Zumiez’s fourth-quarter adjusted EPS declined 10%, to $0.68, above guidance of $0.61 to $0.64, our estimate of $0.61, and consensus of $0.62. With sales already reported, adjusted operating margin declined 230 basis points, to 14.0%, including a 100-basis-point contraction in adjusted gross margin to 37.3% (better than consensus of 36.7% and mainly reflecting deleveraging on negative comps) and a 130-basis-point increase in SG&A to 23.3%. Despite a soft end to 2013, Zumiez delivered record North American product margins in a highly promotional year, a strong testament to both the relevancy of the concept as well as the caliber of management.…
Author: Thomas Larson
Aratana Therapeutics reported positive net income of $7.1 million in the fourth quarter due to a one-time $15.5 million tax benefit related to the Vet Therapeutics acquisition. Excluding the income tax benefit, the normalized result would have been a net loss of $8.3 million. Relative to the consensus, fourth-quarter operating losses were $3.2 million and $2.9 million more than expected, respectively, driven by increased costs associated with the Vet Therapeutics deal. Aratana also generated $123,000 of revenue related to an AT-004 royalty payment from Novartis (NVS $81.66). There were no significant changes in the clinical status of the company’s portfolio,…
Last week, we hosted investor meetings with PROS’s chief financial officer, Charles Murphy; chief marketing officer, Tim Girgenti; and senior vice president of professional services, Wagner Williams. We came away from the meetings incrementally more confident in our view on near-term growth opportunities as well as the company’s strategic move to combine revenue optimization with the configure, price, quote technology acquired through Chameleon. Some investors remained unclear about the company’s backlog coverage, which was the primary reason for the stock’s 20%-plus drop since the company reported fourth-quarter results two weeks ago. The company reported total backlog of $206 million (up…
On Wednesday, HMS Holdings Corp. filed an 8-K disclosing the resignation of Walter Hosp, executive vice president, chief financial officer, and chief administrative officer. He will remain with the company in his existing role during a transition period lasting through June 6, 2014. Based on the filing and a follow-up conversation with Mr. Hosp as well as President and Chief Executive Officer William Lucia, we believe Mr. Hosp’s resignation arose from the company’s broad efforts to consolidate operations—including the entire executive team—at its Texas headquarters, which conflicted with Mr. Hosp’s long-stated intention of remaining in New York (the location of…
Dynavax ended the fourth quarter with $189.4 million in cash, which, according to our model, should sustain operations into 2016. Net loss for the quarter, which included a one-time noncash-deemed dividend of $8.5 million related to preferred stock, was $21.5 million with a per share loss of $0.09, compared with our estimates of net loss of $16.4 million and a per share loss of $0.07. We continue to expect full enrollment of the study by year-end 2014, top-line data release by year-end 2015, and potential regulatory approvals of Heplisav by the FDA and EMA in second half 2016. The randomized,…
DSW pre-announced fourth-quarter revenue of $571 million (excluding $1 million related to the luxury initiative, our estimate was $590 million, Street $588 million) on a flat comp. Importantly, this makes DSW one of the few companies to actually report a comp acceleration (0.2% compared with – 0.7% last quarter) in a widely noted weak holiday quarter. DSW’s two-year comp trend slowed from 5.6% in the third quarter to 3.6% in the fourth quarter, despite its outsized exposure to the Northeast, while the other companies, on average, preannounced that the fourth quarter slowed 4.9 points on a 2-year basis sequentially and…
After thoroughly reviewing the Muddy Waters document and speaking with American Tower’s management, Morningstar is reiterating the fair value estimate and Economic Moat Rating. American Tower formally addressed the most serious allegation in the Muddy Waters report via an 8-K it filed with the Securities and Exchange Commission, which documented the logistics of its payments for 666 Brazilian towers in 2011. Muddy Waters claimed American Tower paid only $335 million for the towers from Site-Sharing, not the $585 million American Tower had previously disclosed. In the 8-K filing last week, management explained it did indeed pay $335 million through intercompany…
Raptor Pharmaceutical (RPTP) continues to trade lower after the company reported late Thursday mixed financial results for Q4 and provided disappointing sales guidance for fiscal 2014. Shares are now down 21.3% at $11.64, with a 52-week range of $5.40 – $17.72. IN Thursday’s after hours, shares were down about 12%. The early development-stage company reported a Q4 loss of $0.19 per share, versus the Capital IQ consensus estimate of $0.18 loss per share. Product revenue from the company’s drug Procysbi, which is indicated for the management of nephropathic cystinosis in adults and children, were $10.2 million, versus the Street view…
Celgene Corp. (CELG) has been a volatile stock Friday, although it’s well off early lows late in Friday’s regular session, moving amid concerns that British regulators don’t want to approve certain uses of its Revlimid medication. That added to investor anxiety about the prospect of an early patent expiration on that drug. Celgene is down about 4% at $149.84, but moved as low as $147.65 and is among the biggest movers in the S&P 500. Trade publications reported that Britain’s National Institute for Health and Care Excellence, known as NICE, issued a draft Friday rejecting Revlimid, used for blood disease…
Roche reported 2012 results that were roughly in line with our expectations, as the firm’s core EPS of CHF 13.62 per share came in only slightly below our CHF 13.76 estimate. Roche expects 2013 sales growth at constant currencies to rise a similar 4% level as they did in 2012, which could prove conservative given the accelerating sales growth in 2012 (6% growth in the fourth quarter at constant currencies). Our 2013 core EPS estimate of CHF 14.65 implies roughly 8% earnings growth for the year, which is in keeping with the firm’s relatively vague guidance (to exceed top-line growth).…
In its second quarter as a stand-alone company, Tyco reported respectable operating results, given the challenging macroeconomic environment. An intense focus on North America security project selection continues to constrain revenue, but to the benefit of higher-margin service revenue in the future. There are a lot of benefits with management’s continued selectivity in North America commercial security projects. However, not all projects carry a service component, such as monitoring. Therefore, it’s critical for Tyco Integrated Security, the rebranded North America commercial business, to seek projects that have associated service work. Management of the presplit Tyco evidently was not choosy enough…
Manpower announced some meaningful changes to its executive leadership after the markets closed Tuesday, February 11, although the changes were not that surprising. The biggest change is that Jonas Prising will replace Jeffrey Joerres as chief executive officer effective May 2014. Mr. Joerres has served as the CEO since 1999 (almost 15 years), and will become the company’s executive chairman on that date. He will remain actively involved in the business, with a focus on client relationships. Mr. Prising will become only the fourth CEO in the company’s history, so there have not been a significant number of leadership changes.…