Keith shorted JNY putting one of our favorite shorts back in the in the Hedgeye virtual portfolio today. Consensus is still too optimistic with numbers shaking out at $1.25 in EPS for ’11 and nearly $1.50 for ’12 following the quarter.
As we look out over the balance of the year, revenue compares get increasingly more difficult and margin risk escalates meaningfully as the company banks on consumer confidence in the 2H (we have gross margins down -200bps vs. management’s outlook for -50-100bps). Yes, the stock’s down 11% since the quarter, but at $13.15 and no visibility or confidence in seeing earnings north of $1.00 in the company’s near future, we see further downside from here.
