KATE is reporting 4Q on Feb 23rd. A full week earlier than last year – and earlier than every 4Q earnings I can remember. KATE/FNP/LIZ have never been accused of closing the books on a reasonable time frame. We're looking at the same reporting day as W, KSS,LB, GIL. Those names would normally steal the limelight – but not this time.
You gotta ask WHY the books are closed early (in a naturally complicated year-end). Is it bc KATE found ‘accounting religion’? Not a chance.
My sense is bc Goldman’s pitchbook needs audited numbers to back up confidence in that third-year Banking Associate’s model.
My math: initial bid of $25. Bidding war takes it into low-mid $30s. There will likely be more interested parties than the consensus thinks. The math and behavioral concerns of prospects having underinvested in a) growth, b) margin optionality, and c) e-comm (all of which KATE offers) are supportive to a final number starting with a $3.
Downside to $15 in the event of the disastrous quarter people are already fearing.
The upside/downside (4/1) is so favorable that I gotta wonder what in the world I’m missing.
McGough