Bear Stearns: CDW's Sagging Sales Growth To Weigh On Sentiment (CDWC)

In a note to clients sent out Wednesday evening, Bear Stearns analysts Andrew J. Neff, Bill Hand and Ted Chung set this standard for computer retailer CDW's monthly sales report the following morning:

Expecting deceleration in CDWC’s February sales growth – results tomorrow (3/9) before market open. We believe CDWC is likely to report deceleration in average daily sales from 8.5% in January to our forecast 7.2% YoY growth (or total sales of $493mm) for the month of February. Factors behind this deceleration include the potential for disruption from its corporate sales force reorganization and CPU-related weakness at AAPL (~5%+ customer) as it drives business direct and navigates the INTC transition. February’s result would be below 8.5% YoY growth in January, which came in slightly better than expectations and may have been helped by slippage from December which was weaker than expected. Our sense is that average sales growth in the 8%-9% range (similar to last quarter) could be viewed by investors as a modest positive (i.e., no deceleration), while less than 8% may be seen as disappointing. Stock impact: modest negative for CDWC.

Yesterday, CDW reported just 6.8% growth YoY for February, even lower than the analysts' prediction of sales deceleration.

CDWC 1-yr chart:

Comments

[UserThunder...:]

A sad look back at our beloved bear.

Mar 16 05:56 PM