DSW: Overdone Sell-Off And Multiple Positive Catalysts Should Generate At Least 20%- 30% Upside
John Zhang • 16 Comments
John Zhang • 16 Comments
When Will DSW Be Good Value?
Alpha Gen Capital
Alpha Gen Capital
Tue, Nov. 29, 10:06 AM
- Cyber Monday online sales increased 12.1% to $3.45B, according to an updated tally from Adobe.
- Mobile spending was up 34% Y/Y to $1.07B to account for 31% of sales.
- Conversion rates were highest for desktops at 6.3%, while smartphones (2.8%) and tablets (5.1%) were still above holiday averages.
- Holiday shopping season sales through November 28 are up 7.6% to $39.97B.
- The S&P Retail ETF (NYSEARCA:XRT) is up 1.81% over the last week to outpace broad market averages. The list of outperformers over the last week -- which factors in the pre-Thanksgiving buzz, Black Friday reports, and Cyber Monday numbers -- includes Target (NYSE:TGT), Wal-Mart (NYSE:WMT), Hasbro (NASDAQ:HAS), Mattel (NASDAQ:MAT), Staples (NASDAQ:SPLS), DSW (NYSE:DSW), Barnes & Noble (NYSE:BKS), Dollar Tree (NASDAQ:DLTR), Dollar General (NYSE:DG), Burlington Stores (NYSE:BURL), The Children's Place (NASDAQ:PLCE) and Best Buy (NYSE:BBY). An interesting sidenote is that all the retail names listed above topped the return of Amazon for the 5-session period.
Tue, Nov. 22, 10:01 AM
- Dollar Tree (NASDAQ:DLTR) is up 11% after delivering a solid quarter that included an increase in Family Dollar acquisition benefits.
- Burlingon Stores (NYSE:BURL) races 15% higher after its Q3 results topped expectations.
- DSW (DSW +7.5%) and Chico's (CHS +7.3%) also turned in solid reports to round out the good cheer in the sector.
- Other retailers on the move include Dollar General (DG +3.1%), Big Lots (BIG +3.8%), Ollie's Bargain Outlet Holdings (OLLI +1.9%), American Eagle Outfitters (AEO +3.5%), Five Below (FIVE +2.8%), and Fred's (FRED +1.8%).
- Even the bigger chains are bringing in buyers, with Target (TGT +1.3%), Wal-Mart (WMT +1.5%), Staples (SPLS +1.8%) and Office Depot (ODP +3.2%) all ahead of broad market averages.
- The general theme in the retail sector today is margin improvement as some merchandise and operational costs were shown to have been reeled in to improve profitability.
Tue, Nov. 22, 8:43 AM
- DSW (NYSE:DSW) reports comparable sales fell 2% in Q3.
- DSW business sales grew 1.6% to $639.14M.
- ABG business sales declined 1.6% to $36.15M.
- Gross margin rate increased 50 bps to 30.4% driven by lower clearance markdowns and last year's inventory valuation reserve.
- Operating margin rate slipped 50 bps to 9%.
- Inventory -3.5% on a cost per square foot basis reflecting lower clearance levels and opportunistic buys.
- Store count +33 Y/Y to 498.
- The company expects FY2016 EPS to be in the range of $1.35 to $1.45.
- DSW +4.03% premarket.
Tue, Nov. 22, 8:29 AM
Tue, Nov. 22, 7:01 AM
Mon, Nov. 21, 5:30 PM
Fri, Nov. 18, 3:14 PM
Fri, Nov. 4, 10:48 AM
- Standpoint Research initiates coverage on DSW (DSW +0.8%) with a Buy rating on a call tied to valuation.
- Shares of the retailer have slipped to the $20 to $21 range after trading over $28 last March.
- DSW is due to report Q3 earnings on November 22.
- SA contributor Black Coral Research posted a good breakdown on DSW a few weeks ago.
- Black Coral Research on valuation: "We expect DSW to recover and post 10% earnings growth to $1.53 per share, driven by its expansion, the full integration of EBuys and better inventory sourced (also helped by the EBuys acquisition). This implies a forward multiple of just 13.8-times earnings compared to 18.4-times earnings for the S&P 500."
Fri, Oct. 21, 10:15 AM
- Data from NPD Group indicates that total U.S. footwear sales fell 5% Y/Y in September to $2.4B.
