Bebe stores misses by $0.01, misses on revenue


Bebe stores (NASDAQ:BEBE): FQ4 EPS of -$0.18 misses by $0.01.

Revenue of $103.56M (-8.7% Y/Y) misses by $1.24M.

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  • Wisdom's Reward
    , contributor
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    Here are my initial thoughts on the earnings release:

     

    The first, and possibly most important item is that the company did not burn through very much cash in the quarter, in spite of the fact that they undertook significant restructuring in the quarter. The cash balance went from $127.44 million at the end of last quarter to $125 million at the end of this quarter. Given that they paid out about $2 million in dividends in the quarter, shareholders might consider this a flat quarter in terms of the highly important cash balance.

     

    Second, even though the loss from continuing operations was $.18 versus an expected $.17, it looks like the free fall in sales may have finally bottomed out. Comparable stores sales were down 7.9% year over year in fiscal Q4 2013, but only down 1.9% yoy in fiscal Q4 2014. The gross margin appears to be stabilizing as well, having only fallen from 31.4% in Q4 2013, to 30.9% in Q4 2014. I know it sounds terrible to be happy about sales and gross margin declines, but that's the thing about depressed stocks. Any sign of stabilization can actually be very positive for the stock. That being said, after hours trading is showing the stock down about 3%, but I wouldn't assign very much relevance to that. In fact, I wouldn't be surprised if the stock were up tomorrow. The stock remains highly speculative as is true anytime a company's ttm Cash From Operations is negative - however, there looks to me to be signs of stabilization, which is mildly encouraging.
    4 Sep 2014, 04:41 PM Reply Like
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