24/7 Wall St. » BBY

Retailer Earnings Up Most in Two Years (WMT, DKS, HIBB, BBBY, WSM, BWS, FL, BBY, GME, WTSLA, GPS, ANF)

Paul Ausick — Wed, 23 May 2012 11:36:11 +0000

With 80% of the 120 companies it tracks having reported first quarter 2012 results, research firm Retail Metrics says that retailers who beat earnings estimates are up 5% year-over-year for the period, considerably higher than the 12-year average gain of 3.2%. Of 97 retailers reporting to date, 71% have beat expectations, 14% have met expectations, and 15% have missed.

Earnings growth for the reporting retailers is up too, by 11.8%. Excluding Wal-Mart Stores Inc. (NYSE: WMT) due to its size, Retail Metrics reckons that its 120 retailers will show profit growth of 12.2% in the first quarter. Including Walmart, profits will rise 13.8%.

The best profit growth is expected in the recreational sector, with Dick’s Sporting Goods Inc. (NYSE: DKS) and Hibbett Sports Inc. (NASDAQ: HIBB) leading the way a 40%+ earnings gain. Home furnishing retailers are expected to post 40% gains, led by Bed Bath & Beyond Inc. (NASDAQ: BBBY) and Williams-Sonoma Inc. (NYSE: WSM). Footwear retailers are tabbed to grow profits 31%, following huge gains at Brown Shoe Co. (NYSE: BWS) and Footlocker Inc. (NYSE: FL).

The worst performing sector is projected to be consumer electronics, with teen apparel stores the only other retailing sector expected to post overall losses. Best Buy Co. Inc. (NYSE: BBY) and GameStop Corp. (NYSE: GME) are the big players here. Teen apparel retailers like Wet Seal Inc. (NASDAQ: WTSLA), Gap Inc. (NYSE: GPS), and Abercrombie & Fitch Co. (NYSE: ANF) have struggled with same-store sales and revenues, as well as earnings.

Paul Ausick

Filed under: Apparel, Consumer Goods, Economy, Research, Retail Tagged: ANF, BBBY, BBY, BWS, DKS, FL, GME, GPS, HIBB, WMT, WSM, WTSLA

CalSTRS: The Dogs Turn on Walmart

247wallst — Wed, 23 May 2012 10:33:27 +0000

The California State Teachers’ Retirement System (CalSTRS), by many measures the second largest pension in the United States, has taken the advice of and has joined proxy advisory firms ISS and Glass Lewis in an effort to oust the Walmart (NYSE: WMT) board. The CalSTRS effort is more aggressive than that of the two proxy firms, which only want chairman Rob Walton, CEO Mike Duke and former CEO Lee Scott out. CalSTRS wants to unseat the entire board:

CalSTRS will vote its more than five million investor shares against the entire board’s reelection at Wal-Mart Stores, Inc. annual meeting. We encourage our fellow shareholders to do the same.

Walmart has not been very good to CalSTRS, and many other investors, as least as far as returns go. Its share price has been nearly flat over the past decade. But, like other holders of shares in the world’s largest retailer, it has ignored the rule that people, including executives, are innocent until proven guilty. The fund writes in a letter about its plans:

Based on these allegations, which indicate a breakdown of corporate governance and lack of oversight that should have averted this situation, CalSTRS does not have confidence that the current board has the independence and leadership needed to address these difficult issues.

A number of charges have arisen against Walmart over bribery activity at its Mexico operations. There are also allegations that past and current management knew about them and covered them up. Federal investigations, and a probe by Walmart’s board, have only just begun. It may be months before these conclude. In the meantime, no one in management or on the board has been pushed out, which is as it should be.

If the CalSTRS approach set a standard by which to measure boards and management, all of the leaders of Chesapeake Energy (NYSE: CHK) and JP Morgan (NYSE: JPM) would be gone by now. The same holds true for dozens of companies that have been through recent ethical scandals. Some board members and executives has been forced out at companies where there were breaches of reasonable standards. This includes Best Buy (NYSE: BBY) and Green Mountain Coffee Roasters (NASDAQ: GMCR). There have been no widespread suggestions that the entire boards and top managements of these corporations resign or be turned out by shareholders. Not everyone on the boards of these two public corporations was part of the wrongdoings. By forcing the resignations of those who had violated fair codes of conduct, these board members actually have proved their worthiness as fiduciaries.

