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Oxford Industries, American Woodmark, Lululemon Athletica, RH and GameStop highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – September 9, 2021 – Zacks Equity Research Shares of Oxford Industries, Inc. (OXM - Free Report) as the Bull of the Day, American Woodmark Corporation (AMWD - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Lululemon Athletica Inc. (LULU - Free Report) , RH (RH - Free Report) and GameStop Corp. (GME - Free Report) .
Oxford Industries is a big winner in the reopen as apparel demand soars. This Zacks Rank #1 (Strong Buy) is expected to grow revenue by 47% this fiscal year.
Oxford Industries is a retailer which operates Tommy Bahama, Lilly Pulitzer, Southern Tide, The Beaufort Bonnet Company and Duck Head brands.
It also has e-commerce sites and operates restaurants.
A Record Second Quarter
On Sep 2, Oxford Industries reported its fiscal 2021 second quarter results and blew by the Zacks Consensus. Earnings were $3.24 versus the Zacks Consensus Estimate of $2.33.
Sales rose to $329 million, up from $192 million in last year's pandemic impacted quarter, but was also higher than $302 million in the 2019 quarter.
Sales and earnings both exceeded the company's guidance issued in June.
All 5 brands had double digit sales growth along with record gross margin and record operating margin.
The full price direct to consumer sales grew 20% to $223 million compared to the second quarter of fiscal 2019, with growth in all branded businesses.
As restaurants reopened indoor dining, the restaurant business grew 26% to $26 million compared to the second quarter of fiscal 2019. Every location that was open in both fiscal quarters posted positive comps, with most at double-digit increases.
The quarter was boosted by the opening of 5 additional Marlin Bar locations.
However, the company's New York restaurant remained closed.
Wholesale sales were the only area where sales decreased compared to the second quarter of fiscal 2019, falling 6% after excluding Lanier Apparel which the company is exiting this year.
Adjusted gross margin rose to 64.3% from 59.8% in the second quarter of fiscal 2019, as it sold more full priced goods and it saw a shift in sales mix towards direct to consumer channels.
Raised Full Year Guidance
Given the strength of its brands, and the ability to sell more full priced product, Oxford has raised its full year guidance.
It now expects fiscal 2021 earnings of $6.45 to $6.70.
This compares to a loss of $1.81 last year and $4.32 in fiscal 2019.
Analysts are just as bullish.
4 estimates have been raised for fiscal 2021 since the earnings report, pushing up the Zacks Consensus to $6.68 from $5.11 just a week ago. That's at the high end of the company's guidance range.
That's earnings growth of 470% compared to last year's pandemic-impacted year.
Shares Pop in 2021 but are Still Cheap
Shares of Oxford Industries have nearly doubled in the last year, tacking on 36% year-to-date.
But the shares have weakened in the last 3 months, falling 7.4% during that time.
Given the rising earnings, but falling share price, the shares are still cheap, with a forward P/E of 13.3.
This puts it among the cheapest of the hot retailers like Deckers and Lululemon, which trade with forward P/Es of 26 and 55, respectively.
It's also shareholder friendly with a dividend currently yielding 1.9%.
Oxford has paid a dividend every quarter since it went public in 1960.
For those investors looking for a retailer with strong brands for 2022, Oxford should be one on the short list.
American Woodmark Corp. is getting hit by increasing inflationary pressures. This Zacks Rank #5 (Strong Sell) stock is expected to see lower earnings this year even as it raises prices.
American Woodmark is one of the largest cabinet manufacturers in America. It sells in major home centers and partners with builders and independent dealers and distributors.
Inflation Hits the Fiscal First Quarter
On Aug 31, American Woodmark reported its fiscal 2022 first quarter results and missed on the Zacks Consensus. Earnings were $0.70 versus the consensus of $1.41.
But sales rose 13.5%, or $52.5 million, to $442.6 million compared to the year before.
It saw growth across all channels, with high-teens growth in the repair and remodel sales channel and upper single digit growth in the new construction sales channel.
Market demand continued to be strong.
