one thing that is perpetually confusing to me is their commentary on customers. On facebook they say 10-12k new customers a week, they say their retention is better than ever. But total customers on a rolling 12 mo basis is 1,446,000. Total customers on a rolling 12 mo basis as of 3rd qtr 2014.....1,444,000! no improvement. they knocked their GM to 34.5%, 3% below last yr and 1% below HSN's 3rd qtr and still could only generate a 3% increase in sales. lets see if they can make anything happen in the 4th qtr. despite their spin i dont see much to be excited about. they are trying and certainly have broadened the mix with brands that in theory should have a lot of followers but I don't see the traction (and hopefully we can insert "yet" in here) they seem to think they have. perhaps they do have that traction with new customers but they are cycling through some old customers and until that is done we wont see it in any of the metrics.
the stock price is where it is as much due to a complete lack of confidence in the mgmt to offer useful forecasts. hard to own a company when you are going to get crushed 30% on earnings because mgmt is unable to set expectations properly.
Shareholders are being held accountable to it. Bozek im sure will get a boatload of restricted stock so he can benefit from the recovery of a stock price drop they created.
Talked about two consecutive qtrs of profitability and suggested current 4th qtr and 1st of 2016. But not happening next yr. Maybe 4th qtr and 1st 2017. One reason stock gets killed is setting expectations, missing them and then saying its all part of the plan. They will be done destroying the stock price when you see insiders buying.
Perhaps nominal profitability on 4th quarters, but other than that don't see much profitability Over the next yr. and probably longer. They are going to try and pump the top line but clearly haven't had much success. Will also likely see increasing dist costs as they go hd, change channel placements, add second channels. While their current fixed costs are scalable in their current homes I think sales growth will continue to be eaten up by lower margins and increased spending on distribution until they are on par with the other channels. That leads to a multi yr run of more or less break even at best performance (if we avoid recession). Question is can they grow sales 5-10% and at least stop burning cash to give investors some hope. They are trying to build the case that is what they are working towards and the market doesn't believe it. They have completely crushed a potential key funding source, the stock and it is now a long road back and they need to hope they can at least get 20-25mm on the Boston station to buy them some more time and avoid dilution. Fortunately all pretense and lofty proclamations of being something different or better than the other home shopping options are gone. At least they are being real there and that they are simply another home shopping store.
Shareholder rights is just a ploy to keep themselves in power. There may indeed by some loss carryforward benefits but I doubt that was the impetus. I lost long term confidence in them and now im even seriously starting to wonder if they can generate a bounce back from easy comps. They need to get something for the boston station so they can build back some cash. Id be surprised if this doesnt head back down to the longer term support of 1.50. At this pt KS was shockingly better and not sure the economy gives the current team much of a shot to show their better as I dont see them finding success in a week economy.
Nope. None of the spin means anything until they are willing to invest their own $. perhaps once they've finished taking it back down to 1.50 we will see that.
Not much to say. They continue to disappoint and are running down their cash. Perhaps someone will post something worthwhile from the conf call.
i think this dog will have its day--at least back into that gap $4-$6 gap. might not be until 2nd qtr next yr when the comps are favorable vs the mess from 2nd qtr 2015. hoping for deeper analysis as to how their strategy is evolving and working (even if the strategy isnt breaking the surface yet to improve performance) instead of just hearing the "we want more better stuff" line. A good discussion pt would be when we intro a new line it did 50% of what the previous programming was and now it is earning as much and in a yr we will see it do 125% of what previous programming was doing.
They have been very light on the analytics and the market will not give them credit for under the surface strategy success that hasn't yet hit the top and bottom line unless they get more specific.. On the last call I did feel like they were stretching for a positive data point with the client retention # and it did feel like too much emphasis on a data pt that cant have much value unless viewed over a longer time horizon.
I will also say their 1% client increase from last qtr seems like it would be a huge disappointment to them given the names they have tried to bring on via their brands with fans strategy. hopefully will see better increase in active customer counts as 1% was pretty bad. they also indicated they would likely have some news on distribution deals in the second half of the yr so be nice to hear something there.
I think until they are able to show they can beat guidance consistently will be tough for some to hold through earnings. The results from 2 qtrs ago and the lack of forecasting ability just killed investor attitude toward the stock. The retail environment seems fairly weak, they continued to note textile issues on the last call and no insider buying. Absent something to change the narrative which the company hasn't produced up to this point its going to be hard to give the stock a bid. The tenor could change on the next earnings call if results and guidance improve and they offer some worthwhile commentary on the boston station, but for now the stock is stuck in the negativity of the prior mis-steps. I'm cautiously optimistic that the results will continue to show stabilization after that blow up qtr, although not sure I expect much in the way of meaningfully beating expectations or robust 4th qtr projections since they will need to be awfully conservative to ensure they dont #$%$ the bed again.. they are disclosing 10-12k new customers each week which should project better than the 1% customer growth they showed last qtr unless they are hemorrhaging old customers.
was there any confirmation that Wade Gerten left the co?
