Mark Montagna at Avondale Partners has raised his price target for shares of Genesco (Ticker: GCO) to $70 from $67 on the heels of the company's third-quarter earnings report last week. Montagna also took his EPS target for this fiscal year up to $5.15 from $5.09 and says his price target is consistent with Genesco's earnings multiple of the past couple of years.
Seventeen-year-old Danielle Bradbery, who earlier this year won NBC's The Voice, has signed an endorsement deal with shoe company Skechers. Starting next spring, the country singer signed to Big Machine Label Group will become the face of Skechers and follow in the marketing footsteps of Carrie Underwood.
Local Avondale Partners retail analyst Mark Montagna doesn't see much sunshine in the forecast for shoe and hat retailer Genesco. Looking ahead to the company's Q3 report Friday, he expects the company (Ticker: GCO) to post a same-store sales drop of 3 percent and earn $1.35 per share, four cents below the Street's consensus estimate. And the headwinds are only getting stronger this holiday season.
The merchandise margin pressure would be from steeper promotions caused by overall mall traffic likely weak throughout Q4, the expected steep promotions from apparel retailers forcing GCO to make their pricing even more compelling toward footwear, continued wallet share gains for home related purchases, and expectations for significant spending by on the new gaming consoles and related software.
Montagna has fewer worries for Dollar General (Ticker: DG), which reports its third-quarter numbers Wednesday. The introduction of tobacco in the company's vast store network should continue to drive traffic and executives continue to redesign hundreds of stores with layouts that have proven to be productive. Margins are likely to drop some — thanks in part to tobacco sales — but Montagna expects same-store sales growth of 5.5 percent and EPS of 70 cents, in line with the Street and up 10 percent from a year ago.
Genesco shares (Ticker: GCO) took a 3 percent hit Monday after Piper Jaffray analyst Stephanie Wissink downgraded them to 'neutral' from 'overweight.' We couldn't find any details as to why Wissink made her move, but we're guessing it's a post-Black Friday reaction along the lines of her Canaccord Genuity peer Camilo Lyon. Assessing consumers' holiday behavior, Lyon said apparel retailers appeared to have to dish out deep discounts to lure buyers. But athletic retailers, he added, seemed to fare better — presumably at the expense of more fashion-oriented Genesco.
Analysts at Howard Weil have begun covering the limited partner interests of Delek Logistics with an 'outperform' rating and a price target of $36. The company (Ticker: DKL) opened trading Monday at $30.01 and climbed more than 3 percent to finish a penny below $31.
Seattle-based Nordstrom announced Wednesday plans to open next fall a Nordstrom Rack at Brentwood Place in Williamson County. Baker Storey McDonald Properties manages Brentwood Place, with the outlet store to be located in an approximately 36,000-square-foot space.
"We are delighted Nordstrom Rack chose Brentwood Place for their first store in Tennessee," Carl Storey, principal at Baker Storey McDonald Properties, said in a release. "They are joining an outstanding group of retail merchants in one of the premier shopping destinations in the greater Nashville area."
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Two notes today to pass on from the research team at West End-based Avondale Partners: First, retail analyst Mark Montagna has downgraded shares of Genesco to 'market perform' from 'outperform,' where he'd had them for the last several years. Montagna, who also lowered his price target for Genesco to $67 from $70, says the shoe and hat seller is bearing some of the brunt of consumers ramping up spending on their homes, which is expected to continue for a while. Combined with sluggish mall traffic and intense price competition, he adds, leaves CEO Bob Dennis and his team with fewer ways to boost margins. Montagna's fiscal Q3 estimate now stands at $1.35 versus the Street's $1.38 and he sees same-store sales dipping 3 percent. Genesco shares (Ticker: GCO) are up about 1 percent to about $66.80 this morning and have risen about 20 percent year to date.
There are no such worries for Montagna's colleague Kevin Campbell, who has lifted his price target for HCA Holdings to $53 from $47. Cost controls are still contributing to the story, he says, and investors shouldn't ignore the fact that management just bought back $500 million worth of stock near its highs. Campbell also has added 5 percent to his 2014 EPS estimates, which now stands at $3.79. Shares of HCA (Ticker: HCA) are up nicely this morning to almost $45.