Friday, December 6, 2013
11:05 AMPacific Sunwear rises on Q3 top-line beat; sees comps momentum in Q4
- Pacific Sunwear (PSUN +15.2%) shares are up sharply after the company beat expectations on the top-line in Q3 and forecast comps momentum to continue in Q4. A string of other retailer misses may also be buoying the market's reaction.
- Comparable store sales grew 1% Y/Y. The company ended the quarter with 635 stores, a 13.4% Y/Y decline.
- Gross margin of 25.0% fell 300 bp from Q3 2012.
- Management guides for Q4 revenue of $216M-$225M (vs. consensus of $218.7M) on comps of 1% to 5% and EPS of -$0.17 to -$0.12 (-$0.11).
- PR, conference call (transcript)
10:34 AMRally Software tanks on decelerating metrics, weak Q4 guidance
- Shares of Rally Software (RALY -24.3%) plunge after a Q3 beat, decelerating fundamental metrics, and weaker-than-expected Q4 guidance.
- Management's expectations for Q4 revenue of $19.2M-$19.4M (+24%-25% Y/Y) are far shy of analyst expectations of $20.4M. EPS is seen by management at -$0.26 to -$0.24, below a consensus of -$0.20.
- Seat count grew 28% Y/Y to 155K and 3% Q/Q. Calculated Billings (revenue plus the change in deferred revenue), grew a much slower 8% Y/Y to $16.4M.
- A downgrade from Piper Jaffray to Neutral from Overweight is also hampering shares. Analyst Mark Murphy noted concerns on the conference call: "I think people right or wrong they are going to be horn in on the sequential growth rates for paid seats and differed revenue." Deferred revenue growth decelerated to 13% Y/Y, with the balance at $33.7M at the end of the quarter.
7:56 AMWealth management drives revenue gain for Scotiabank
- FQ4 net income of C$1.703B up 12% Y/Y, with EPS of C$1.30 up 10%. Net interest income of $301M up 12% thanks to a 13% increase in assets (ING Direct Canada acquisition) as NIM fell 3 basis points.
- Net fee and commission revenue of $1,788B up 9% Y/Y, driven primarily by higher wealth management revenue. Provisions for credit losses of $329M are about the same as last year. Operating expenses of $2.949B up 9%, with acquisitions accounting for half the growth. Productivity ratio of 53.7% improves from 54.9% a year ago.
- FQ4 results, press release
- Presentation slides
- BNS no trades premarket
7:25 AMIllinois Tool Works projects 2014 EPS in line with consensus
- Illinois Tool Works (ITW) expects 2014 EPS of $4.30-4.50 vs consensus of $4.46 and organic-revenue growth of 2-3%, the company says ahead of an investor day today.
- ITW also forecasts operating margins of around 19%.
- The firm confirms its 2013 guidance for EPS of $3.56-3.64 vs consensus of $3.62.
- "The Company is well positioned to continue to deliver strong performance in 2014, as reflected by our full-year guidance,"says CEO Scott Santi. (PR)
4:35 AMUlta Salon: Weak guidance might be an opportunity
- Analysts pull back on Ulta Salon (ULTA) following yesterday's weak Q3 and uninspiring guidance, but differ on ULTA's long-term prospects:
- Piper: "We are downgrading shares of ULTA to Neutral from Overweight based on the following considerations: 1) management indicated that they are suspending their prior target of mid-teens% operating margins; 2) management lowered their square footage growth assumptions to 15% versus their prior range of 15%-20% growth; 3) management has adapted a more muted outlook for EPS growth next year and now expects to see low-20s% growth compared to 25% previously."
- Goldman: "ULTA’s 3Q results revealed two layers of unanticipated challenges. (1) An incrementally-promotional environment challenged 3Q results, and has continued into 4Q. (2) New CEO Mary Dillon is assessing the company’s investment priorities, which involve incremental commitments to supply chain and marketing. These factors led the firm to fall slightly short of 3Q consensus (though within guidance); lower 4Q guidance; direct 2014 initial EPS toward low-20% growth, below the prior long-run guidance of 25-30%; and, “suspend” long-term mid-teens EBIT margin guidance... We still see a strong growth concept, with strong ROI, albeit with murkier near-term visibility. The company appears to be assessing the magnitude of the investment necessary to optimize digital marketing, labor, and supply chain; resolving these questions in coming months should enhance clarity on profit potential."
- Wells Fargo: "We believe the pullback in ULTA’s shares (down 17% after-market) due to disappointing guidance is a buying opportunity for this high-quality growth story. We believe the recent traffic slowdown will prove to be temporary, related to a share shift to cold-weather apparel categories in October and November (which saw pent-up demand after two warm winters) and to gifting/promotional holiday categories during holiday. ULTA’s inventories are well managed and have minimal markdown risk."