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Takeaway: GPS’ ugly beat. DECK forecast accuracy is horrendous. PIR shows perils of no dot.com presence. JOSB scaring off MW could cost 1/3 of mkt cap


GPS - 4Q Earnings


Takeaway: Let's put this GPS 'beat' in context. They levered SG&A on a 3% revenue decline. On one hand, give 'em credit for controlling costs. But on the other, that hardly bolsters our confidence that the company is investing in driving the top line going forward.  Gross margin was down -277bps. Ugly. Operating margin -133bps. EPS -7%. Oh, and by the way, inventories were up 10% on a 3% revenue decline. #terrible. That brings us to the SIGMA chart below. The massive move to the lower right is absolutely uncharacteristic of a stock at a 10-year high.

Retail Callouts (2/28): GPS, DECK, PIR, JOSB/MW, AdiBok - chart1 2 28

DECK - 4Q Earnings


Takeaway: This one is puzzling. By the look of the quarter, and the SIGMA chart below, you'd think that DECK was sitting pretty. But the stock is down double digits on the print, which is largely the result of a weak 1Q guide. But the thing with DECK is that the company ALWAYS guides down. It's what they do. We don't condone it, but it's a reality. Either a) the company is simply uber-conservative, or b) it's internal forecasting accuracy is horrendous. We'd like to think it's conservatism, but our sense is that DECK has a problem with forecast accuracy. The trouble with this stock now is that we just passed the seasonal period where its core product, UGG, does best. Now people have to wait another nine months for anything to get excited about.

Retail Callouts (2/28): GPS, DECK, PIR, JOSB/MW, AdiBok - chart2 2 28

PIR - Pier 1 Imports, Inc. Updates Fourth Quarter and Full Year Fiscal 2014 Sales and Earnings Per Share Guidance


  • “'Since our holiday sales update on January 9th we have continued to experience significant disruption from adverse weather in many of our major markets. This has resulted in considerably softer store traffic, as well as some temporary store closings, which further pressured fourth quarter sales and merchandise margin...We saw another sequential increase in e-Commerce sales, which reached 5% of total sales in the quarter, while traffic to the site increased to 1.9 million visitors per week. For the full year, e-Commerce will contribute approximately 4% to fiscal 2014 total sales – putting us readily on track to reach our targeted contribution of 10% of total sales by the end of fiscal 2016.'”

Retail Callouts (2/28): GPS, DECK, PIR, JOSB/MW, AdiBok - chart4 2 28

Takeaway: PIR is no stranger to disappointing. One of the problems it faces is that e-commerce is only 6% of total sales. Stack that up against someone line Restoration Hardware at 47%, or Williams-Sonoma at 46%, and it puts considerable risk on the business when store traffic is under pressure due to factors like weather.

JOSB , MW - Jos. A. Bank Board Rejects $63.50 Per Share Tender Offer; Agrees to Meet With The Men's Wearhouse-Willing to Consider a Higher Price


  • "The letter...states that its Board of Directors, after careful consideration and discussions with its financial and legal advisors, has unanimously rejected The Men's Wearhouse Inc.'s $63.50 per share unsolicited offer as inadequate, after giving effect to the Eddie Bauer acquisition and related issuer tender offer, and not in the best interests of Jos. A. Bank stockholders. The Board recommends that the Company's stockholders reject the Offer and not tender their shares into the Offer."
  • "The Jos. A. Bank Board continues to believe that significant value will be created for shareholders in its proposed acquisition of Eddie Bauer and the related issuer tender offer...It further stated that the financing for the Jos. A. Bank acquisition of Everest is proceeding on track, and that the Company expects to market and place the high yield bonds promptly. The bridge loan committed to by Goldman Sachs remains fully committed and, subject to its terms and conditions, will be available to Jos. A. Bank to finance the Everest transaction."

Takeaway:  JOSB's biggest risk here is that it succeeds in its effort to thwart MW's proposed acquisition. If MW walks, which is entirely possible, then JOSB loses a third of its market cap overnight.

ADDYY - Media Bank: Reebok Teams With Miranda Kerr... Rocky's New Champ


  • "Reebok launched a campaign with supermodel Miranda Kerr on Tuesday to promote Skyscape, its new active-and-casual women’s shoe."
  • "The Skyscape collection is available beginning April 1 at Shoe Carnival, Rack Room, Kohl’s, Shoe Show and on Reebok’s website."

Retail Callouts (2/28): GPS, DECK, PIR, JOSB/MW, AdiBok - chart3 2 28