Jo-Ann Stores Inc. (JAS)
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- Wall Street Breakfast: Must-Know News
- Wall Street Breakfast: Must-Know News
- Tough Year Ahead For Specialty Retailers
- Jo-Ann Stores: Tennenbaum Capital Liquidates Entire Stake
- The Short Case On Jo-Ann Stores
-
Earnings Schedule and Estimates for Monday, August 14, 2006
on Aug 14, 2006| by
- One Page Annotated WSJ Summary, June 12th
- Private Equity Buyouts Possible At These Three Retailers (MIK, JAS, ACMR)
- Jo-Ann Stores Reports Q3 Shortfall (JAS)
- Stocks Covered by The Retail Stock Blog
- Full List of Articles »
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Wall Street Breakfast: Must-Know News [view article]
Whjat you NEED to KNOW is that MO and PM raised thei dividens 10.3% and 17% respectively and are CHEAP. ReplyEli Hoffmann
Wall Street Breakfast: Must-Know News [view article]
Hi guys. Thought I'd pipe in here. Rachael came on board with SA recently and is helping out with some of the duties, including filling in with the WSB when I'm out. This week was a training-in period for her. I think you'll agree her writing is superb, and she's a great addition to the team - not to speak of the mug shot 'upgrade.'Which reminds me: We're looking to hire a full-time, detail-oriented U.S.-based market follower with superb writing and blogging skills - mainly to help with our new Market Currents real-time blog. If you're interested, or can think of anyone, send me an email at eli [at] seekingalpha [dot] com. Reply
Wall Street Breakfast: Must-Know News [view article]
Looks like all the school boys have picked up their marbles and gone home. Good riddance. Boycotting Wall Street Breakfast because of a switch to a just-as-competent editor will not detract from its popularity. I can assure you the kids are still reading it - but mistakenly think their action will have a negative effect.... ReplyWall Street Breakfast: Must-Know News [view article]
good job. ReplyWall Street Breakfast: Must-Know News [view article]
Very good overview. Thanks very much. ReplyWall Street Breakfast: Must-Know News [view article]
Great info.Thank you. Reply
Wall Street Breakfast: Must-Know News [view article]
Very informative,Thank you. Reply
Wall Street Breakfast: Must-Know News [view article]
Great review!!! ReplyWall Street Breakfast: Must-Know News [view article]
""Global oil exports shrunk by 2.5% in 2007, despite 57%-higher prices -- seemingly defying logic. ""It doesn't defy logic when you subscribe to the peak oil theory. Just about all oil exporting nations are suffering from declines in their rate of pumping out their oil. Fact is..North Sea is in decline, Mexico also, etc. etc. Therefore, less oil to ship. Price has nothing to do with it. Reply
Wall Street Breakfast: Must-Know News [view article]
Mazel Tov Eli!!! ReplyTough Year Ahead For Specialty Retailers [view article]
What is your take on Best Buy's (BBY) business in emerging markets? I've heard that most consumers just go in there to look at things and walk across the street to those massive PC malls to buy their gear (lower prices).I don't know if specialty retailers like Best Buy will work in these markets. It's not a cookie cutter business model you can take over.
On the other hand, companies like WalMart who have pricing power, and Tiffany's with a strong brand presence will do well over time.
It will be some time before overseas operations for Home Depot and Best Buy provide soft landings when the US economy dives. Amazon which is not a specialty retailer has done well with almost 50% of revenues coming outside of the US (although valuations are high at the moment, margins extremely low).
Reply
Tough Year Ahead For Specialty Retailers [view article]
Very interesting read.The accepted sector classification (retail or specialty retail or consumer non-durables) for the above mentioned companies is as follows;
ANN - Ann Taylor Stores Corp - Specialty Retail
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BBI - Blockbuster Inc - Specialty Retail
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BBBY - Bed Bath & Beyond Inc - Retail
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BBY - Best Buy Co Inc - Retail
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CAB - Cabela's Inc - Specialty Retail
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CC - Circuit Cty Strs Inc - Retail
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COST - Costco Wholesale Corp - Retail
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FL - Foot Locker Inc - Specialty Retail
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GPS - Gap Inc - Specialty Retail
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HD - Home Depot Inc - Retail
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LL - Lumber Liquidators` Inc. - Retail
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NKE - Nike Inc Cl B - Consumer Non Durables
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PETM - Petsmart Inc - Specialty Retail
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PIR - Pier 1 Imports Inc - Retail
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RSH - Radioshack Corp - Retail
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SKS - Saks Holdings Inc - Retail
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SPLS - Staples Inc - Specialty Retail
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TIF - Tiffany & Co - Specialty Retail
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WMT - Wal-Mart Stores Inc - Retail
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Please check your Hemscott for correct classifications.