The CalSTRS pressure to unseat the entire Walmart board is too radical. The directors who should reasonably judge the chairman and two CEOs ought to be left to do their jobs.

Douglas A. McIntyre

Filed under: Corporate Governance Tagged: BBY, CHK, featured, GMCR, JPM, WMT

24/7 Wall St. Closing Bell — May 22, 2012 (GPS, DRYS, DPZ, LYB, TSLA, AZO, BBY, RL, WSM, EXPR, AEO, BIG, HRL, NTAP, P, STP, TSL, PCX, BNHN, FB)

Paul Ausick — Tue, 22 May 2012 20:06:11 +0000

The three major US stock indexes opened slightly higher this morning following their European and Asian counterparts, none of which were the least concerned about a downgrade to Japanese debt or dire predictions from the OECD and the IMF (our coverage here and here). Existing US home sales were slightly above the consensus estimate, which also helped buoy stocks this morning (our coverage here). The US dollar index rose today, now up 0.52% at 81.509. The GSCI commodity index is up fractionally at 633.25, with commodities mostly lower on the stronger dollar. Corn and cotton were today’s big losers. WTI crude oil closed down -1% at $91.66/barrel, and Brent crude trades down -0.62% at $108.13/barrel. Natural gas rose more than 3% today at $2.69/thousand cubic feet. Gold settled down -0.8% today, at $1,576.60/ounce.

The unofficial closing bells put the DJIA down about 2 points to 12,502.66 (-0.01%), the NASDAQ fell about 8 points (-.029%) to 2,839.08, and the S&P 500 rose 0.05% or less than 1 point to 1,316.63.

There were several analyst upgrades and downgrades today, including Gap Inc. (NYSE: GPS) raised to ‘buy’ at Lazard Capital; DryShips Inc. (NASDAQ: DRYS) started as ‘buy’ at Global Hunter; Domino’s Pizza Inc. (NYSE: DPZ) reiterated as ‘buy’ with a target price of $46 at Argus; LyondellBasell Industries (NYSE: LYB) started as ‘outperform’ with a target price of $60 at Credit Suisse; and Tesla Motors Inc. (NASDAQ: TSLA) started as ‘buy’ at Maxim Group.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Autozone Inc. (NYSE: AZO) is down -1.67% at $362.40; Best Buy Co. Inc. (NYSE: BBY) is up 1.3% at $18.41 (more coverage here); Ralph Lauren Corp. (NYSE: RL) is up 3.4% at $151.24 (more coverage here); Williams Sonoma Inc. (NYSE: WSM) is up 3.4% at $35.90; and Express Inc. (NYSE: EXPR) is down -26.9% at $16.88.

Tomorrow we are scheduled to get earnings reports from American Eagle Outfitters Inc. (NYSE: AEO), Big Lots Inc. (NYSE: BIG), Hormel Foods Corp. (NYSE: HRL), NetApp Inc. (NASDAQ: NTAP), Pandora Media Inc. (NYSE: P), Suntech Power Holdings Co. Ltd. (NYSE: STP), and Trina Solar Ltd. (NYSE: TSL).

Other standouts from today include the following stocks:

Patriot Coal Corp. (NYSE: PCX) is down nearly -40% at $2.22 after posting a new 52-week low of $1.36 earlier today. The coal miner was reported to be interviewing firms to help with a restructuring. Patriot issued a non-denial denial later to stem the bleeding. More coverage here and here.

Benihana Inc. (NASDAQ: BNHN) is up 21.3% at $16.13. The restaurateur is being acquired for $296 million.

Facebook Inc. (NASDAQ: FB) is down -8.6%% at $31.12 after posting a new low of $30.98 earlier today. Shares are getting pummeled again today. We’ve started a deathwatch here and here. Just search for ‘facebook deathwatch’ to get the latest dope.

