For Immediate Release
Chicago, IL – July 18, 2019 – Zacks Equity Research Shares of Boot Barn Holdings, Inc. (BOOT - Free Report) as the Bull of the Day, The Greenbrier Companies (GBX - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Netflix (NFLX - Free Report) , IBM Corp. (IBM - Free Report) and eBay (EBAY - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Boot Barn Holdings, Inc. proves that niche retail can still dominate. This Zacks Rank #1 (Strong Buy) saw same-store-sales rise 10% last fiscal year.
Boot Barn is a retailer focusing on western and work-related footwear, apparel and accessories for men, women and children. As of May 16, it operated 239 stores in 33 states and also sold online at www.bootbarn.com.
Additionally, the company operates www.sheplers.com, which is a pure play online western and work retailer and www.countryoutfitters.com, which sells to customers who live a country lifestyle.
Another Beat in Q4
On May 16, Boot Barn reported its fiscal fourth quarter earnings and beat on the Zacks Consensus by 5 cents. Earnings were $0.32 versus the consensus of $0.27.
It was the 7th earnings beat in a row.
In the quarter, same-store-sales rose 8.7% with retail store same-store-sales jumping 9.8% and e-commerce gaining 3.3% putting to pasture the argument that brick and mortar sales are dead.
It was the 8th consecutive quarter of positive same-store-sales growth.
“We completed another successful rodeo season in Texas, which along with solid results in each of our other geographies, allowed us to exceed expectations," said Jim Conroy, CEO.
For the full year, the same-store-sales jumped 10% with retail sales up 9.5% and e-commerce surging 12.2%.
Boot Barn added 17 new stores for the year, including 12 new stores and 5 that were acquired.
Guidance for Fiscal 2020
Boot Barn said it had momentum coming off the fourth quarter into the first quarter of the new fiscal year. At the halfway point of the first quarter, Boot Barn said that it saw consolidated same-store-sales growth of 7.5% along with solid merchandise margin performance.
It guided fiscal first quarter same-store-sales at 6%.
For the full year, it guided same-store-sales of 5%, which is coming on top of fiscal 2019's 10% gain. That's 15% growth over a 2-year period which is impressive in this retail environment.
Earnings are expected to be $1.42 to $1.50.
That is earnings growth of 11.8% as the company only earned $1.35 last year.
Analysts are bullish as well. The Zacks Consensus Estimate for fiscal 2020 is at $1.51, which is higher than the guidance range.
Shares at 2-Year Highs
Boot Barn has been one of the best retail stocks on the Street the last 2 years.
Shares have soared 379% during that time even with the November-December 2018 sell-off included in the equation.
Looking back, that was a huge buying opportunity as the shares are up 88% in 2019.
Bear of the Day:
The Greenbrier Companies recently gave disappointing guidance as the railcar market remains in flux. This Zacks Rank #5 (Strong Sell) is expected to see a double digit earnings decline in fiscal 2019.
Greenbrier is a supplier to the global freight transportation markets. It designs, builds and markets freight railcars and marine barges in North America. In Europe, Greenbrier Europe operates as an end-to-end freight railcar manufacturer, engineer and repair business with operations in Poland, Romania and Turkey.
It's also the leading provider of freight railcar wheel services, parts, repair and refurbishment and retrofitting services in North America and owns a lease fleet of 8,900 railcars and performs management services for 374,000 railcars.
A Miss in the Fiscal Third Quarter
On July 2, Greenbrier reported its fiscal third quarter results and missed on the Zacks Consensus Estimate by 7 cents.
Earnings were $0.89 versus the consensus of $0.96.
It saw record quarterly revenue of $856.2 million.
During the quarter, it received orders for 6,500 diversified railcars, valued at $730 million.
The new railcar backlog as of May 31, 2019, was 26,100 units with an estimated value of $2.74 billion.
So what went wrong?
Fourth Quarter Guidance Below Consensus
While it expected the back half of the fiscal year to be robust, some of that was tempered by the weakness in the repair business and in some international markets as well as the costs of integrating the American Railcar Industries acquisition.
It expects some of the headwinds to become tailwinds, especially in Brazil and Europe, but it still gave a soft fourth quarter forecast.
Greenbrier expects fiscal fourth quarter earnings to be in the range of $1.30 to $1.50. This was well below the consensus so it's not surprising that analysts moved to cut.
Six estimates were cut since the earnings report for the fourth quarter which pushed the Zacks Consensus down to $1.37 from $1.89.
That meant the analysts also had to slash the full year estimates. 8 estimates were cut pushing the full year consensus down to $3.09 from $3.62.
That's a decline of 25.2% as the company made $4.13 in fiscal 2018.
Analysts were also bearish about fiscal 2020 as 6 estimates were cut in the last month.
Shares at New 2-Year Lows
It's been rough for investors as the shares have hit a new 2-year low, down 36% during that period.
Investors have been rewarded with a dividend, currently yielding 3.4%, for their patience.
Shares appear cheap, with a forward P/E of just 9.5 and a PEG ratio of 1.0. But those earnings estimate cuts are a sign the stock could be a value trap.
Netflix (NFLX - Free Report) Down Big on Subscriber Miss; Plus IBM, EBAY
Netflix has hit the skids in Wednesday's after-market, down 12% following a disappointing Q2 earnings report. Actually, earnings of 60 cents per share were 4 cents ahead of estimates while sales of $4.92 billion was only marginally lower than expected. But it was a big deficit in subscriber growth -- 2.7 million in the quarter, versus 5 million expected and 5.5 million in the year-ago quarter -- which has taken the stock down double digits.
The company tried to focus on revenue growth of 26% in the quarter, as well as Q3 subscriber expectations of 7 million, but as of now this subscriber slowdown is weighing heavily on the shares, especially at a valuation around 130x earnings. Both International and U.S. subscriber growth fell in Q2. Shares have buoyed back to around -11% in late trading.
IBM Corp. keeps its 5-year streak of earnings beats alive after Wednesday's close, posting $3.17 per share versus $3.06 expected. Revenues of $19.16 billion slightly eclipsed the $19.11 billion in the Zacks consensus. Gross margins came in stronger than expected at 47.4%, partly on stronger cloud business. Global Tech Services brought in $6.8 billion for the quarter.
Full-year earnings guidance is in-line with expectations at $13.90 per share, with free cash flow estimated at $12 billion. Shares of IBM are up roughly 3% in the late session.
eBay put up typically solid numbers in its Q2 report: 68 cents per share in the quarter outpaced the 62 cents expected and 53 cents from the year-ago quarter. Revenues of $2.69 billion were up solid single-digits year over year and above the $2.67 billion in the Zacks consensus. Guidance for full-year earnings and sales remain roughly in-line. EBAY has not missed an earnings estimate since at least prior to when Zacks realigned stock-based compensation expenditures, dating back to mid-2015.
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