Retail Callouts (2/20): JWN, Ports, ANN, VFC, BBY

02/20/15 10:21AM EST

COMPANY HIGHLIGHTS

JWN - 4Q14 Earnings: Removing From Long Bench

Takeaway: We added JWN to our long bench on 10/16 following our Department Store Black Book. There are a lot of things to like about the name: e-commerce proficiency, brand portfolio, and square footage growth. But, we couldn’t get comfortable with the fact that it was operating in a space that has grown at a -2% CAGR over the past 20 years and needs to see 93mm square feet not just close, but exit the industry all together over the next 5 years. Since that time, the stock is up about 11%, in-line with the S&P. Now the company is guiding the mid-point of the earnings range to flat on 8% revenue growth. Either the company is sandbagging or this name is uninvestable trading up here at 20x next year's earnings. We're removing it from the long bench.

Retail Callouts (2/20): JWN, Ports, ANN, VFC, BBY - 2 20 chart1

Retail Callouts (2/20): JWN, Ports, ANN, VFC, BBY - 2 20 chart2

OTHER NEWS

Report: West Coast ports running at 50%-60% of capacity; retailers stockpile inventory

(http://www.chainstoreage.com/article/report-west-coast-ports-running-50-60-capacity-retailers-stockpile-inventory)

ANN - Ann Taylor Parent Said to Be Working With JPMorgan on Sale

(http://www.wwd.com/retail-news/designer-luxury/ann-taylor-parent-said-to-be-working-with-jpmorgan-on-sale-8209436?module=Business-latest)

VFC - VF Settles ITC Laser Denim Case

(http://www.wwd.com/business-news/government-trade/vf-settles-itc-laser-denim-case-8205968?module=Business-latest)

KORS - Report: Michael Kors joins Snapchat

(http://www.chainstoreage.com/article/report-michael-kors-joins-snapchat)

BBY - Best Buy adds Curbside app service in Bay Area stores

(http://www.chainstoreage.com/article/best-buy-adds-curbside-app-service-bay-area-stores)

H2O Plus Names Joy Chen CEO

(http://www.wwd.com/beauty-industry-news/people/h2o-plus-names-joy-chen-ceo-8205148?module=Business-latest)

© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.