Stay tuned for Wednesday. Minneapolis Fed President Naryana Kocherlakota is giving a speech. We have also noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
10:00 a.m. – New home sales
10:00 a.m. – FHFA house price index
10:30 a.m. – EIA weekly petroleum status report
1:00 p.m. – 5-year note auction

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: AEO, AZO, BBY, BIG, BNHN, DPZ, DRYS, EXPR, FB, GPS, HRL, LYB, NTAP, P, PCX, RL, STP, TSL, TSLA, WSM

Best Buy Bounces, But Not Enough (BBY, RSH, GME, AMZN, WMT, AAPL)

Paul Ausick — Tue, 22 May 2012 12:35:58 +0000

Electronics retailer Best Buy Co. Inc. (NYSE: BBY) reported first quarter results this morning that were better than expected and the company’s shares are getting a much-needed bounce. The company reported adjusted EPS of $0.72 above an estimate of $0.59. Revenue totaled $11.61 billion, also above the consensus estimate of $11.5 billion.

Besides competing with smaller national rivals like RadioShack Corp. (NYSE: RSH) and GameStop Corp. (NYSE: GME), Best Buy has to slug it out with retailers Amazon.com Inc. (NASDAQ: AMZN), Wal-Mart Stores Inc. (NYSE: WMT), and direct sellers like Apple Inc. (NASDAQ: AAPL).

And while Best Buy touts its increases in sales of mobile phones and other portable devices, it also notes:

Areas of comparable store sales growth in the Domestic segment included tablets and mobile phones within the Computing & Mobile Phones revenue category, eReaders within the Consumer Electronics revenue category and Appliances. These increases were more than offset by comparable store sales declines primarily in notebooks within the Computing and Mobile Phones revenue category, gaming within the Entertainment revenue category, and digital imaging and televisions within the Consumer Electronics revenue category. The Domestic segment online channel revenue grew 20 percent compared to the prior-year period.

Selling more cheaper devices does not make up for lost sales in pricier items, unless a retailer can sell an enormous number. Best Buy can’t do that because there’s simply too much competition from wireless carriers, other retailers, and direct sales.

The company reiterated its full-year adjusted EPS guidance of $3.50-$3.80, in-line with the consensus estimate of $3.59. But weak international sales and declining same-store sales mean that Best Buy will be forced to close more stores, which will hurt revenues and ultimately profits unless the company can really figure out a way to boost its online sales. The outlook is probably not as rosy as the company would like us to think.

Shares are up about 1.6% in the pre-market, but were up as much as 6% at one point. Current price is $18.43 in a 52-week range of $17.53-$32.85. The 52-week low was set yesterday.

Paul Ausick

Filed under: Consumer Electronics, Earnings, Hardware, Pre-Market Activity, Retail, Software, Video Games Tagged: AAPL, AMZN, BBY, GME, RSH, WMT

24/7 Wall St. Closing Bell — May 21, 2012 ( AVP, PBR, SWY, BA, BBY, CPB, HAST, KKD, LOW, TECD, TUDO, AZO, GES, RL, WSM, TTWO, FB, CBE, ETN, WPRT)

Paul Ausick — Mon, 21 May 2012 20:04:35 +0000

The three major US stock indexes opened higher this morning as what seems to be a declaration of love for Greece at the G8 summit meeting pushed down fears that the Greeks would leave the euro and throw all of the monetary union into chaos (our coverage here). There is also some reason to believe that China will take its foot off the brake and step on the accelerator to get its economy on a growth path again. The US dollar index fell today, now down -0.19% at 81.138. The GSCI commodity index is down fractionally at 629.50, with commodities mostly mixed today. WTI crude oil closed up -1.2% at $92.57/barrel, and Brent crude trades up 1.58% at $108.83/barrel. Natural gas fell sharply today, down -4.4% today at $2.62/thousand cubic feet. Gold settled down -0.2% today, at $1,588.70/ounce.

The unofficial closing bells put the DJIA up more than 134 points to 12,503.87 (1.09%), the NASDAQ rose nearly 68 points (2.46%) to 2,847.21, and the S&P 500 rose 1.60% or nearly 21 points to 1,316.00.

