Titanium Metals (TIE), is also seeing strength today. We assumed both profit taking and overblown fears of defense cuts were the culprit behind the increased volatility, and it seems as though that could be the case. We continue to see substantial upside at these firms thanks to the massive, multi-year commercial aerospace backlogs of the large airframe makers. Our Best Ideas portfolio … Read more