Why the Big Earnings Miss?
Net income fell $13.1 million due to the inflationary pressures that outpaced the pricing actions taken across all of the company's channels.
This results in about 220 basis points of sequential pressure from the Company's fiscal 2021 fourth quarter, related primarily to materials and logistics costs.
Because of the increased backlog of their products there was a lag in the realization of the company's price increases to deal with the inflationary pressures.
Net income margin was 0.7% for the quarter compared to 4.1% in the same period the prior year.
As a result, earnings fell to $0.70 from $1.63 in the prior year.
"Assuming our current sales level, we expect the impact of confirmed pricing actions to increase in the second half of fiscal 2022 to over $25 million per quarter," said Scott Culbreth, President and CEO.
"Looking forward our focus remains on increasing production to match a strong demand environment and reducing backlog and realizing additional pricing actions to mitigate inflationary pressures in materials, logistics, and labor," he added.
Full Year Estimates Cut
Even with strong demand, the big miss in the first quarter meant that the analysts still moved to lower full year estimates.
The fiscal 2022 Zacks Consensus Estimate fell to $4.84 from $7.67 just 30 days ago.
That's an earnings decline of 24.4% as American Woodmark made $6.40 last year.
Shares Fall in 2021
American Woodmark was a recovery play in 2020 as the new home market and home remodeling took off during the pandemic.
But shares have reversed in 2021, falling 27% year-to-date.
They're still cheap on a forward P/E basis, even with the earnings being cut. It trades with a forward P/E of just 14.
Additional content:
LULU, RH Beat Earnings; GME Down on Bottom-Line Miss
Market indexes took a break Wednesday, including the tech-heavy Nasdaq, which had been continually nudging higher all-time closing highs for the past few trading days. The Dow dipped a slight -0.20%, while the S&P 500 closed down -0.13% — both now on three-session losing streaks. The Nasdaq dropped -0.57% on the day, while the small-cap Russell 2000 underperformed the field this Hump Day, -1.14%.
All indexes are still performing solidly year to date, albeit in a year featuring the Great Reopening, where many market participants thought gains would be even stronger to this point in the year. The Russell lags the other major indexes, +15.6% so far in 2021, the Dow is +16% on the year, the Nasdaq +20.4% and the S&P 500 benchmark is +22% year to date.
JOLTS data brought a new series high earlier yesterday: 10.9 million jobs were reported available back in July, with June's 10.2 million a slight upward revision from the previous series high. The largest gains of job availability were in Healthcare and Social Assistance. Keep in mind nonfarm payrolls for July were very strong, but fell off a cliff for August, presumably because of the new increase in Covid cases. We shall see a month from now if this has made a jolt in JOLTS numbers, as well.
Lululemon Athletica results were better than expected after hours yesterday, with $1.65 per share easily outperforming the $1.21 Zacks consensus, +180% year over year. Revenues in the quarter brought in $1.45 billion surpassed the $1.34 billion estimated. This has helped LULU — a perfect hybrid, as it turns out, of the stay-at-home/Great Reopening stock play — gain more than 10% in late trading. The company had been underperforming, year to date.
RH, formerly Restoration Hardware, also crushed earnings expectations in its fiscal Q2 report released late Wednesday: $8.48 per share was well beyond the $6.58 anticipated, while sales in the quarter of $989 million topped the $972.3 million in the Zacks consensus. Gross margins grew 49.3%, and guidance has been raised. Price increases are coming to a majority of RH's products to make up for supply chain price increases. Shares were +3.3% in late trading, +52% year to date.
Meanwhile, meme-stock extraordinaire GameStop missed estimates on its bottom line while outperforming on the top: -76 cents per share was notably below the -42 cents expected, though basically cutting in half the -$1.40 reported in the year-ago quarter. Revenues of $1.18 billion did beat the $1.12 billion expected.