There were several analyst upgrades and downgrades today, including Avon Products Inc. (NYSE: AVP) cut to ‘sell’ at UBS; Petrobras (NYSE: PBR) raised to ‘buy’ at SocGen; Safeway Inc. (NYSE: SWY) raised to ‘buy’ at Citigroup; Boeing Co. (NYSE: BA) raised to ‘buy’ at Argus; and Best Buy Co. Inc. (NYSE: BBY) cut to ‘hold’ at BB&T.

Earnings reports since markets closed on Friday have led to some price changes as of the last half hour of trading today: Campbell Soup Co. (NYSE: CPB) is down -2.1% at $32.71; Hastings Entertainment Inc. (NASDAQ: HAST) is up 15.2% at $2.05; Krispy Kreme Doughnuts Inc. (NYSE: KKD) is up 12.3% at $6.75; Lowe’s Companies Inc. (NYSE: LOW) is down -10.1% at $25.60 (more coverage here); Tech Data Corp. (NASDAQ: TECD) is up 0.7% at $47.78; and Tudou Holdings Ltd. (NASDAQ: TUDO) is up 11.3% at $33.37.

Tomorrow we are scheduled to get earnings reports from Autozone Inc. (NYSE: AZO), Best Buy, Guess? Inc. (NYSE: GES), Ralph Lauren Corp. (NYSE: RL), Williams Sonoma Inc. (NYSE: WSM), and Take-Two Interactive Software Inc. (NASDAQ: TTWO).

Other standouts from today include the following stocks:

Facebook Inc. (NASDAQ: FB) is down -11% at $34.03. Following Friday’s massively-hyped IPO and the CEO’s weekend wedding, a falling share price was probably inevitable. More coverage here.

Cooper Industries plc (NYSE: CBE) is up 25.2% at $69.96 after posting a new 52-week high this morning of $70.97. The company is being acquired by Eaton Corp. (NYSE: ETN) for $11.8 billion. More coverage here.

Westport Innovations Inc. (NASDAQ: WPRT) is up 12% at $26.57. The natural gas engine maker has a deal with Volvo for a new truck engine.

Stay tuned for Tuesday. Atlanta Fed President Dennis Lockhart is giving a speech. We have also noted the following events on the schedule (all times Eastern):

10:00 a.m. – Existing home sales
10:00 a.m. – Richmond Fed manufacturing index
11:30 a.m. – 4-week bill auction
1:00 p.m. – 2-year note auction

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: AVP, AZO, BA, BBY, CBE, CPB, ETN, FB, GES, HAST, KKD, LOW, PBR, RL, SWY, TECD, TTWO, TUDO, WPRT, WSM

Can Best Buy’s Earnings Report Even Matter? (BBY, RSH, AMZN)

Administrator — Mon, 21 May 2012 19:39:25 +0000

Best Buy Co. Inc. (NYSE: BBY) is set to report its earnings on Tuesday morning. The company has the earmarks of a value stock now that shares have sold off so much. The problem is that it has really just been acting like a value trap. Its problems are not as bad as RadioShack Corporation (NYSE: RSH), but Amazon.com Inc. (NASDAQ: AMZN) is perhaps the biggest problem.

Take a look at any chart and you will see that Best Buy shares hit a low not seen since back in 2009 when every stock tied to retail and technology had hit the ‘free fall’ button. This stock hit a low of $17.53 this morning and its prior 52-week range was $17.84 to $32.85.

Somehow Amazon remains the winner here. Many buyers go to Best Buy to interact with consumer electronics and then turn around and buy the item online from a competitor to avoid sales tax and/or to pay a lower price.

Analysts still have a consensus price target around $25.00 for Best Buy, but for now that should not be trusted. And what about that $3.59 EPS target for this year at Best Buy from Thomson Reuters? Or the $3.72 EPS target for next year from Thomson Reuters? If those were to remain true then Best Buy trades at only 5-times this year’s earnings and under 4.9-times next year’s earnings estimates.

