quirky reaction to an unambiguously good earnings report. the company reported +7.8% comp for past quarter and then again double digit increase for first 3 weeks of new quarter. but in interests of conservatism, they stated they are sticking with their mid single digit comps gain for the new quarter despite the strong start, citing tough comps vs. last year. Conservative stance which then undoubtedly led to lousy stock action last friday. oh well if the Company continues to perform like this, $70 per share seems a foregone conclusion by the end of August!
i saw that dumb comment from Credit Suisse also..."looking for a better entry point"...wow that guy must have a Harvard MBA. In other words he likes the stock but wants it to go down first...wouldn't we all? But maybe because they wield influence they write something like that, the stock goes down and then they buy it...a pretty self-serving approach but that's the way Wall Street seems to work these days!!
so their take as of a month ago was that there was margin pressure on the upper end. This is contradicted by EVERY single statement on today's conference call. One wonders who the "industry sources" they cited were in their grim assessment with a price target of $47 per share. Hey Goldman what was the sourcing on this story which you failed to reveal?
the question is who are these industry sources...I am not comfortable with stories which do not cite specific sources. as I said everything I had read was that retail experts were saying FL was looking like a big holiday winner during December and their new product launches were lining up very well. also how can Barclay's come up with a $70 price target a few weeks after Goldman says the sky is falling and $47 price target looks realistic...are they hooked up to the same sources of information?
plus in the past ten days Barclays came out with upgrade and $70 price target -- flying directly in the face of the Goldman take on things. Go figure!!
I dunno....even when they came out with a stellar earnings report back in November they (FL) took a hit. Then FINL came out with a lousy report but they admitted they were too reliant on running and also that they had mismanaged their inventory, which FL took great pride in their conf call in saying they managed that well. The lousy price action seems to be a continuing overhang from the Goldman downgrade which set a price target of 47..In their cryptic note, Goldman talked about 'industry sources' saying the high end shoes were meeting new price resistance. To the contrary, everything I had heard was that the kids were willing to pay up, that gas prices were down and that the high profile launches of basketball shoes in December were very successful. During the peak of holiday sales Dana Telsey retail surveyor extraordinaire and all the shopping monitoring services were saying FL was shaping up to be a big winner during the holiday season and I have no reason to think that's not true. . On the other hand Ken Hicks was beloved internally and by the Wall Streeters and the new guy #$%$ Johnson is kind of grey and hasn't had an opportunity to establish his own reputation...so I dunno. Next catalyst will be the conf call in early march and FL's strategic unveiling in same timeframe. I also wonder if some private equity firm might not have an interest in this company with no debt, good margins and excellent relationships with Nike.
90 cents whisper. i am thinking 1.00 because hicks is leaving presumably on a hi note. also wondering if and when lorna jane buyout will be announced, fl was in bid finals but no resultvever announced. ken hicks was a behemoth and johnson the heir apparent. all i read is how great things are going. so i am bullish ceos dont leave in such cases but on a high note. ted williams homered in his last game too!