Ladenberg analyst put out a NT BUY/LT BUY on Shopko because the new management team will provide Shopko with needed depth.
I almost died laughing I heard this. When almost all your stores compete you don't need new management What you need is to hire movers that will transport the stores where they do not have to compete with Walmart and Target.
Hiring new management is like rearranging the chairs on the Titantic.
May 24th coming soon. $5 may come sooner.
Earnings due this Thursday, and SKO already said that this and the next few quarters will be below expectations.
Ladenburg reduced Q2 current quarter estimates but did not reduce following quarter estimates despite management projections.
Selling before poor results are announced may be a prudent thing to do for investors.
At least there's one that wouldn't probably prefer to see my head on a platter. :) I'll try to keep thinking -- and I'm going to keep watching SKO as well. Like I said, I'd rather see them succeed, and you never know -- I guess somewhere in the grand scheme of life miracles sometimes do happen. Besides, I enjoy watching small caps take bites out of big caps...Keeps markets on their toes.
And don't forget, Sam Walton came up out of nowhere with a tightly coiled ringing wet towel and tanned the hides of everyone on the block -- that's what vision and direction can lead to.
If you have it, of course. Maybe SKO does, it just don't look that way right now.
ptcruz601-fyi I do not usually reply to posts, but I for one enjoy your posts, seems as though you have great thoughts, and as a long term SKO employee, I am taking this all very seriously, hoping I'm not waiting too long to make a move, it sure "feels" like that would be the thing to do. I am in one of the 3 Colorado stores and I feel that all they are doing is just setting us up to fail. Keep up your thoughts.
Ok, the sales and earnings results are in. Now we will get a look at what type of Management is in charge. Will we see creativity or Panic?
As I see it they have 3 options. 2 are bad.
#1) Continue as is, keep the head in the sand and say "We are not wrong on the road we have headed in for the past 5-8 years" The thinking is that the customer doesn't understand what Shopko has become, but one day the customer will have an epiphany and everything will work out. This will result in Shopko being out of business in 3-5 years.
#2) Panic, Oh my God we have got to do something quick! Lets do a 180 and go back to where we came from. Put out stacks of specials in the center aisle, Get real aggresive with hot deals in our circulars, run newspaper ads, create the buying carnival atmosphere, try and become like Walmart! This will result in 5-8 years of extended business, maybe. The problem with this scenerio is they will gain sales which is needed but lose margins which they can't afford. And, they will totally throw out what ever chance they have of getting the better brands and better clothing labels which has been their focus for the last 8 years. Lastly, the customer will become even more confused as to what Shopko stands for, but they will know one thing. Never pay regular price for anything at Shopko because the high low retail game is played way to much.
#3) Think out of the box- The management of Target and Kohls have somehow communicated to their staff the direction to move in. Both are progressive and operate totally different than Walmart and Kmart. If upper management really has a handle on the mass merchant retail world they will choose this option and we could potentially see some exciting things come out of one the last regional retailers left. If we see nothing new or "out of the Box" then we know that these guys are fish out of water and even after 5-8 years in this industry they have no better idea today than when they first came on board. Sadly, it will be a question of time then.
I am hoping for option #3
Here's an 'out of the box' thought for you. Sell SKO (a heavily dept laden company)and take the profits to purchase more Pamidas. SKO closed 23 units for under performance and it was rumored 10 more could follow. Pamida closed 1 unit and primarily is in non-competitive markets. Why not expand Pamida through more acquisition (ie. Alco) of other small town retailers and devote resources to making Pamida's model better. The recent addition of the Places stores to Pamida has been a great success. Much work needs to be done to improve Pamida's distribution system and other matters of urgency, but as a concept it has many merits.
Your name is truly appropriate! Great insight into direction, well thought out analysis. It will be intersting to see where the SKO managment team takes the ship.
Although it would be great to see #3, my impression is the ego of the ships captain will get in the way and we'll see more of #1 than anything. The interjection of fresh blood (COO, CFO) may have some fresh ideas brought from outside the box, this is where the fresh thinking will originate, not with the current managment. If so, they would currently be acting on their ideas...which isn't the case.
The fact of the matter is, there has been little if any fresh thinking originating from the SKO team of late. With every respect to the many hard working people at the store level, it is corporate decisions that make the difference between success & failure. Blaming the weather for poor performance is a transparent attempt to shield where the problems originate. The weather conditions will always persist (for roughly 6 months) in the SKO geographical regions, that can't be changed. What happens during the OTHER 6 months of the year is the true test of a healthy organization.
It's no secret that much of SKO's annual earnings are derived from the Christmas season...(help me here you midwesterners)...isn't that the time of the year when weather conditions in the midwest are typically at their worst? A forward thinking, proactive company would plan for these conditions and adjust accordingly during the spring, summer and fall seasons. What are they doing to attract sales during the other six months of the year when weather is not an appropriate excuse?
C'mon everyone, let's get some discussion on this, I think Deepthinker has raised some great points worthy of a long thread.
p.s. FU Spammers!