The reality is that Best Buy has no CEO, it lost its founder, it is suffering from margin compression, and it is often cited as losing more and more of the potential customer base. BB&T Capital Markets also downgraded Best Buy shares to Hold from Buy just this morning, although admittedly that is just a very late downgrade.

The one thing which may actually act as a slingshot on any news that “lass bad” is that Best Buy has close to 54 million shares in its short interest per the most recent data. It is hard to get excited that short sellers may drive up the price if the news is not just dismal.

JON C. OGG

Filed under: Consumer Electronics, Earnings, Management Change, Retail, Shareholder Issues, Short Interest Tagged: AMZN, BBY, featured, RSH

Top Analyst Upgrades & Downgrades (AVP, BAC, BBY, BA, DCI, FB, GS, HLF, KIRK, MS, MYGN, NUAN, PBR, RHI, ROST, SWY, SPLK, TJX, ZBRA)

Administrator — Mon, 21 May 2012 12:35:55 +0000

These are some of the top analyst upgrades, downgrades and initiations seen in Wall Street research calls this Monday.

Avon Products Inc. (NYSE: AVP) Cut to Sell at UBS.

Bank of America Corporation (NYSE: BAC) Cut to Market Underperform at JMP Securities.

Best Buy Co. (NYSE: BBY) Cut to Hold at BB&T.

Boeing Co. (NYSE: BA) Raised to Buy at Argus.

Donaldson Company. Inc. (NYSE: DCI) Reiterated Outperform and raised estimates at Credit Suisse.

Facebook, Inc. (NASDAQ: FB) Started as Positive at Susquehanna.

Goldman Sachs Group Inc. (NYSE: GS) Cut to Market Underperform at JMP Securities.

Herbalife Ltd. (NYSE: HLF) Reiterated Buy at Argus.

Kirkland’s, Inc. (NASDAQ: KIRK) named Bear of the Day at Zacks.

Morgan Stanley (NYSE: MS) Cut to Market Underperform at JMP Securities.

Myriad Genetics (NASDAQ: MYGN) Raised to Outperform at Leerink Swann.

Nuance Communications (NASDAQ: NUAN) Started as Neutral with $25 target at Goldman Sachs.

Petrobras (NYSE: PBR) Raised to Buy at Societe Generale.

Robert Half International (NYSE: RHI) named as Bull of the Day at Zacks.

Ross Stores, Inc. (NASDAQ: ROST) Cut to Hold at Canaccord Genuity.

Safeway (NYSE: SWY) Raised to Buy at Citigroup.

Splunk, Inc. (NASDAQ: SPLK) Started as Overweight at Barclays.

TJX Companies (NYSE: TJX) Cut to Hold at Canaccord Genuity.

Zebra Technologies (NASDAQ: ZBRA) Cut to Neutral at JPMorgan.

If you enjoyed the top analyst upgrades and downgrades, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox. We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

JON C. OGG

Filed under: Analyst Calls Tagged: AVP, BA, BAC, BBY, DCI, FB, GS, HLF, KIRK, MS, MYGN, NUAN, PBR, RHI, ROST, SPLK, SWY, TJX, ZBRA

24/7 Wall St. Closing Bell — May 18, 2012

Paul Ausick — Fri, 18 May 2012 20:05:30 +0000

The three major US stock indexes opened somewhat higher this morning as investors paid little attention to last night’s downgrade of Spain’s banks (more coverage here). With little economic data on tap today, US markets waited for the IPO of Facebook Inc. (NASDAQ: FB) — and waited and waited. The first trade went off about half an hour late at $42.05, well above the announced price of $38, but the stock wasn’t able to hold on to the gain, ending the day at $38.08. The US dollar index fell today, now down -0.11% at 81.291. The GSCI commodity index is down 0.04% at 633.67, with commodities mostly mixed today. Wheat is the big gainer again today, up 5.7% in Chicago and 4.9% in Kansas City. WTI crude oil closed down -1.2% at $91.48/barrel, and Brent crude trades down at -0.38% at $107.08/barrel. Natural gas continues its climb, up 5.7% today at $2.74/thousand cubic feet. Gold settled up 1.1% today, at $1,591.90/ounce, ending a four-day losing streak.

