For Immediate Release
Chicago, IL – June 29, 2012 – Zacks Equity Research highlights Zumiez, Inc. (ZUMZ) as the Bull of the Day and Tiffany & Co (TIF) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Liberty Interactive Corporation (LINTA), HSN, Inc. (HSNI) and ValueVision Media Inc. (VVTV).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Continuing with its store expansion and e-commerce strategies, Zumiez, Inc. (ZUMZ) once again reported better-than-expected quarterly results. Zumiez posted earnings of $0.14 per share for first-quarter 2012 that beat the Zacks Consensus Estimate of $0.11 and increased over two-fold from the year-ago quarter earnings of $0.06.
Moreover, driven by a 12.7% growth in comps, the company's top line surged 22.7%. We believe the recent deal to acquire Blue Tomato will provide Zumiez broader avenues to strengthen its international base. Assuming it would fully acquire the company by July 1, Zumiez raised its second-quarter sales guidance in the range of $134 - $136 million, inclusive of nearly $2 million in sales from Blue Tomato.
However, the company kept its earnings per share guidance unchanged at $0.04 to $0.06, inclusive of the acquisition related costs and expenses. Currently, we are maintaining a long-term Outperform rating on the stock.
We recently downgraded our recommendation on Tiffany & Co (TIF) to Underperform following its first-quarter 2012 results. The quarterly earnings of $0.64 per share missed the Zacks Consensus Estimate of $0.69, and fell from $0.67 earned in the prior-year quarter, in spite of posting 8% growth in the top-line.
The disappointing bottom-line result was a reflection of murky performance in the Americas region due to soft demand for jewelry. Given the lower-than-expected results and sluggish economic recovery, management trimmed its fiscal 2012 sales and earnings outlook. Tiffany now anticipates 7% to 8% growth in total net sales, down from 10% predicted previously. Management now projects earnings in the range of $3.70 to $3.80 per share, down from $3.95 to $4.05 forecasted earlier.
The stock is also trading at a discount to the peer group, based on forward earnings estimates. Our target price of $48.00, 12.9X 2012 EPS, reflects our Underperform view.
Latest Posts on the Zacks Analyst Blog:
QVS Plans to Offer Senior Notes
QVC Inc., a wholly owned subsidiary of Liberty Interactive Corporation (LINTA), has announced to offer senior secured debts and expects to generate net proceeds of $500 million. We believe that the proceeds from the senior debt will be used to partly reduce the company’s high leverage position.
The senior debt is expected to carry an interest rate of 5.125% and is due for payment in 2022. The debt issuance is backed by the same collateral which secures QVC’s existing and future credit facility. The notes will be offered only to qualified institutional buyers outside the U.S. who are exempted from the registration requirements of the securities act.
Liberty Interactive Corporation exited the first quarter of 2012 with an enormous amount of long-term debt. The company has $6,183 million of outstanding debt and further issuance of debt could raise its debt position. At the end of the first quarter of 2012, Liberty Interactive had 2,137 million of cash and marketable securities. Going forward, the mounting interest will lead to higher interest payment for the company, thus impacting its liquidity position.
QVC, the most prestigious unit for Liberty Interactive, is the undisputed market leader in the $8 billion TV home-shopping business. Currently, QVC commands an estimated 69% market share, far ahead of its nearest rivals, HSN, Inc. (HSNI) and ValueVision Media Inc. (VVTV) and others. It is expected that QVC will continue to leverage its brand to rapidly grow its internet operations. Exposure to international markets, such as Japan, Germany, Italy, and the U.K. will enable QVC to achieve a higher rate of growth.
QVC is gradually expanding its presence in these developed markets. However, expansion in these markets requires continuous investment. We believe that the company is issuing this senior debt to continue its expansion plans and at the same time pay back its existing credit obligations. Standard and Poor's Rating Services has issued a ‘BBB’ rating for the senior debts as they believe that the company will continue to perform steadily over the intermediate term.
We are maintaining our long-term Neutral recommendation on Liberty Interactive Corporation. Currently, Liberty Interactive Corporation has a Zacks #3 Rank, implying a short-term hold rating on the stock.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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