We're booking this long, removing it from the long bias list. We made it a Best Idea long in Jan at $9.50. The stock saw $20 in the spring, and we lowered this to the bias list in summer favoring CAL as the better play in footwear retail. Yesterday the stock ripped on a Gross Margin-driven earnings beat. But let’s address the elephant in the room – revenue wasnt good. Down 9% vs 2019 (vs down 5% last Q), and they missed comps (41% SSS vs street at +45% and the whisper at +60%). US Net Sales was 31% vs street 36%. It was a great tape to beat on earnings – and the market ran with it. But unlike CAL – which is a Best Idea Long – the GMs here of 37% just are likely not sustainable. Next year they lose Nike as a vendor and lap stimulus, which bolstered 2021. As we transition into Quad 1 – the call here is to get out of DBI, and get into Nike. Also get out of HIBB and BGFV.
