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Gordmans Stores Downgraded to Sell

Zacks Equity Research

On Mar 28, 2013, Zacks Investment Research downgraded Gordmans Stores, Inc. (GMAN) to a Zacks Rank #5 (Strong Sell).

Why the Downgrade?

Gordmans Stores has been witnessing sharp downward estimate revisions after the company reported disappointing fourth-quarter fiscal 2012 results and cited a soft start to fiscal 2013.

This department store retailer declared results on Mar 25, 2013, wherein earnings of 41 cents a share fell sharply by 22.6% from 53 cents earned in the prior-year quarter. However, quarterly earnings managed to exceed the Zacks Consensus Estimate of 36 cents. For fiscal 2012, earnings came in at $1.21 per share down 6.9% from $1.30 delivered in the prior year due to higher costs.

Net sales of $202.5 million fell short of the Zacks Consensus Estimate of $207 million, but it increased 9.4% from the year-ago quarter. Comparable-store sales dropped 4.1% compared with an increase of 2.1% witnessed in the prior-year quarter.

Sluggish comps growth and a challenging economic environment remain a drag on the quarter. Consequently, we are witnessing a fall in the Zacks Consensus Estimates. The Zacks Consensus Estimate for the first and second quarters of fiscal 2013 dropped 72.7% and 20%, to 12 cents and 16 cents a share, respectively, over the past 7 days.

Moreover, for fiscal 2013 and 2014, the Zacks Consensus Estimate fell by 21.9% and 21.8% to $1.07 and $1.29 per share, respectively, over the same time frame.

Other Stocks to Consider

Not all stocks in non-food retail, wholesale sector are performing as disappointingly as Gordmans Stores. Other stocks worth considering include Lumber Liquidators Holdings Inc. (LL), Macy’s, Inc. (M) and Cabela’s Incorporated (CAB), all of which carry a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on GMAN

Read the Full Research Report on M

Read the Full Research Report on LL

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