|Bid||285.70 x 37900|
|Ask||285.85 x 75600|
|Day's Range||285.75 - 290.90|
|52 Week Range||197.25 - 317.45|
|Beta (5Y Monthly)||0.63|
|PE Ratio (TTM)||29.60|
|Forward Dividend & Yield||3.35 (1.16%)|
|Ex-Dividend Date||May 10, 2019|
|1y Target Est||N/A|
Shares of Under Armour (NYSE:UAA) plunged in early February after the struggling athletic apparel maker reported mixed fourth quarter numbers that included a dismal 2020 guide. Of note, while Under Armour's profits in the fourth quarter matched analyst expectations, management guided for just 13 cents in earnings per share in 2020 (at best), versus a consensus sell-side estimate of 46 cents.Source: Sundry Photography / Shutterstock.com That means Under Armour projects to earn less than 30% of what Wall Street thought the company would earn this year. Investors naturally freaked out in response, and UAA stock fell by 20% to its lowest levels in over a year.At this point in time, I think it's smart to play the contrarian and buy the dip in Under Armour stock.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMy rationale is simple. First, Under Armour's fundamentals are bad but not awful, and the company should keep growing. Considering that reality, shares seem undervalued here. * 7 Exciting Stocks to Buy for Aggressive Investors Second, the stock has formed formidable technical support at the $16 to $17 range over the past few years, and shares are presently closing in on those levels. And third, a big portion of the sell-off has to do with coronavirus anxiety, which ought to subside in the coming months.All in all, I like Under Armour stock on the dip. Over the next few months, I expect shares to find support around $16 to $17 and rebound back above $20. All is not LostUnder Armour's fourth quarter earnings report was bad and 2020 guidance was even worse. But all is not lost, and there are still plenty of things to like about this company.Sure, revenues rose just 4% in the fourth quarter, and are expected to drop by roughly 2% next year. That's not good. But Under Armour is still one of the four major players in the athletic apparel market, alongside Nike (NYSE:NKE), Adidas (OTCMKTS:ADDYY) and Skechers (NYSE:SKX). That market remains supported by secular adoption tailwinds. Granted, those tailwinds are stronger on the lifestyle side of the market, and less strong on the performance side (where Under Armour operates).Nonetheless, revenue erosion is unlikely to last beyond 2020, and market tailwinds coupled with easier laps will bring positive revenue growth back next year.Below the top-line, things actually aren't so bad. Gross margins rose by 230 basis points in the quarter amid supply chain enhancements and lower discounting. They are expected to rise another 40 basis points next year for the same reasons. Concurrently, while opex rates are rising, that's mostly because of sluggish revenue growth. Expenses rose just 2% in 2019. Continued moderate expense growth plus gross margin expansion lay the groundwork for profits to roar higher once revenue growth turns positive again.All in all, then, Under Armour is just getting stung by some near-term demand headwinds. These demand headwinds won't last. Once they pass, Under Armour will return to being a low single digit revenue growth and double-digit earnings growth company. Under Armour Stock is CheapAt current levels, there are two big things to like about Under Armour stock.First, the stock is cheap relative to the company's realistic earnings growth prospects. After this year, Under Armour should return to and sustain low single digit revenue growth, thanks to broader athletic apparel market tailwinds. Gross margins will keep moving higher as the company starts selling more into full-price channels and eases on discounting. Operating expense rates will compress as management maintains a ~2% expense growth rate.Putting all that together, from this year's projected 13 cents earnings per share base, Under Armour's profits will likely rise towards $1.25 by 2025. Based on an apparel retail sector-average 23-times forward earnings multiple and a 10% annual discount rate, that implies a 2020 price target for the stock of nearly $20.Second, the stock will find powerful technical support in the $16 to $17 range. Since early 2018, Under Armour stock has bottomed out at these levels several times, namely in April 2018, October 2018, December 2018, August 2019 and November 2019.It is fairly likely that shares once again find support at these levels. If they do, that means the worst of this sell-off is over, and the stock is due for a relief rally over the coming months. Bottom Line on UAA StockUnder Armour is struggling. These struggles will continue, but the valuation on Under Armour stock is cheap, and shares are running into multi-year technical support levels. As such, it makes sense to start buying the dip in Under Armour stock here. Over the coming months, it's quite likely that shares stabilize around $17 before popping back to $20.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Exciting Stocks to Buy for Aggressive Investors * 20 Stocks to Buy From the Law of Accelerating Returns * 7 U.S. Stocks to Buy on Coronavirus Weakness The post Play the Contrarian And Buy the Dip in Under Armour Stock appeared first on InvestorPlace.
