Keith: PSS looking to breakout again from its TRADE line 13.99.
Brian
- The consensus is off by a buck next year – no kidding.
- PSS was investing in SG&A and PP&E while comps were down, product costs were heading up, and cost of capital was turning unfavorably.
- 96% China exposure is Big. Yes it hurt while costs were rising, but we’re going the other way as capacity opens up again in China.
- Leverage is still a concern. I don’t like it one bit. But comps are stabilizing, and both FOB and rent is coming down dramatically.
- On a flat comp, these 2 items result in $0.55 in EPS over 12 months.
- I buy into the ‘white space’ argument, meaning that the company can take up ASP to the high teens as it improves product mix. Opportunities at Sperry and Saucony are gravy.
- Tough to find a company with this much earnings upside.