I believe after the electronics mess there was quite a bit of insider buying which was pretty good support for longs who felt they had a nice bounce back oppty due to easier comps vs the electronics qtr (s). It would be nice to have seen that now but we havent. Doesnt mean that is a bearish sign but it does mean mgmt hasnt provided a bullish sign which I would expect given how much lower the stock dropped vs where is was trading under previous mgmt.
Always have to be careful seeing value that insiders don't see. Of course, the mgmt team will be gifted lots of shares im sure (i think MB got 100k shares and nuce some lesser amt late last yr) so perhaps they dont feel the need to invest their own $. But, the stock has been well below where it was with the previous mgmt team and the current mgmt team has made no material insider purchases. May mean absolutely nothing, but it is worth continuing to note the lack of insider purchasing as folks try to project the growth of the business and boston station valuation.
nope not on the sidelines. they could very well show 10% growth. i could certainly be wrong about that and if so I wont be upset..trust me. could i see growth in the 5-8% range yes, but 10% seems a stretch to me given what they are trying to do.
ultimately none of us, unless there are employees on the board, know what is going on at this moment. we are all speculating. each week they are indicating 10,000+ new customers. last week it was 13,000. they are rolling out new brands some of which will undoubtedly catch on and hopefully fuel growth in upcoming yrs some positive changes appear to be happening.
it is pretty clear that i am bullish for a bounce back with the stock price over the short to intermediate term, beyond that i am far more uncertain.
so every word i write isn't glowingly positive so what. thats reality...its ok to acknowledge things aren't perfect and still be long! it really is.
well i dont see 10% growth anytime soon! i do see a bounce back from self inflicted wounds and perhaps the boston station gives the bounce some extra juice if they can sell it.
i do agree if they disappoint we are probably looking at sub $2.
generally agree although i doubt carriage goes down. they may get more for what they are paying but I'm not expecting savings there. HD, better channel placement, additional channels. all things they want and why we aren't going to see carriage per home drop (perhaps we get a short term drop but we will see it increase again just as happened with KS where they started to spend their initial savings on HD and better channel placement.
they dont have the resources or the staff to effectively differentiate. if they get a cash infusion I'm not optimistic that they can put it to use creating a differentiation strategy. i do think a copycat strategy can squeeze some juice out of what they have which would be good for shareholders over the next 1-2 yrs. beyond a sale after that I dont see much long term to be excited about unless the market can support 3 home shopping networks doing the same thing and each growing 4-8% (maybe it can and I'm simply too pessimistic about the viability of a replication strategy long term).. i think anyone investing in this company expecting any meaningful differentiation will be disappointed.
if they can show better results over the next cpl of quarters and they can get something meaningful for the station this stock will run nicely at which point its probably a good time to exit unless they show something that seems more viable long term.
Market is pretty much pricing as if there is little value. Perhaps information flow is inefficient, but my expectations are low. If they got 10-20mm that would be a nice non dilutive cash injection. If there is 40mm or more value the stock is going a lot higher, but given the collective opinion of the investment community there is little value for evine. Folks can obviously be wrong or miss the impact and I think the stock recovers without cash from the station so any value there is a bonus. Again harping on insiders..
if you were an insider and the stock was well below where it was a yr ago and you think new strategies are working and you were sitting on a future 50mm cash infusion what would you do? I would too, but insiders arent so we have to be careful thinking we are on a gold mine when the insiders dont even want to mine it. Perhaps they are all poor saps with no money to invest. Haha
If one thinks of managers of public companies to be mercilessly self interested as I tend to, you could envision a scenario where the team takes all the actions they know are going to kill the stock price before they buy. While I think a secondary at this pt is too costly they may not given limited personal holdings. Given the embarassment over the stock price debacle i would hope they arent going to add to the embarassment, by allowing performance or making strategic funding decisions that will send it on another leg down but there has been no real insider buying so you have to wonder why they don't believe a stock price well below where it was with the previous mgmt team is worth buying.
While they are clearly trying to be active broadening the offerings my guess is that they aren't attracting the eyeballs they hoped and hence we will hear more and more about channel placement and a second channel as the new key to growth.