(Bloomberg Opinion) -- Any new chief executive likes to make their own mark. For Patrik Frisk, who took the helm of Under Armour Inc. last month, there’s even more reason than most. While founder Kevin Plank has ceded the role of CEO, he’s staying around as chairman and brand chief at the maker of athletic apparel.At first glance, the surprise sales and profit warning that Frisk, who spent two-and-a-half years as chief operating officer, announced on Tuesday, looks like the last thing he would have wanted to unleash on investors during his first update. And that’s not all: Under Armour is also considering another restructuring,To be fair, some of the cut to revenue guidance is down to the coronavirus – a risk shared with rivals Nike Inc. and Adidas AG. But it is also due to a decline in sales in North America, where efforts to rein in discounting and concentrate on the style, fit and performance of apparel have taken longer to bear fruit. Profit estimates were also lowered: The mid-point of the $105 million to $125 million range would imply a halving of operating earnings from 2019, according analysts at Bernstein.The big downgrade is clearly unwelcome to investors, who may be forgiven for thinking they have been here before. The group has been restructuring, including cutting jobs, for the past three years. However, such a dramatic lowering of guidance does provides more leeway to try to fix the U.S. business, where more work is clearly needed, and potentially scope to outperform later on. There were some bright spots. Under Armour’s gross margin, which expanded by 1.8 percentage points in 2019, is forecast to widen by another 0.3 to 0.5 percentage point this year. Inventories are also falling, and the wholesale market is showing signs of stabilizing.Under Armour’s reduced outlook also paves the way for more cost-cutting. Taking an ax to expenditure could lead to savings of $30 million to $50 million in 2020, even though this could cost as much as $425 million in pre-tax charges. Of this, $225 million to $250 million relates to the possibility of foregoing opening a flagship store in New York. Pausing this project looks wise given the outlook. So Frisk may be erring on the side of caution as he takes the reins.But there’s still considerable uncertainty as to whether Under Armour’s strategy — focused foremost on performance rather than fashion — will pay off. Meanwhile, competition from Nike and Adidas isn’t getting any easier, with the latter pushing ahead with its collaboration with Beyonce. Add in a federal investigation into Under Armour’s accounting practices, and whether Plank will be able to relinquish some control and the outlook remains highly uncertain.After under-promising, Frisk has little choice but to over-deliver.To contact the author of this story: Andrea Felsted at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
At least four textile factories in Cambodia may suspend operations because of delays to the supply of raw materials from China caused by the coronavirus outbreak, the labour ministry said on Monday. Ministry spokesman Heng Sour said there had been delays in deliveries of garments, yarn, buttons and shoe soles. The garment industry is Cambodia's largest employer, generating $7 billion for the economy each year.