The unofficial closing bells put the DJIA down 74 points to 12,368.47 (-0.59%), the NASDAQ fell nearly 35 points (-1.24%) to 2,778.79, and the S&P 500 fell -0.74% or nearly 10 points to 1,295.17.

There were several analyst upgrades and downgrades today, including LinkedIn Corp. (NYSE: LNKD) reiterated as ‘buy’ with a target price of $135 at Canaccord Genuity; Dendreon Inc. (NASDAQ: DNDN) started as ‘sell’ at Maxim; Bank of Ireland (NYSE: IRE) cut to ‘sell’ at Deutsche Bank; Phillips 66 (NYSE: PSX) started as ‘buy’ at UBS; and Sprint Nextel Corp. (NYSE: S) raised to ‘buy’ at Guggenheim.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: ANN Inc. (NYSE: ANN) is up 3.25% at $26.69; Brown Shoe Co. Inc. (NYSE: BWS) is up 21.4% at $10.63 (more coverage here); Progressive Corp. (NYSE: PGR) is down -0.1% at $21.32; and Footlocker Inc. (NYSE: FL) is up 8.9% at $30.50.

Next week we are scheduled to get earnings reports fromTech Data Corporation (NASDAQ: TECD); Urban Outfitters Inc. (NASDAQ: URBN); Autozone Inc. (NYSE: AZO); Best Buy Co. Inc. (NYSE: BBY); Dell Inc. (NASDAQ: DELL); PetSmart Inc. (NASDAQ: PETM); Ralph Lauren Corporation (NYSE: RL); Big Lots Inc. (NYSE: BIG); and Hewlett-Packard Co. (NYSE: HPQ) among others.

Other standouts from today include the following stocks:

Renren Inc. (NYSE: RENN) is down -20% at $4.99. The Chinese Internet company is getting whacked on Facebook’s IPO. More coverage here.

GSV Capital Corp. (NASDAQ: GSVC) is down -18.6% at $13.10. The investment company had a nice hunk of Facebook shares at a very low price — all the value is in today. More coverage here.

Zynga Inc. (NASDAQ: ZNGA) is down -16.3% at $6.92 after posting a 52-week low of $6.90 earlier today. Another stock that climbed on Facebook’s back during the run-up to the IPO, shares were stopped by an automatic trigger shortly after FB shares opened today. More coverage here.

Stay tuned for Monday. Atlanta President Dennis Lockhart is giving a speech. We have also noted the following events on the schedule (all times Eastern):

10:00 a.m. – Existing home sales
10:00 a.m. – Richmond Fed manufacturing index
11:30 a.m. – 3- and 6-month bill auctions

Have a great weekend!

Paul Ausick

Filed under: General Tagged: ANN, AZO, BBY, BIG, BWS, DELL, DNDN, FB, FL, GSVC, HPQ, IRE, JASO, LNKD, PETM, PGR, PSX, RENN, RL, S, TECD, URBN, ZNGA

The Top Earnings Previews For The Week Ahead (TECD, URBN, AZO, BBY, DELL, PETM, RL, BIG, HPQ, NTAP, P, TOL, COST, TIF, PAY)

Administrator — Fri, 18 May 2012 14:09:16 +0000

24/7 Wall St. has compiled earnings previews for some of the top companies reporting in the week ahead. Estimates have been taken from Thomson Reuters for consensus earnings and targets and we have added in color on some companies if applicable.

These are some of the focus companies reporting earnings in the coming week: Tech Data Corporation (NASDAQ: TECD); Urban Outfitters Inc. (NASDAQ: URBN); Autozone Inc. (NYSE: AZO); Best Buy Co. Inc. (NYSE: BBY); Dell Inc. (NASDAQ: DELL); PetSmart Inc. (NASDAQ: PETM); Ralph Lauren Corporation (NYSE: RL); Big Lots Inc. (NYSE: BIG); Hewlett-Packard Co. (NYSE: HPQ); NetApp Inc. (NASDAQ: NTAP); Pandora Media Inc. (NYSE: P); Toll Brothers Inc. (NYSE: TOL); Costco Wholesale Corporation (NASDAQ: COST); Tiffany & Co. (NYSE: TIF); and VeriFone Systems Inc. (NYSE: PAY).

