The Zacks Analyst Blog Highlights: DSW, Skechers U.S.A., Brown Shoe, Wolverine World Wide and Deckers Outdoor
CHICAGO, Aug. 7, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include DSW Inc. (NYSE:DSW-Free Report), Skechers U.S.A., Inc. (NYSE:SKX-Free Report), Brown Shoe Co. Inc. (NYSE:BWS-Free Report), Wolverine World Wide Inc. (NYSE:WWW-Free Report) and Deckers Outdoor Corp. (Nasdaq:DECK-Free Report).
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Here are highlights from Tuesday's Analyst Blog:
DSW Plans Stock Split, Raises Outlook
Footwear and accessories retailer, DSW Inc. (NYSE:DSW-Free Report) stated that it seeks to split its common stock two-for-one. Simply put, the move involves altering the number of shares outstanding and proportionally adjusting the share price.
This makes the shares look more reasonably priced, though the underlying value of the company remains constant. In a 2-for-1 stock split, every shareholder with one stock is given an additional share.
However, it seems that DSW designed the stock split to trim down the voting power of Class B shareholders. The Class A shares carries one vote per share, while Class B carries eight.
Thus, if approved by the shareholders, the company would issue one Class A share for each Class A or Class B share, which would create about 90.2 million shares comprising 81.6 million Class A shares and 8.6 million Class B shares and would curb the voting power of the Class B shareholders to 46% from the current 65% voting control.
Alongside, the company stated that net sales for the second quarter ended Aug 3, 2013 increased 9% year over year to $558 million. Same store sales increased 4.3% during the quarter compared with a 4.2% rise witnessed in the year-ago quarter.
DSW also raised its fiscal 2013 earnings guidance. The company now expects earnings to be in the range of $3.60 to $3.80 per share, up from its earlier guidance range of $3.40 to $3.60 per share. The company expects same store sales growth in the low single digits for fiscal 2013.
DSW has been extensively using its cash flow to spread its reach throughout the United States. We believe that the company's aggressive store expansion plans signify its popularity among the customers.
Skechers Upgraded to Outperform
On Jul 31, we upgraded our recommendation on Skechers U.S.A., Inc. (NYSE:SKX-Free Report), the designer, marketer and distributor of footwear, to Outperform, following better-than-expected second-quarter 2013 results. The company attained a Zacks Rank #1 (Strong Buy) status on Jul 19.
Why the Upgrade?
Skechers showcased a strong operating performance during the second quarter, marking a sharp recovery from a loss posted in the year-ago quarter on the back of strong sales across international wholesale and company-owned retail businesses.
The quarterly earnings came in at 14 cents a share compared with a loss of 4 cents delivered in the prior-year quarter, and handily surpassed the Zacks Consensus Estimate of 3 cents. Increased demand of products and healthy performance across all revenue channels led to an 11.5% surge in revenue to $428.2 million, which also came ahead of the Zacks Consensus Estimate of $425 million.
The stronger-than-anticipated results triggered an uptrend in the Zacks Consensus Estimates, as analysts become more constructive on the stock's future performance. This is evident from the movement witnessed in the Zacks Consensus Estimate that surged 17% to $1.10 for 2013 and 20.4% to $1.83 per share for 2014 in the past 30 days.
With more emphasis on the new line of products, cost containment efforts, inventory management and global distribution platform, the company anticipates sustaining the growth momentum in 2013. Moreover, Skechers expects to benefit from back-to-school deliveries and projects significant growth for the upcoming quarter as the demand for the company's products remains strong.
Other Stocks to Consider
Apart from Skechers, the other stocks worth considering in the Footwear & Accessories industry include Brown Shoe Co. Inc. (NYSE:BWS-Free Report) holding a Zacks Rank #1 (Strong Buy), and Wolverine World Wide Inc. (NYSE:WWW-Free Report) and Deckers Outdoor Corp. (Nasdaq:DECK-Free Report), both carrying a Zacks Rank #2 (Buy).
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