- Sales for women's footwear were down 7% during the month, with the fashion footwear category showing the most weakness. Warmer weather may have delayed some boot buying.
- Coupled with a weak earnings report from Skechers (SKX -17.7%), the broad footwear sector is tracking lower.
- Notable decliners include Rocky Brands (RCKY -3.7%), Weyco Group (WEYS -2.2%), Crocs (CROX -2%), Stephen Madden (SHOO -2.2%), Foot Locker (FL -1.2%), Finish Line (FINL -2.1%), Boot Barn (BOOT -3%), Shoe Carnival (SCVL -0.7%), DSW (DSW -1.5%), and Deckers Outdoor (DECK -3.9%).
- Previously: Skechers skids after earnings disappoint (Oct. 20)
Fri, Oct. 7, 10:20 AM
- Gap (NYSE:GPS) roars out of the gate with a 15% pop after reporting on September sales.
- The company topped estimates for a -3.6% decline with a -3% performance and noted an improvement in merchandise margins.
- Deutsche Bank took off its Sell rating on Gap, moving to Hold with a price target of $24.
- Potential positive factors for Gap that some are touting are that its upcoming comparisons will be somewhat easy to match and consumer spending may be freed up after the election fixation/anxiety is over.
- Those two considerations could apply across the sector if you buy into them.
- Apparel store names riding Gap's coattails today include Abercrombie & Fitch (ANF +3.1%), Francesca's (FRAN +3.6%), Boot Barn (BOOT +3%), Ascena Retail (ASNA +2.4%), Chico's (FAS -0.1%), Urban Outfitters (URBN +2.6%), Buckle (BKE +0.8%), DSW (DSW +2.2%).
- Previously: Gap higher after underlying monthly sales results top estimates (Oct. 6)
Wed, Sep. 14, 7:39 AM
Fri, Sep. 9, 9:27 AM
- A survey from William Blair indicates that teenagers and young adults have increased their visits to malls this year to reverse a multi-year trend.
- In what may come as a surprise, teens ranked malls above movie theaters, restaurants, and sports clubs/extracurriculars as their most popular place to meet.
- Despite the depressed levels of overall sales this year for mall retailers, the read on teens could be a possible indicator that the mall model will evolve and survive, instead of disappear.
- "While overall mall traffic remains challenging, our survey this year noted a material increase in the number of respondents who indicated they are visiting malls more often than last year, perhaps suggesting that malls’ efforts to increase relevancy (through more experiential brands and the addition of attractive entertainment and dining options) are beginning to bear fruit," says Bernstein analyst Sharon Zackfia.
- Mall retailers: AEO, ANF, ASNA, BKE, BOOT, CATO, CBK, CHS, CTRN, DSW, EXPR, FRAN, GCO, GES, GPS, LB, NWY, PLCE, SCVL, SMRT, SSI, TLYS, URBN, LULU.
Tue, Aug. 30, 12:53 PM
- A warning from Abercrombie & Fitch (ANF -20.6%) on second-half comparable sales is resonating across the jittery apparel store sector, along with weak reports from DSW (DSW -10.3%) and Christopher & Banks (CBK -19.7%).
- Ascena Retail Group (ASNA -6.6%), Stage Stores (SSI -5.1%), Guess (GES -3.8%), Chico's FAS (CHS -3%), and Francesca's (FRAN -2.8%) are all notably lower after the gloomy sector updates.
- Previously: Abercrombie & Fitch falls hard after weak outlook (Aug. 30)
- Previously: Sales fall short at Christopher & Banks (Aug. 30)
- Previously: DSW sets in-line profit guidance (Aug. 30)
Tue, Aug. 30, 7:11 AM
- DSW (NYSE:DSW) reports comparable sales decreased 1.2% in Q2.
- Adjusted gross profit fell by 210 bps during the quarter as a higher rate of markdowns dragged. Adjusted operating expense rate was 40 bps higher on elevated marketing costs.
- Store count +31 Y/Y to 480.
- DSW ended the quarter with inventory of $556.183M, up 10% Y/Y.
- The company expects full-year EPS to fall in range of $1.32 to $1.42 vs. $1.36 consensus.
- Previously: DSW beats by $0.05, beats on revenue (Aug. 30)
- DSW +0.46% premarket to $26.14.
Tue, Aug. 30, 7:01 AM
Mon, Aug. 29, 5:30 PM