MONDAY, MAY 21

Tech Data Corporation (NASDAQ: TECD) is set to report and show how the outlook is for the companies which actually distribute all of the technology components and finished smartphones and consumer electronics devices around the world. Shares were recently under $48 and the 52-week range is $38.21 to $59.29. The consensus estimate is $1.16 EPS and $6.18 billion in revenue.

Urban Outfitters Inc. (NASDAQ: URBN) is going to show if its turnaround is closer or just still chugging along. Estimates are $0.20 EPS and $579.2 million in revenue. Shares were recently around $25.50 and the 52-week range is $21.47 to $33.90; the consensus target price is about $29.70.

TUESDAY, MAY 22

Autozone Inc. (NYSE: AZO) took it hard on the chin recently when rival Advance Auto warned of a difficult second quarter. This is one of the high-priced stocks and shares are around $366 against a 52-week range of $266.25 to $399.10. The consensus analyst target price is $419.80; estimates are $6.25 EPS and $2.13 billion in revenue; next quarter estimates are $8.47 EPS and $2.84 billion in revenue.

Best Buy Co. Inc. (NYSE: BBY) is in such disarray that we won’t even bother with the warnings and the caveats here. Estimates are $0.60 EPS.

Dell Inc. (NASDAQ: DELL) is now trading at only about 7.5-times forward earnings. Estimates are $0.46 EPS and $14.89 billion in sales. Earnings have been choppy on guidance but the PC makers and components makers are all talking up the release of Windows 8 as a new catalyst. With shares trading just under $15.00, the 52-week range is $13.29 to $18.36 and the consensus price target is almost $19.50.

PetSmart Inc. (NASDAQ: PETM) has been a steady “beat earnings and raise guidance” outfit as Americans will pay endless and countless dollars on Fido and Fifi. Estimates are $0.73 EPS and $1.6 billion in revenue. With shares around $56.00, the 52-week high is $59.36.

Ralph Lauren Corporation (NYSE: RL) has sold off nearly $40 from its highs since March. The question is how its business has been holding up in slowing markets even if the U.S. sales have been strong. Estimates are $0.83 EPS and $1.6 billion in sales. With shares around $143 the 52-week range is $105.00 to $182.48 and the consensus price target from analysts is just over $190.00.

WEDNESDAY, MAY 23

Big Lots Inc. (NYSE: BIG) should be called “Warning Lots” because it has lowered guidance and been hard on two different waves. With shares under $35 and against a high of $47.22, the premium values of the dollar stores may and discounters may be hurting here. On the flip side, the bar has been set extremely low. Estimates are $0.69 EPS and $1.3 billion in revenue.

Hewlett-Packard Co. (NYSE: HPQ) is now around the $22 handle and the news of another 25,000 or more in layoffs (versus 350K as of October 31, 2011) is not helping the growth hopes. Estimates are $0.91 EPS and $29.92 billion in sales. The stock now trades at about 6-times earnings, but the consensus price target is down to just over $29.00 as no one wants to pay up for the valuation of this DJIA component.

NetApp Inc. (NASDAQ: NTAP) has been pounded and the last 45 days has looked like a downward staircase on its chart. At about $34.00, the 52-week range is $33.00 to $56.49 and the consensus price target objective is just over $47.00.

Pandora Media Inc. (NYSE: P) is no longer market-influencing, but it is a cult stock and the earnings could create a large gain or a large drop. With shares under $10.50, the post IPO range is $7.83 to $26.00. Estimates are -$0.17 EPS and $74.3 million in revenue. Can the company make it to profitability by the end of next year?

Toll Brothers Inc. (NYSE: TOL) is expected to be profitable. A profitable homebuilder! At $25.50, the 52-week range is $13.16 to $27.80. A lot of good news already has to be priced in, so we would want to expect upside to remain positive here. Estimates are $0.04 EPS and $381.9 million in revenue.

