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Takeaway: Cheap gets cheaper while numbers come down (especially in Macro Quad4), and revisions to the downside aren’t done yet here.

It’s tempting to take FL off our Best Ideas Short list on today’s -17% move, but the reality is that I don’t believe guidance. The company just missed on the easiest top and bottom line compare of the year, and is guiding to msd comps for the full year at a time when Adidas is no longer stuffing the store with Yeezy’s to drive the comp. 2Q guidance looks simply terrible, and while it might be sandbagged, a bull case scenario is that EPS is flat – not worth paying for. People beat up the company in the Q&A for not buying stock in the quarter, but it knew what it was doing – it knew the stock would get shellacked after missing targets that were in effect blessed just 5 weeks before the quarter ended at its analyst meeting on March 28th. The company is guiding to msd full year comps and a high single digit EPS growth rate for the year, which I think is aggressive given compares get so tough and traffic is negative. I’ve got EPS flat in my model for the year. I understand that the stock looks dirt cheap at 9x earnings and 5x EBITDA – but Hedgeye’s Macro call is that we’re headed for a Q2 GDP miss, and Macro Quad4 is valuation agnostic. The cheap get cheaper – especially when earnings are revised downward. I’m moving FL down a few notches on my Best Idea Short list given today’s action, but unless the consensus comes out with EPS growth for the year closer to flat, I’m staying short.