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
Yesterday, 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
Wed, Aug. 17, 10:11 AM
- DSW (DSW -0.5%) says it signed Apparel Group as its exclusive franchise partner in the Gulf Coast.
- The company says the agreement will expand DSW into Saudi Arabia, Bahrain, Qatar, Kuwait, United Arab Emirates, and Oman.
- The first stores of 40 stores are expected to open in 2017.
- The stores in the Middle East will be in both malls and on high street locations, with the initial stores averaging approximately 15K square feet and offering approximately 2K choices per store.
- Source: Press Release
Tue, Aug. 16, 10:26 AM
- The RetailMeNot Promotions Index will measure the average retail promotions level from the top 500 U.S. retailers across 19 different categories.
- The broad promotion index currently reads 32.58% which RetailMeNot calls a "moderate" level.
- Tracking of the RetailMeNot data could be of particular interest in the apparel store sector (GPS, LB, AEO, ANF, CHS, PLCE, DSW, DXLG, FRAN, BKE, SSI, DEST, NWY, CTRN, GES, TLRD, SMRT.
- Retail ETFs: XLY, XRT, VCR, RTH, RETL, FXD, FDIS, RCD, PMR, JHMC).
- Source: Press Release
Thu, Aug. 11, 9:59 AM
- The retail sector is racking up sizable gains after Macy's set the table with a major store closing announcement (15% of full-line stores).
- Earnings beats at Macy's and Kohl's, along with a surprise upgrade on American Eagle Outfitters (AEO +4.6%) are also helping to boost sentiment.
- Notable gainers include Guess (GES +4.3%), Dillard's (DDS +5.8%), Ascena Retail Group (ASNA +4.6%), Stage Stores (SSI +7.7%), Sears Holdings (SHLD +4.6%), Gap (GPS +3.5%), Abercombie & Fitch (ANF +3.2%), Barnes & Noble (BKS +3.2%), Urban Outfitters (URBN +1.3%), Francesca's (FRAN +2.5%), DSW (DSW +3.5%), Pier 1 Imports (PIR +4%), and Finish Line (FINL +2.4%).
- The S&P 500 Retail ETF (NYSEARCA:XRT) is up 2.1% on the day off the chain store buzz.
- Retail ETFs: XLY, XRT, VCR, RTH, RETL, FXD, IYC, FDIS, SCC, RCD, UCC, PMR, JHMC, CNDF
Mon, Jul. 25, 11:09 AM
- Apparel store stocks are off and running today on some broad strength.
- The sector has seen more buying action of late after hitting a prolonged rough patch. A couple of solid reports on June sales from key retailers and some calming down of the recent civil unrest has contributed to improved outlook.
- Notable gainers include Gap (GPS +3.5%), Nordstrom (JWN +3.3%), L Brands (LB +2.9%), Urban Outfitters (URBN +2.8%), Macy's (M +2.3%), Kohl's(KSS +1.7%), Francesca's Holdings (FRAN +1.5%), Chico's FAS (CHS +2.1%), Tailored Brands (TLRD +1.5%), and DSW (DSW +1.8%).
Mon, Jul. 11, 2:42 PM
- Wells Fargo sees enough improvement out of DSW (DSW +4.1%) to upgrade the retailer to Market Perform from Underperform.
- The investment firm thinks trends have improved since the last guidance update and points to the kids assortment now available in 200 stores as a growth driver. The kids development could help DSW increase one-stop family shopping traffic as well as bring in some new faces.
- Wells on DSW: "We believe downside risk to DSW shares over the near term is limited. Raising FY17 EPS estimate from $1.38 to $1.45 (still below the Street’s $1.52) and valuation range to $20-$22 (from $16-$18.)
Fri, Jun. 17, 10:03 AM
- Gap (GPS +3.7%) is back over $20 for the first time in over a month with some improved sentiment bubbling up over the retail sector.
- The retailer's +4.5% dividend yield may be luring in some buyers
- Other retail movers ahead of broad averages in early action include Nordstrom (JWN +2.3%), Tailored Brands (TLRD +3.6%), Pier 1 Imports (PIR +3.6%), Best Buy (BBY +2.8%), and DSW (DSW +2.5%). Perhaps it's coincidence, but all those companies boast a dividend yield of over 3%.
Thu, Jun. 9, 12:23 PM
- Retail stocks are broadly lower after a weak earnings report from Restoration Hardware (RH -21.2%) set a gloomy tone. The S&P Retail ETF (NYSEARCA:XRT) is 1.91% lower on the day.
- Williams-Sonoma (WSM -4.8%) and Bed Bath & Beyond (BBBY -3.7%) are down sharply after the RH guidance dud.
- Mall chain and department store stocks are also seeing some anxious trading as investors continue to bet on discounters and variety stores which target budget shoppers.
- Notable decliners include Ascena Retail (ASNA -5.4%), Guess (GES -3.2%), Nordtrom (JWN -3.1%), Urban Outfitters (URBN -2.6%), Cato (CATO -2.6%), DSW (DSW -2.6%), and Gap (GPS -2%).
- Target (NYSE:TGT) is down 1.6% after a rough annual meeting where there was much more attention paid to the company's transgender bathroom policy than execs probably desired.
- Retail ETFs: XLY, XRT, VCR, RTH, RETL, FXD, FDIS, RCD, PMR, JHMC, CNDF
Wed, May 25, 11:21 AM
- Investment firms reset expectations on DSW (DSW +7%) after factoring in the retailer's Q1 report and guidance update.
- Jefferies lowers it price target on DSW to $26.
- Telsey Advisory moves to a $23 PT from $26.
- Canaccord Genuity turns the bearish of the bunch, dropping to a PT of $19.
- Previously: DSW down after earnings miss in Q1 (May 24)