No guidance for Q3 or fiscal 2021 were included in the release. GameStop has now posted eight bottom-line misses in five years. The stock was down -1.9% in late trading, but still +1060% year to date.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Oxford Industries, American Woodmark, Lululemon Athletica, RH and GameStop highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 9, 2021 – Zacks Equity Research Shares of Oxford Industries, Inc. (OXM - Free Report) as the Bull of the Day, American Woodmark Corporation (AMWD - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Lululemon Athletica Inc. (LULU - Free Report) , RH (RH - Free Report) and GameStop Corp. (GME - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Oxford Industries is a big winner in the reopen as apparel demand soars. This Zacks Rank #1 (Strong Buy) is expected to grow revenue by 47% this fiscal year.
Oxford Industries is a retailer which operates Tommy Bahama, Lilly Pulitzer, Southern Tide, The Beaufort Bonnet Company and Duck Head brands.
It also has e-commerce sites and operates restaurants.
A Record Second Quarter
On Sep 2, Oxford Industries reported its fiscal 2021 second quarter results and blew by the Zacks Consensus. Earnings were $3.24 versus the Zacks Consensus Estimate of $2.33.
Sales rose to $329 million, up from $192 million in last year's pandemic impacted quarter, but was also higher than $302 million in the 2019 quarter.
Sales and earnings both exceeded the company's guidance issued in June.
All 5 brands had double digit sales growth along with record gross margin and record operating margin.
The full price direct to consumer sales grew 20% to $223 million compared to the second quarter of fiscal 2019, with growth in all branded businesses.
As restaurants reopened indoor dining, the restaurant business grew 26% to $26 million compared to the second quarter of fiscal 2019. Every location that was open in both fiscal quarters posted positive comps, with most at double-digit increases.
The quarter was boosted by the opening of 5 additional Marlin Bar locations.
However, the company's New York restaurant remained closed.
Wholesale sales were the only area where sales decreased compared to the second quarter of fiscal 2019, falling 6% after excluding Lanier Apparel which the company is exiting this year.
Adjusted gross margin rose to 64.3% from 59.8% in the second quarter of fiscal 2019, as it sold more full priced goods and it saw a shift in sales mix towards direct to consumer channels.
Raised Full Year Guidance
Given the strength of its brands, and the ability to sell more full priced product, Oxford has raised its full year guidance.
It now expects fiscal 2021 earnings of $6.45 to $6.70.
This compares to a loss of $1.81 last year and $4.32 in fiscal 2019.
Analysts are just as bullish.
4 estimates have been raised for fiscal 2021 since the earnings report, pushing up the Zacks Consensus to $6.68 from $5.11 just a week ago. That's at the high end of the company's guidance range.
That's earnings growth of 470% compared to last year's pandemic-impacted year.
Shares Pop in 2021 but are Still Cheap
Shares of Oxford Industries have nearly doubled in the last year, tacking on 36% year-to-date.
But the shares have weakened in the last 3 months, falling 7.4% during that time.
Given the rising earnings, but falling share price, the shares are still cheap, with a forward P/E of 13.3.
This puts it among the cheapest of the hot retailers like Deckers and Lululemon, which trade with forward P/Es of 26 and 55, respectively.
It's also shareholder friendly with a dividend currently yielding 1.9%.
Oxford has paid a dividend every quarter since it went public in 1960.
For those investors looking for a retailer with strong brands for 2022, Oxford should be one on the short list.
Bear of the Day:
American Woodmark Corp. is getting hit by increasing inflationary pressures. This Zacks Rank #5 (Strong Sell) stock is expected to see lower earnings this year even as it raises prices.
American Woodmark is one of the largest cabinet manufacturers in America. It sells in major home centers and partners with builders and independent dealers and distributors.
Inflation Hits the Fiscal First Quarter
On Aug 31, American Woodmark reported its fiscal 2022 first quarter results and missed on the Zacks Consensus. Earnings were $0.70 versus the consensus of $1.41.
But sales rose 13.5%, or $52.5 million, to $442.6 million compared to the year before.
It saw growth across all channels, with high-teens growth in the repair and remodel sales channel and upper single digit growth in the new construction sales channel.
Market demand continued to be strong.