(Bloomberg) -- China’s consumer prices rose the fastest in more than eight years last month, with the outbreak of the coronavirus and subsequent shutdowns of transport links across the country making further gains in the coming months likely.Consumer prices rose 5.4%, with food prices jumping the most since 2008 in January. Even before the coronavirus, prices were likely to have risen sharply due to the normal spike in demand around the Lunar New Year and the effects of the African Swine Fever outbreak which has killed millions of pigs and damaged pork supplies. Pork prices gained the most on record.The dramatically worsening coronavirus situation in the last 10 days of the month exacerbated those factors and could prolong the high prices. That will not only hurt consumption domestically, but could push up prices globally, with extended shutdowns in China hurting supplies of various industrial goods and exported foods.“The virus outbreak has rewritten the supply and demand story in China, with supply staying at a relatively low level except for the medical sector and demand also falling,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp in Singapore. “Prices will likely continue to rise due to weak supply.”The fallout will also impact foreign companies with production or sales in China, and may well lead to rising prices for consumer goods in the U.S. and elsewhere if factories can’t restart soon.Apple Inc.’s main iPhone production partner has told employees at its Shenzhen facility not to return to work Monday when the extended Lunar New Year break ends, and its production resumption hinges on the government’s guidance.‘Nightmare’ for Global Tech: Coronavirus Fallout Just BeginningOther multinationals with footprints in China are already seeing disruptions. Nike Inc. closed about half of its company-owned stores in China and rival brand Adidas AG also said it has closed a significant number of stores in China, as a result of the outbreak, Bloomberg reported last week.The rise in CPI was mainly due to the Lunar New Year and the coronavirus epidemic, and also due to a lower base last year as the holiday was in February 2019, the National Bureau of Statistics said in a statement.What Bloomberg’s Economists Say...“Looking ahead, CPI inflation is likely to be volatile. The impact of the virus could cause prices of food, such as vegetables, to rise further. On the other hand, it could reduce household demand, sapping inflationary pressures.”\-- David Qu, Bloomberg EconomicsClick here for the full noteChinese farmers are feeling the pain as authorities have ordered shutdowns and road blockages in various cities and areas in an attempt to contain the spread of the illness. Roads to transport animal feed and farm products were blocked, leaving farmers to watch their poultry starve and farm products go bad.Sun Dawu, founder of Hebei Dawu Agriculture and Livestock Group, wrote on Weibo on Jan. 30 that his company had to “dispose” of about 5,000 kilograms of fresh eggs and 40,0000 baby chickens on a daily basis, because “we aren’t able sell these, and even if we managed to sell to merchants, they dare not trade livestock.”“The animal feed and animal farming industries are about to get burnt,” he said in another post on Weibo, China’s equivalent of Twitter, on Feb 4.Right now the main problem his company is facing is road blockages, according to a company manager called Yang, who only gave his last name. “It has got better, but there are still some extremes cases where our trucks aren’t allowed to exit highways or enter villages,” he said Monday via phone.Blockages ForbiddenThe issue was so bad the Ministry of Agriculture was forced to intervene, last week ordering people not to intercept vehicles transporting animal feed and live animals, not to close slaughterhouses, and not to block village roads.Taobao, one of China’s biggest e-commerce platforms owned by Alibaba Group, has launched a campaign called “Foodies Help Farmers” to promote the sale of products from kiwi fruits to asparagus which have been disrupted. “Don’t let fruit and vegetables rot on the farms,” is the slogan.The faster inflation is benefiting some agricultural companies, at least in the short-term. The stock prices of Beijing Dabeinong Technology Group Co. and Heilongjiang Agriculture Co. both hit the 10% daily upside limit as of 11:14 a.m. local time, while Muyuan Foodstuff Co. jumped 8.2% and Wens Foodstuffs Group Co. climbed 5.5%.“After the virus is contained and lockdown measures are lifted, demand will likely recover more quickly than supply, which may be more or less delayed by a potential disruption of supply chains, resulting in rising CPI inflation,” Lu Ting, Nomura Holdings chief China economist, wrote in a report to clients last week.(Updates with impact on companies from fifth paragraph. The comment of an economist was corrected in an earlier version of this story.)\--With assistance from Tomoko Sato, Yinan Zhao, Miao Han and Ken Wang.To contact Bloomberg News staff for this story: Lin Zhu in Beijing at email@example.comTo contact the editors responsible for this story: Jeffrey Black at firstname.lastname@example.org, James MaygerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
German sportswear company Adidas on Wednesday said it was temporarily shutting a "considerable" number of its stores in China due to the coronavirus outbreak. Adidas has about 12,000 outlets in China, including franchise stores. Adidas saw sales growth slow to 11% in China in the July-September period from 14% in the second quarter.