SA editors, please correct symbol link list in accordance with alphabetical list provided in this comment.
CrossProfit
Reply
Editors
General Discussion on JAS
Is this a buy or a sell? ReplyThe Short Case On Jo-Ann Stores [view article]
1) I partially agree, after all I stated that they were able to generate increasing GMs in a declining sales environment by getting rid of clearance items earlier on so this quarter looked ok. But as far as inventory goes, they are not lying but I believe that they are still carrying a lot of stale inventory. From Oct 2005 to Oct 2006, they did bring down a lot of inventory but that was mostly through the holiday season of 2005, since at Jan 06, they had $514mm of inventory, so for most of 2006 they've been working at a much lower inventory level, which is a good job by Webb. The problem I have is that Webb said that they didn't buy a lot of new inventory heading into the fall season which is fine but sales were still extremely slow meaning to me that this current level of inventory is still not being moved and the inventory is mostly out of season stuff. Also, Nov and Dec comp sales were very bad, so I suspect inventory may still just be sitting there. In this type of industry, that stale, out of season inventory loses value fairly quickly so I would not be surprised if they just write off a bunch of it and start clean or Webb decides to aggressive slash prices again.2) Debt has been reduced from $290 to $200, but it's still levered at close to 4.0x EBITDA. Also, that doesn't include the gross up for the sale-leaseback which now as a lease where they pay rent would essentially represent off balance sheet debt, so the actual leverage is higher than what's represented on the balance sheet. That's fine, it's a common practice but for a business with the industry dynamics and low cash flow JAS produces, that's a lot of leverage.
3) I expect SS to pick up for the same reason but I would not be surprised if the comps come in at 0-2%.
4) Fair enough, I think arts and crafts require more "trendiness" or some sort of "fashion" angle to pick up sales. Groceries has been a tough industry, WINN went bankrupt, etc and there are trends as demonstrated by WFMI and OATS but the bigger guys in my opinion, the traditional stores like Safeway, Kroger, Publix, Albertsons, have been fairly steady players, WMT has been difficult especially when considering the grocery union, but I feel the arts and crafts industry faces different dynamics overall. I am sure Webb will get the operation streamlined but I don't have a lot of faith in doing much on the sales end.
At any rate, good luck with your view on JAS and investment (if you are long). Reply
The Short Case On Jo-Ann Stores [view article]
Your article is well written and mostly factual, although I have a few things I would like to point out.1- I believe they have made great strides in the turnaround in Q3. Inventory was down 18% and GM was up 180 bp's on a negative 5.4% comp! You claim they have significant inventory that needs to be cleared. I disagree with this totally. You must think they are lying.
2- They have dramatically reduced debt levels.
3 - Superstore comps were hurt by less seasonal, less clearance and fewer inserts. The sales were artificially boosted in the prior period by all of these. Once they get past this y/y problem, SS will do better. I will admit that the superstores are not performing as well as expected or hoped.
4- Your claim that D. Webb whose " background was in groceries, where sales are not driven by changes in trends and tastes" is also faulty. What industry has gone through a more difficult period than grocery. What do you think Wal-Mart has done to this industry over the last decade? Or Target, Costco? How about Whole Foods, Wild Oats, Trader Joe's, Fresh Market, etc. Grocery stores have been squeezed on both ends. Losing the low income shopper to WMT and the high end shopper to the organic/natural food stores.
I do agree that the stock has already priced in a lot of this, maybe all of it. I believe it is likely that JAS will earn near 2/share in 2007. Estimates will be raised quicly, probably after the next call. If JAS can only get to 2/share, it is fairly, maybe fully valued. But if they can continue to improve margins, which is a big question, the stock will move much higher. WMT exiting the cut fabric business, will certainly help. Sales may only benefit 3-5%, but margins may benefit much more. Reply