Consumer
| Today's Consumer Stories | |
|
News and Views
|
Macro/Technicals
|
Active Names
|
Earnings
|
Sector News, M&A, Capital Raises
|
Research Away
|
Cantor Research
|
Top Events/Earnings Calendar
|
Cantor Flows
|
|
News and Views
The DOE met yesterday on gainful employment as the space will remain volatile. The meeting did not reveal anything new, but tomorrow the DOE will release repayment rate data by school and other data sets that should give the information needed to analyze the potential impact of the proposal on all schools. Consumer Discretionary was hard hit and the Office Sully retailers were among the weakest as back to school is sluggish and had OMX, SPLS, and ODP all down considerably. KSS beat by .02 but provided poor guidance and that should weigh on the Department Stores.
Macro/Technicals
SPX: 1089.47; -2.82RLX: 405.85; -2.02
XLY: 31.22; -2.62
XLP: 26.84; -1.65
VIX: 25.39; +13.50
Leaders: M, SUSS, NFLX, DUCK, IPSU, LNCE
Laggards: ZLC, ACAT, DEST, ODP, LIZ, ZQK, OMX
Active Names
Consumer Staples: GAP, GMCR, JJSF,
Consumer Discretionary: AMZN, FRED, LF, NEXC, ORLY
Consumer Services: ABTL, ACTG, EDMC, ZZ
Earnings
KSS
Kohl's reports Q2 EPS $0.84 vs Reuters $0.82 ($47.78)
Company previously reported revenues of $4.10B
- Guides Q3 EPS to $0.57-0.63 vs Reuters $0.74. Guides Q3 total sales to increase between 4.5 and 6.5%; comparable store sales to increase 2 to 4%; and gross margin as a percent of sales to increase 20 to 40 basis points over last year
- Guides Q4 EPS to $1.51-1.59 vs Reuters $1.56. Guides Q4 total sales to increase between 4.5 and 6.5%; comparable store sales to increase 2 to 4%; and gross margin as a percent of sales to increase 20 to 40 basis points over last year.
- Guides full year EPS to $3.57-3.70 vs prior $3.57-3.75 vs Reuters $3.75.
CACH Cache reports Q2 EPS
$0.07 vs Reuters $0.07 ($5.22)
Company reports revenues of $56.6M vs Reuters $60.2M.
AAP Advance Auto Parts reports Q2 EPS $1.16 vs Reuters $1.03 ($51.86)
- Reports Q2:
- Revenues $1.42B vs Reuters $1.41B
- Q2 comps were +5.8% vs SA consensus +5.6%
- The company's gross profit rate was 50.4% of sales during Q2 as compared to 49.3% during Q2 last year.
- The company's board today authorized a $300M share repurchase program. This new authorization replaces the company's $500M share repurchase program authorized in February 2010, which had $44.5M remaining
- Guides 2010 EPS to $3.70-3.80 vs Reuters $3.58
EDMC Education Management reports Q4 total enrollment 138.8K vs year-ago 112.7K ($12.75)
- Same-school enrollment was 137.1K vs year-ago 112.7K.
- Q4 EBITDA was $142.2M vs year-ago $100.5M.
- Guides Q1 EBITDA $112-118M vs Reuters $113.0M; net income $30-33M; EPS $0.21-0.23 vs Reuters $0.22.
- Guides f11 capex to 5% of net revenues vs 7% in f10.
- Guides calendar year 2010 EBITDA $636-647M; net income $251-257M; EPS $1.75-1.79 vs Reuters.
- Excluding the expenses related to the debt repurchase, corporate restructuring and reversal of an uncertain tax position liability, guides calendar year 2010 EBITDA $642-653M; net income $238-244M; EPS $1.66-1.70.
- Because the final language regarding gainful employment is not expected to be announced until the fall, any potential impacts of the rule are uncertain at this time. The company is therefore only providing guidance through calendar year 2010.
ARCL
Archipelago Learning reports Q2 EPS $0.10, including EducationCity contribuiton ($9.91)
Reuters consensus is $0.08. Company reports revenues of $13.6M
vs Reuters $13.4M, and adjusted EBITDA increased 30% to $7.8M.