GENEVA/BEIJING, Feb 5 (Reuters) - Thousands of passengers and crew on two cruise ships in Asian waters were placed in quarantine for China's coronavirus on Wednesday as airlines, carmakers and other global companies counted the cost of the fast-spreading outbreak. A multinational WHO-led team would go to China "very soon", it added. China said another 65 people had died in the previous 24 hours, in the highest daily total yet, taking the overall toll on the mainland to 490, most in and around the locked-down central city of Wuhan, where the new virus emerged late last year.
World Athletics announced significant changes to its rules on Friday that will outlaw some variants of Nike's Vaporfly running shoes and introduce strict limits to the technology developed for any future shoes used in elite competition. The sport's governing body said that with immediate effect, road shoes must have soles no thicker than 40mm and not contain more than one rigid, embedded plate. The Vaporfly shoes used by Eliud Kipchoge to run the first sub-2 hour marathon and by fellow Kenyan Brigid Kosgei to smash the women's marathon world record both contained triple carbon plates.
A lawyer for Michael Avenatti told a jury that Nike Inc was being probed by the U.S. Securities and Exchange Commission (SEC) over claims that it made illicit payments to elite youth basketball players, Bloomberg reported on Wednesday. The SEC investigation on Nike was confirmed by Scott Wilson, a former lawyer who represented Nike, on the witness stand, Bloomberg said https://www.bloomberg.com/news/articles/2020-01-29/nike-being-probed-by-sec-on-illicit-payment-claim-jury-told.
Adidas will launch new fabrics made from recycled polyester and marine plastic waste and expand the product lines that use them after the success of shoes made with the Parley for the Oceans initiative, the sportswear firm said on Tuesday. Adidas first teamed up with Parley in 2015 and gradually ramped up production of shoes using plastic collected on beaches and coastal regions to make more than 11 million pairs in 2019, still only a fraction of a group total of more than 400 million. The Ellen MacArthur Foundation, a charity that promotes shifting the economy to a circular model that eliminates waste, says less than 1% of material used for clothing is recycled, a loss of more than $100 billion worth of materials each year.
World Athletics expects to announce the findings of a review into technology used in road and track shoes by the end of January. Recreational runners' use of the flourescent footwear will be unaffected, World Athletics said.
When it comes to the big business of selling athletic shoes and other gear, Foot Locker is falling behind in the race, say analysts at Susquehanna Financial Group, who downgraded shares on Friday. Analysts Sam Poser and Will Gaertner cut their price target on Foot Locker to $41 from $47. While 2019 delivered a 28.9% gain for the S&P 500, Foot Locker shares dropped 31%, a decline that came as the returned about 3.7%.
Barring any unusually negative events, the major U.S.-based indices like the Dow Jones or the S&P 500 will likely close at or near record highs. Based on the robust momentum that American blue chips have demonstrated, the temptation is to stay the course. However, compelling arguments exist to consider shifting your portfolio toward international stocks.First, U.S.-based equity indices have already charted multiple years of remarkable growth. Although that in and of itself is no guarantee that they'll correct, at some point, the odds work against them. After all, markets tend to work in cycles. And as domestic valuations rise, astute investors will look at other sectors for superior growth opportunities. Overlooked international stocks may be that ticket.Second, not only have our benchmark indices skyrocketed, they've consistently dominated the broader performance of international stocks. Since the beginning of the decade, the S&P 500 has largely moved to ever higher plateaus. In comparison, the rest of the world - including viable emerging markets - have flatlined. Based on cyclical probabilities, the capital return potential is higher with global names.