Peyton Manning (Rouleau) couldn't get 16 wins out of the Tampa Bay Bucs (TUES)
My point is that the cult worship of Rouleau is nice, but unfortunately unfounded. He has a legitimate track record (absolutely no beef with it), but he's leading a team that is 75 yards away from the current $12.25 share price; please pardon the twisted metaphor. The more I dig, the more things look troubling for TUES. Here are my opinions underpinning my short:
The "middle and upper middle class" customers have long fled to, say, TJX.
The current TUES customers, I believe, are looking more and more like Big Lots shoppers.
Big Lots trades at 5.5X EBITDA -- which is where TUES should trade, at best, when it starts generating EBITDA.
TJ Maxx and Marshalls generate $367 of annual rev per square selling foot. TUES generates $96. See the 10ks.
Low-rent TUES locations won't make up the difference. In fact, in 2013, it makes a bad situation worse.
TUES has no scale to compete in the present, and scant ability to transform itself to compete in the future.
One distribution center to support 800 small TUES stores -- all across the nation -- just can't compete. No way.
The high, problematic SG&A at TUES, therefore, is going to be sticky. It is not coming down anytime soon.
Conclusions: TUES is a massive short. It's got structural problems. Manning's a good QB, but the Bucs are not going to the Super Bowl. Bet against the Bucs.