Secondary plays: SHOO, KSWS, DECK, NKE, SHOE, BKRS...
CWTR is expected to report Q4 earnings 05/03 after the market closes followed by conference call at 4:45pm ET...
CWTR Consensus:First Call consensus is Q4 EPS of ($0.19) on revs of $358.29 mln; Q1 EPS of ($0.03) on revs of $295.01 mln; FY08 EPS of ($0.03) on revs of $1.16 bln; FY09 EPS of $0.13 on revs of $1.29 bln...
Guidance:On 1/14 co lowered guidance, sees Q4 EPS to ($0.20)-($0.16) vs ($0.19) First Call consensus (down from prior guidance of $0.00). Co also sees comparable store sales for Q4 of 2007 are expected to reflect a decrease of mid- to high-teens versus the prior year level. The stock is gapped down ~20% and closed down ~25% following this guidance. The stock has since rebounding and is trading ~36% higher...
Expectations
: Since 2001, co has missed earnings only once (and only missed by $0.03). Revs growth for Q4 YoY has been >20%. Gross margin (estimates for Q4 is 31.75%, FY08 is 39.72% and FY09 is 40.17%) will be key issue with increased holiday promotions to boost store traffic and sales...Briefing note
: Short interest is 16%, mkt cap is $494.36 mln, float is 77.08 mln and avg volume is 900k. Co has extremely low forward P/E of ~9.2 (for comparison, some competitors' forward P/E values: KSWS 19.4, DECK 21.8, NKE 15.7)...Areas of Focus on the Call:1) FY09 outlook (co issued grim Q4 outlook on 1/14 but has yet to issue any guidance for this year, guidance is expected to be conservative for Q1 and full year)
2) Gross margin (gross margin estimates for Q4 is 31.75%, FY08 is 39.72% and FY09 is 40.17%)
3) Commentary on economic sensitivity of customers 4) Update on wholesale division turnaround...
Recent price movement
: After reporting last qtr on 11/28 (beat EPS estimates by $0.04), stock barely reacted and closed near unchanged levels. Since reporting last qtr, stock is trading down ~36%. Note the stock made a new 52-week low (~3.40) on 1/22, but has since rebounded trading ~36% higher off this 52-week low...
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