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFinally, the Trump administration is facing its toughest domestic challenge (aside from the impeachment hearings) in 2020. Of course, I'm referring to the general election. Given that the President isn't exactly killing it in public opinion polls, the economy is crucial. A good one may secure a second term but a bad one will cripple his chances. * 7 Vaping Stocks to Get into Ahead of the Crowd Therefore, the White House has every incentive to cool its "law and order" agenda. And that may bode well for international stocks, especially considering the recent limited trade deal between the U.S. and China.With that, here are seven international stocks worth considering for the new year: International Stocks Worth a Visit: Sony (SNE)Source: Sundry Photography / Shutterstock.com For many years, international stocks originating from Japan have been an afterthought. As you know, the country has a litany of economic and social challenges that make it unattractive to conservative investors. But Japan's flagship company Sony (NYSE:SNE) has really bucked expectations. On a year-to-date basis, SNE stock is up over 43%.That said, the natural reaction is to question whether such momentum is an anomaly. To be fair, its performance over the past several years have been stilted and generally unconvincing. However, the consumer tech firm's release of the PlayStation 5 at the end of 2020 should help sustain momentum in SNE stock.While naysayers may criticize video games as being threatened by streaming alternatives, I'm not convinced. The reason is that you can substantial computing power in a physical console. And with graphics processors having improved significantly since the predecessor PS4 debuted, the PS5 should be groundbreaking. Therefore, don't give up on SNE stock just yet! Japan Airlines (JAPSY)Source: Shutterstock Typically, I don't like putting speculative names up high on my gallery slides. However, I'll make an exception for Japan Airlines (OTCMKTS:JAPSY). Unlike other major airliners like Delta (NYSE:DAL) or United Airlines (NASDAQ:UAL), JAPSY stock does not have an upward bias. Instead, shares have undulated like a roller coaster over the past five years.However, JAPSY stock may be on the upswing, possibly in the next months ahead. Tokyo will host the 2020 Summer Olympics, bringing the city and Japan into the global limelight. Furthermore, Japan already hosted the 2019 Rugby World Cup. This was not only another showpiece for the nation, but it served as a test for the infrastructural demands that will come as an Olympics host. * 10 Best Stocks to Buy and Hold Forever Obviously, the Olympics will lure millions of visitors, which is an opportunity for JAPSY stock. Plus, the country ranks among the most popular destination spots for tourists. Therefore, the chance for recurring tourism business is quite high. Adidas (ADDYY)Source: 2p2play / Shutterstock.com Among the strongest international stocks this year has been German athletic apparel maker Adidas (OTCMKTS:ADDYY). Since January's opening price, ADDYY stock has skyrocketed 53%. However, fears of a European consumer slowdown and a possible recession took the wind out its sails. But with improving relations between the U.S. and China, the Atlantic consumer may just bounce back.In such a circumstance, it would bode well for ADDYY stock and not just for broader geopolitical reasons. Instead, from the angle of its core industry, Adidas has many untapped opportunities to advantage. Better yet, management has a long-term plan to address these opportunities. For instance, the company has teamed up with singer Beyonce to launch a collection of gender-neutral shoes.Furthermore, Adidas' venture with Beyonce helps close the gap with Nike (NYSE:NKE) regarding female-consumer market share. The deal may also boost the German company's profile in Europe and China, where Nike has led in growth rate. Deutsche Post (DPSGY)Source: Shutterstock Millennials love the environment. In fact, their passion for going green extends so meaningfully that companies are actively adjusting to their demands. A company that can possibly benefit from this emerging culture and shifting mores is Deutsche Post (OTCMKTS:DPSGY). Since hitting all-time highs in early 2018, DPSGY stock has come down significantly.However, momentum could shift to the upside for 2020. Primarily, DPSGY stock has a catalyst in subsidiary company StreetScooter, which Deutsche Post acquired in December 2014. An electric vehicle manufacturer, StreetScooter specializes in eco-friendly delivery vehicles. In 2020, DHL, also under the Deutsche Post corporate umbrella, will launch zero-emission EVs in the U.S. * 7 Safe Dividend Stocks for Investors to Buy Right Now Over the past several months, I've been skeptical of the mass integration of alternative energy vehicles due to infrastructural requirements. But with individual entities, it might work out. Modern American metropolises are