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Joe's Jeans Inc. Message Board

  • bradley_copp bradley_copp Oct 15, 2013 6:51 PM Flag

    You cannot say Joe's Jean did bad, because most retailers are "Slump"

    Just look at Buckle, Coldwater Creek, Gaps and so on. Any opinion welcome.

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    • Overall, not horrible considering the environment. I was surprised that they managed to keep SSS at a negative 6%. Going back a few quarters (this is from memory, so may not be completely accurate) they were up 10%, then up 5%, then down 1%, down 6% and now down 6% again. At least the drop may have finally leveled off. I really thought that they may hit double digits when I saw how bad other retailers were doing.

      But, what the heck happened to else? Down 75%? Wow. I expected a drop, but that's surprising.

      Margins for wholesale are concerning as well. Hamish said last quarter that was supposed to get back to the 40% level, yet it was 37.5% again this quarter. They used to blame else for dragging down margins, obviously that wasn't the case with the minimal else sales. That missing 2.5% is huge, represents over $500,000 to gross profit, or probably $350,000 to the bottom line. They need to use their increased buying power to get that back to the 40-42% level we used to see.

    • actually they admitted on the call that they did bad regarding their retail stores by reacting way too late to the promotional environment and getting double digit same store sales declines in return in the first eight weeks of the quarter.

      that said I wouldn't care much about past earnings but rather look at the new combined company which will report its first quarter containing results from both Hudsons (2 months) and Joe's - analysts will run into problems modeling the combination. Looking at the current estimates I would expect this to come down significantly following the weak numbers from Joe's today. Revenues of $48 mln would imply $35 mln from Joe's and $13 mln from Hudson's so the first number looks way too high here. Would expect estimates to come down to $45 mln. If this doesn't happen prepare for another big miss next quarter.

      would stay at the sidelines as I am very skeptical about the acquisition especially as the companies will stay separate.

 
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