THURSDAY, MAY 24

Costco Wholesale Corporation (NASDAQ: COST) almost always beats its earnings estimates. At $83.75 the 52-week range is $70.22 to $92.10; analysts have a target price of $86.80 or so. Estimates are $0.87 EPS and $22.1 billion in revenue.

Tiffany & Co. (NYSE: TIF) has come off of its highs significantly and this is the king of jewelry stores for investors. There will have been two smaller reports ahead of Tiffany in the week with Fred’s and Zale. Estimates for Tiffany are $0.69 EPS and $816.8 million. With shares under $61.00, the 52-week range is $56.21 to $84.49 and the consensus price target is $75.63.

VeriFone Systems Inc. (NYSE: PAY) has pulled back by about 20% from its highs, but the woes of the company seem to be behind it. At $44.80, the 52-week range is $30.25 to $55.89 and the consensus analyst price target is $54.10. Estimates are $0.61 EPS and $471.5 million in revenue.

As a reminder, dates and estimates can change ahead of earnings and some may have already changed.

JON C. OGG

Filed under: Calendar, Earnings, The Week Tagged: AZO, BBY, BIG, COST, DELL, HPQ, NTAP, P, PAY, PETM, RL, TECD, TIF, TOL, URBN

As Board After Board Fails, Governance Takes a Beating

247wallst — Tue, 15 May 2012 10:26:46 +0000

Many Americans, and some politicians, have attacked the boards of major U.S. corporations for paying their CEOs too much, not holding management to tough earnings goals and lining their own pockets with rich payments and rides on corporate jets. Recent news has shown that boards have another reason to be attacked. Many barely pay attention to the operations of the corporations they oversee or to the people who manage the companies.

The list of governance failures in the past month or so is a long one. The board of Chesapeake Energy (NYSE: CHK) allowed its CEO, Aubrey McClendon, to share in the firm’s riches from drilling, which is certainly a conflict of interest. The board of Green Mountain Coffee Roasters (NASDAQ: GMCR) allowed the firm’s founder, Robert Stiller, to pledge shares for loans. Lead director William Davis did so as well. When Green Mountain’s stock collapsed after poor earnings, each director was hit by margin calls. The balance of the directors forced them out of most of their board positions. There is a case to be made that the services of the two were valuable to the company because of the length of their tenures. But where were the rules about margin commitments?

Yahoo! (NASDAQ: YHOO) continued to have one of the most dysfunctional boards of any large public company. The scandal over former CEO Scott Thompson is hardly worth mentioning again. Mistakes over vetting of his background cost him his job and also triggered the resignation of director Patti Hart. Most of the Yahoo! board has turned over at a time when some stability is almost essential to a corporation so near drowning.

The credit crisis of 2008 should have heightened board oversight at banks. Risk management at a high level is part of financial company governance. JP Morgan’s (NYSE: JPM) board obviously did not take that seriously. Or it was passive enough to allow management to be the sole judge of risk. That approach has helped cost JP Morgan a $2 billion write-off and a significant cost to its reputation.

At Best Buy, (NYSE: BBY), there is yet another example of the weakness of a system in which a founder and large shareholder controls the company for years. Chairman Richard Schulze followed disgraced CEO Brian Dunn out the door. Now the troubled consumer electronics store is leaderless, for all practical purposes. The Best Buy board allowed Schulze to run Best Buy as a private enterprise. Schulze believed he was powerful enough to keep Dunn’s indiscretions from the balance of the board. Much of the blame for that sits with his fellow directors.

Board reform is often debated in abstract. What if a board makes a major error in oversight? What if its allows management to run a company with the belief that the board is passive, perhaps because a CEO or chairman is unusually powerful? Or the perks of being a board member may be so good that the idea of changing those benefits in the name of better governance is too much of a temptation.

Governance took a beating recently. If the past is any indication, this will not change things much. Boards remain self-governing and assured of election. The system is still broken, and inertia at the level of government regulators and most investors will cause it to remain that way.

Douglas A. McIntyre

Filed under: Corporate Governance Tagged: BBY, CHK, featured, GMCR, JPM, YHOO