actively seeking ways to reduce emissions. With Deutsche Post's green focus, DPSGY stock just might see some green itself. TAL Education Group (TAL)Source: Shutterstock One of the characteristics of Asian companies is their emphasis on longer-term strategies over immediate gratification. As Harvard Business Review points out, Toyota's (NYSE:TM) patient, forward-looking approach contributed to its modern-day successes. This is one of the key reasons why I like TAL Education Group (NYSE:TAL) and TAL stock.Most lists of international stocks that have exposure to China will include the obvious names like Alibaba (NYSE:BABA) or Tencent (OTCMKTS:TCEHY). Certainly, these names have skyrocketed thanks to the thawing of the ice between the U.S. and China. However, keep in mind that TAL stock moved substantially higher well before the limited trade agreement.Why? As an after-school tutoring program, TAL stock is a bet on China's future generation. In terms of international stocks in China, I think this is a more reasonable bet. Virtually all Asian countries prioritize education, aligning with cultural and societal expectations. Thus, trade war or not, TAL has a bright future. Autohome (ATHM)Source: Shutterstock Without any recent context, China's Autohome (NYSE:ATHM) appears as a no-brainer investment among international stocks. First, ATHM stock is levered to the world's biggest automotive market. Second, Autohome specializes in providing automotive information to consumers.However, China's auto market has worryingly contracted this year. As a result, ATHM stock took a beating after peaking in the spring season.Still, the biggest catalyst for the organization is obviously the limited trade agreement. It sets the stage for a more meaningful deal later. Furthermore, the Trump administration can't afford to roll the dice with the economy. Thus, ATHM stock may enjoy some upside due to a reinvigorated consumer base. * 5 Great Year-End Financial Planning Moves One other point to keep in mind: China's car market is incredibly diverse. For instance, unlike Japan, Chinese consumers love American cars. Therefore, with so much product diversity, the demand for Autohome will likely only increase. Norilsk Nickel (NILSY)Source: Shutterstock At least in the western world, Russia isn't a very popular country. But Norilsk Nickel (OTCMKTS:NILSY) demonstrates why you can't let your emotions dictate your investing decisions. Although NILSY stock is risky because it's Russian and a mining company, it should rank highly in your list of international stocks to buy.That's because Norilsk is one of the biggest producers of the precious metal palladium. A key metal in terms of emissions control and various technologies, palladium is incredibly rare. Thus, despite the rocky geopolitics surrounding Russia, NILSY stock is an absolute screamer. On a YTD basis, shares are up 70%.Because of its rarity and incredible demand, I don't think palladium will come down meaningfully. Seemingly out of nowhere, palladium became the most expensive precious metal, exceeding the gold price by a few hundred bucks. Until we see a paradigm shift again in the commodities market, the future looks bright for NILSY stock.As of this writing, Josh Enomoto is long SNE, palladium and gold. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Vaping Stocks to Get into Ahead of the Crowd * 5 Retail Stocks That Are Winning Big This Holiday Season * Make the Shift Toward Value Stocks With These 5 Picks The post 7 International Stocks Worth a Visit appeared first on InvestorPlace.
Nike Inc's quarterly revenue and profit blew past Wall Street expectations on Thursday on strong sales in China, but lower-than-expected growth in North America, its biggest market, overshadowed the beat. The world's largest footwear maker faces intense competition from brands like Adidas, Skechers and VF Corp's Vans in North America, even as it pushes to sell exclusive merchandise through its tap-and-buy SNKRS app and retail stores. In its attempt to gain market share over rivals, Nike has collaborated with celebrities, ramped up sneaker launches and increased marketing around major sporting events.
Adidas will start selling a new collection designed with singer Beyonce on Jan. 18 in a relaunch of her Ivy Park brand that includes shoes, clothes and accessories, mostly in maroon, orange and cream. Adidas described the collection, which features on the cover of January's Elle magazine, as gender neutral. It includes jumpsuits, cargo pants, hoodies and cycling shorts, mostly featuring signature Adidas triple-stripes.