- Guides f10:
- EPS to $0.34-$0.38 vs Reuters $0.36
- Revenues to $58-$62M vs Reuters $58.9M
- Total schools of 35,000 to 38,000
Sector News, M&A, Capital Raises
BKS
Barnes & Noble near deal with Yucaipa to avoid proxy fight - NYT ($14.48)
People briefed on the matter say a deal may be reached tonight
(11-Aug), but if it isn't, then 19% shareholder Ron Burkle's investment vehicle
might file materials for the fight in the morning. The sources say an agreement
may involve allowing Burkle to add three members to the company's board, which
currently has nine members, in exchange for his agreeing not to start the proxy
fight and withdrawing his lawsuit against the company. Barnes and Noble will
probably cover some of Yucaipa's $10-15M legal fees. One source says any
agreement will probably allow Yucaipa to bid for BKS. Burkle filed his lawsuit
6-May.
NYT discusses need for
bricks-and-mortar book chains to reinvent themselves
The summary article contains little that would surprise anyone
who hasn't spent the past few years in a cave. Ebooks, as they becomie more
popular, are altering consumer behavior away from the traditional means of
buying books, which involves going into a store, taking a book off the shelf,
and flipping through it before deciding whether or not to purchase it. The
change threatens publishers, since it seems it probably reduces the chances
that someone will buy a book they have never heard of, but happened to see in
the store. The CEO of Simon & Schuster (CBS) says anything, including toys
and games, that brings people into bookstores gets her approval. In an
interview, Barnes & Noble (BKS) CEO William Lynch says the company's ebook
business is nine months ahead of what it had anticipated.
PG
Now is not the time to buy Procter & Gamble - WSJ ($60.27)
A "Heard on the Street" column says the recession
has caused the company to cut prices on the premium products it relies on, and
also to introduce cheaper products. The strategy shift may protect volumes for
now, but it will also cut into the company's profits. The profit decline will
get worse if consumers trade down. Under these circumstances, it seems more
appropriate to view PG's trading at 15.3 times forward earnings as a premium to
the S&P 500's 12.3 times than it is to view it as a discount to the
more-than-20 times that PG traded at before the financial crisis.
ACTG
Acacia subsidiary enters into settlement and license agreement with
MapMyFitness
($13.97)
Acacia Research announced that its subsidiary, WebMap
Technologies has entered into a settlement and license agreement with
MapMyFitness. The agreement resolves litigation that was pending in the United
States District Court for the Eastern District of Texas, Civil Action No.
2:09-CV-00343-DF-CE. This patented technology generally relates to aggregating
and expressing geographically linked data on interactive internet maps. This
technology can be used to place geographic locations and associated data on an
interactive map, and also to search geographic locations on the interactive map
and return geographically-referenced data from one or more users.
TIVO
Cox Communications to promote, support TiVo's new HD-DVR in major markets
starting next year - Light Reading ($8.33)
Cox will integrate its video-on-demand service and allow the
boxes to take streaming videos from TiVo's existing partners including Netflix
(NFLX) and Amazon (AMZN). Cox will pay expenses related to installations of
TiVo Premiere boxes; other terms are not revealed.
Research Away
ARO Aeropostale downgraded to neutral from buy at Sterne, Agee
Cantor Research
Click the followg link for Pado’s Perceptions and the Cantor Morning News
Top Events/Earnings Calendar
Earnings
PRE: SLE, RDEN, KSS, EL, CACH, BGG
POST: ABTL, BLOKA, DV, GEO, HLYS, INTX, JWN, LOV
Events
NTY— Bank of America Merrill Lynch Specialty Pharmaceuticals Conf
CTAS— Morgan Stanley Field Trip w/Cintas
OWW— JP Morgan Investor Tour w/Orbitz
Cantor Flows
Consumer Staples: GAP, GMCR, JJSF,
Consumer Discretionary: AMZN, FRED, LF, NEXC, ORLY
Consumer Services: ABTL, ACTG, EDMC, ZZ