Analyst Stephen Anderson at Miller + Tabak has called time on Cracker Barrel Old Country Store, which has climbed more than 20 percent year to date (Ticker: CBRL) after adding more than that in 2012. Anderson cut his recommendation to 'hold' from 'buy,' and his price target of $81 leaves little room for upside from here.
Shares of Genesco (Ticker: GCO) gave up 2 percent Tuesday after fellow shoe retailer DSW reported a weak Q4 and said its quarter-to-date same-store sales are off 5 percent. While some analysts saw opportunity to buy the dip in DSW and Steve Madden, Mark Montagna at Avondale Partners is more pessimistic. Specifically, he's looking ahead to the Easter weekend's weather forecasts, which are calling for temperatures well below last year's in many parts of the country. That, Montagna writes, "is a negative for all of our coverage: apparel, footwear, off price, dollar stores." More shoppers will stay home and dent retailers' gross margins in a number of ways.
The strong fiscal Q2 reported Tuesday by Cracker Barrel Old Country Store was built on best-in-class sales improvements, says Miller + Tabak analyst Stephen Anderson. In a note to clients, Anderson said investors might be a bit disappointed in the guidance for the current quarter, but added that we shouldn't be surprised if the company tops its own guidance thanks to lower input costs.
[W]e still think there could be upside to today’s increased full-year FY13 EPS guidance, particularly as many publicly-traded restaurant companies recently have moderated their outlook for food costs in the next 12 months.
For the record, Cracker Barrel's cost of goods sold during the three months ended Feb. 1 was 34.75 percent of revenues versus 34.96 percent in the year-ago quarter.
Several analysts covering two Nashville-area retailers have raised their price targets following earnings reports. At Miller + Tabak, Stephen Anderson has lifted his target to $76 from $62, which implies an upside of more than 30 percent from the stock's (Ticker: CBRL) current levels. Anderson said sales momentum should improve in the coming quarters, helped in part by lower gas prices. "At the same time, management continues to hone the efficiency of operations, which we argue is a key ingredient of CBRL’s earnings power, and we think further moderation in food costs will provide an additional margin catalyst for the next 12 to 18 months."
Genesco is on the receiving end of two target raises even though investors didn't appear impressed by Wednesday's fiscal Q1 numbers. At Sterne Agee, Sam Poser sees the stock going to $85 — his target was $60 six months ago — on the back of good sales momentum and conservative guidance. Jeff Klinefelter at Piper Jaffray has lifted his target to $81 from $80.
Analyst Stephen Anderson at Miller Tabak says things are looking up for Cracker Barrel Old Country Store, which Tuesday reported fiscal first-quarter earnings it said reflected the progress it's making in driving traffic. On top of that, continued cost management means it's time for investors to step in. "In our view, the retreat on Cracker Barrel's share price does not reflect weakness in the company's fundamentals, and thus we recommend buying on the decline," Anderson wrote in hiking his price target to $56 from $53.