As I write this the stock is down close to 6% [$8.37 - 0.53] on the earnings report. I've held this stock for years on the hopes that this small retailer could find a way to grow the company on a sustained basis. I've been wrong. I hold a number of shares and I will gradually exit the stock over the next few years since it appears the Board of Directors will not change the management or the direction of the company. IMO the cash used in the past for special dividends would have been better used to buy back shares with the ultimate goal of taking the company private. Oh well, another investing lesson learned!
Wow. I'm surprised at the level of selling since the earnings report. This morning the stock price dropped to $6.31 and is currently at $7.65, down $0.51 or 6.25%. It appears that some of the largest holders of stock are leaving. I expect continued weakness until the larger investors are through selling. I will wait a while before selling my shares as I hope the stock price will stabilize a bit higher. Sad. I really believe the Board of Directors needs to address the path of this company.
It may be futile but I suggest that shareholders vote against the Board members up for election when the annual meeting details are sent out. Hopefully some of the lager institutional holders will get more actively involved. I realize that insiders hold almost 15% of the stock and I'm sure the board members and upper management are nice people.
But this niche company is stagnant and needs some kind of change in my opinion.
Maybe a regular stock buyback; maybe a regular dividend; maybe a new CEO; maybe new Board members; maybe shop the company around; maybe diversify; maybe acquire some small companies to begin diversifying. Or not. Maybe TLF will just choose to just pay a special dividend every 2 years or so. It seems like the insiders favor that. If so they should just say that's the goal. Just my 2 cents.
Net income down 22%. The good news is that the stock only sold off about 3.5% today. But the sub-par earnings may cause the stock to be weak for another few trading days or weeks. Who knows? IMO the earnings report supports my belief that this company needs some new blood at the senior management level. International sales down 10%, apparently partly due to exchange rates. Again I question why such a small company has stores in 3 oversea countries and thus has to fight foreign currency issues. I guess it gives upper management an excuse to travel the globe on the company dollar. Let's just hope we'll get a dividend this year because I doubt we'll see $11 a share.
This post was a comment on the Q1 of 2015 earnings - May 2015. This makes 2 consecutive quarters of weak results. Others are commenting on the last quarter results in March, 2015. The thing is both quarters were similarly bad and another 1-2 weak quarters will prove my points that this company is in need of some new ideas.