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the question is who are these industry sources...I am not comfortable with stories which do not cite specific sources.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!
Advent International now out of the running on Lorna Jane as after-hours report today confirms they are buying big stake on Lululemon and putting 2 of their people on Lulu Board of Directors. So that leaves Under Armour and FL. Under Armour has 1/4 FL's profit but 2x their market cap. Still their cash position only $300mm whereas FL has $1 billion in cash. Looks like FL will be the new owner of Lorna Jane. FL can offer to switch their Lady and SiX:02 formatted stores to Lorna Jane and triple or quadruple Lorna's current number of retail outlets. FL desperately needs a sales catalyst for its Lady business and Lorna Jane would give them that, hopefully the acquisition will be accretive and hopefully Lorna jane will be able to taylor her message to US female audiences. For its part, FL can manage the business better than Lorna Jane has been able to do, and Ken Hicks is a pretty good salesman for how, together, the deal can be a win-win for both sides
I see it's coming down to FL and Under Armour. FL needs the acquisition badly to boost its Lady FL and SIX:02 stores and reinvigorate them. Looks like owners want to retain equity stake and want to be active in spokesperson roles. That is good as FL needs a face for the new chain. I have read on various blogs Lorna Janes comes across as arrogant with a preachy story line and also lousy returned goods policy. If they are open to change these aspects then I think this could really be the catalyst needed for their expansion under FL banner. Not sure if Lorna Jane and her husband have big egos or are high maintainance, but if their attitude is right then I think it could be a match made in heaven! Go FL and go Ken Hicks!!!!!
I like the idea. The Lady needs a pick me up and the sports apparel is what is needed. Lulu is too pricey an acquisition but this looks plausible plus this is a leading Aussie personality and everything Aussie over here seems to do well e.g., Crocodile Dundee and Outback Steakhouse. The Six:02 thing can only go so far without some new product and I am liking the "Lady Lorna" possibility. Not sure how much they would have to payup but it appears private equity also interested in it. FL has some $800 million in cash thanks to prudent expense mgmt. and good overall financial mgmt. So I am heartened by the news. Plus Lorna jane is alive and well and apparently a good spokesperson for her brand so her reputation, combined with her Aussie accent and Malibu type appeal could be just what the doctor ordered. FL has a good record recently on acquisitions as the Runners Group thing in Germany gave them a better European presence and was cost effective. Any thoughts???