Why the Big Earnings Miss?
Net income fell $13.1 million due to the inflationary pressures that outpaced the pricing actions taken across all of the company's channels.
This results in about 220 basis points of sequential pressure from the Company's fiscal 2021 fourth quarter, related primarily to materials and logistics costs.
Because of the increased backlog of their products there was a lag in the realization of the company's price increases to deal with the inflationary pressures.
Net income margin was 0.7% for the quarter compared to 4.1% in the same period the prior year.
As a result, earnings fell to $0.70 from $1.63 in the prior year.
"Assuming our current sales level, we expect the impact of confirmed pricing actions to increase in the second half of fiscal 2022 to over $25 million per quarter," said Scott Culbreth, President and CEO.
"Looking forward our focus remains on increasing production to match a strong demand environment and reducing backlog and realizing additional pricing actions to mitigate inflationary pressures in materials, logistics, and labor," he added.
Full Year Estimates Cut
Even with strong demand, the big miss in the first quarter meant that the analysts still moved to lower full year estimates.
The fiscal 2022 Zacks Consensus Estimate fell to $4.84 from $7.67 just 30 days ago.
That's an earnings decline of 24.4% as American Woodmark made $6.40 last year.
Shares Fall in 2021
American Woodmark was a recovery play in 2020 as the new home market and home remodeling took off during the pandemic.
But shares have reversed in 2021, falling 27% year-to-date.
They're still cheap on a forward P/E basis, even with the earnings being cut. It trades with a forward P/E of just 14.
Additional content:
LULU, RH Beat Earnings; GME Down on Bottom-Line Miss
Market indexes took a break Wednesday, including the tech-heavy Nasdaq, which had been continually nudging higher all-time closing highs for the past few trading days. The Dow dipped a slight -0.20%, while the S&P 500 closed down -0.13% — both now on three-session losing streaks. The Nasdaq dropped -0.57% on the day, while the small-cap Russell 2000 underperformed the field this Hump Day, -1.14%.
All indexes are still performing solidly year to date, albeit in a year featuring the Great Reopening, where many market participants thought gains would be even stronger to this point in the year. The Russell lags the other major indexes, +15.6% so far in 2021, the Dow is +16% on the year, the Nasdaq +20.4% and the S&P 500 benchmark is +22% year to date.
JOLTS data brought a new series high earlier yesterday: 10.9 million jobs were reported available back in July, with June's 10.2 million a slight upward revision from the previous series high. The largest gains of job availability were in Healthcare and Social Assistance. Keep in mind nonfarm payrolls for July were very strong, but fell off a cliff for August, presumably because of the new increase in Covid cases. We shall see a month from now if this has made a jolt in JOLTS numbers, as well.
Lululemon Athletica results were better than expected after hours yesterday, with $1.65 per share easily outperforming the $1.21 Zacks consensus, +180% year over year. Revenues in the quarter brought in $1.45 billion surpassed the $1.34 billion estimated. This has helped LULU — a perfect hybrid, as it turns out, of the stay-at-home/Great Reopening stock play — gain more than 10% in late trading. The company had been underperforming, year to date.
RH, formerly Restoration Hardware, also crushed earnings expectations in its fiscal Q2 report released late Wednesday: $8.48 per share was well beyond the $6.58 anticipated, while sales in the quarter of $989 million topped the $972.3 million in the Zacks consensus. Gross margins grew 49.3%, and guidance has been raised. Price increases are coming to a majority of RH's products to make up for supply chain price increases. Shares were +3.3% in late trading, +52% year to date.
Meanwhile, meme-stock extraordinaire GameStop missed estimates on its bottom line while outperforming on the top: -76 cents per share was notably below the -42 cents expected, though basically cutting in half the -$1.40 reported in the year-ago quarter. Revenues of $1.18 billion did beat the $1.12 billion expected.
No guidance for Q3 or fiscal 2021 were included in the release. GameStop has now posted eight bottom-line misses in five years. The stock was down -1.9% in late trading, but still +1060% year to date.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.