(Bloomberg Opinion) -- Billionaire Mike Ashley has unpacked a haul of good news from his giant Sports Direct bag, the first investors in the sportswear-to-statement jacket empire have enjoyed for a while.After a dismal showing in July — when Sports Direct International Plc first delayed its full-year earnings statement, and then accompanied it with news it faced a surprise tax bill in Belgium potentially worth 674 million euros ($750 million) — the bar for doing better was pretty low.But the group seems to be stabilizing after the tumultuous period in the wake of its acquisition of the troubled House of Fraser department store chain in August 2018.For now, Sports Direct hasn’t split out House of Fraser’s sales and profits. Instead, the storied British chain has been lumped in with the premium lifestyle division, which includes the upmarket Flannels boutiques. In the half year to Oct. 27, the unit made a loss on an underlying Ebitda basis of 5.6 million pounds, compared with a deficit of 29 million pounds in the year-earlier period.This implies House of Fraser’s losses shrunk noticeably. Tony Shiret at Whitman Howard estimates the loss at about 10 million pounds, compared with 31.5 million pounds previously.This all led Ashley to declare “green shoots of recovery” at the department store. More importantly, he also had good news for the outlook. The company now expects full-year underlying Ebitda of between 356.4 million pounds and 390.3 million pounds. That’s up by between 5% and 15% — the range the company has historically targeted — from 339.4 million pounds in the year to April 2019, excluding House of Fraser.Ashley also provided reassurance on the Belgian tax bill, saying that it won’t be such a big problem after all, and should not lead to a material charge. Finally, a 120 million-pound sale and leaseback for Sports Direct’s Shirebook campus has helped to halve net debt, which had been ratcheting up.The shares rose as much as 27%. But investors shouldn’t get too ahead of themselves. First of all, there is still work to do at House of Fraser. While the group will move forward with a number of stores under the Frasers banner — also the new name for Sports Direct — more outlets will close. Sports Direct must also convince the luxury brands to back his Frasers vision, although this should receive a boost from the Flannels offering. Brands such as Burberry Group Plc were much in evidence at Flannels’ new flagship on London’s Oxford Street.While much attention has focused on House of Fraser, it and Flannels are still a small part of the group. It is the core Sports Direct sportswear stores that drive the performance. Here sales, excluding acquisitions, fell 8.6%, as Sports Direct took the division upmarket. Revamped stores are performing well, and selling more expensive items, together with less discounting, is bolstering margins. But the group can’t let up the pace of these refurbishments. Ashley will have to convince the big sportswear brands, Nike Inc. and Adidas AG to supply it with their hottest sneakers, just at a time when Nike is becoming more choosey about who it sells to.And let’s not forget the risk of impulsive action from Ashley himself. The strategy of taking advantage of others’ misery by acquiring brands to sell in his stores is a sensible one. But the dangers of overstretch, as well as unconventional corporate governance moves, are ever present.Compared to this time last year, Sports Direct has things under more control. Investors will be looking out to see if the same can the same be said of its unpredictable founder.To contact the author of this story: Andrea Felsted at email@example.comTo contact the editor responsible for this story: Melissa Pozsgay at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Shoemaker Skechers USA Inc is expected to post earnings growth on pace with Nike Inc over the next three years, giving its relatively low valuation a chance of catching up, financial newspaper Barron's reported in its Dec. 7 edition. Analysts estimate Skechers' earnings-per-share will rise 15% this year and in 2020, and 12% in 2021. Skechers sells trainers, dress shoes, sandals and boots - a broader range than Nike - and has grown over the past 20 years to become the third-largest global footwear brand by revenue, after Nike and Adidas AG, the paper said.
Dicks Sporting Goods (NYSE: DKS ) shares skyrocketed after the retailer delivered a big third quarter earnings beat on Tuesday. The company reported a 6% comp gain, its strongest same-store sales since ...
Foot Locker, Inc. (NYSE: FL ) reported a third quarter earnings beat on Friday, but a sales miss sent shares plunging. The Analyst and Rating Cowen analyst John Kernan reiterated a Market Perform rating ...
Yoda taught us that a Jedi must have the deepest commitment, the most serious mind. But good shoes can't hurt. For that, Adidas AG (OTC: ADDYY ) in collaboration with Walt Disney Co.'s (NYSE: DIS ) Lucasfilm, ...