Well, it’s that time of year: feverish shopping and fevered worrying about retail sales (will they? won’t they?). So we thought we’d look at some stocking stuffers — that is, companies that might be in your cross-hairs anyway as you ponder how to be Santa’s helper. Clearly it’s been a challenging retail season, but we found several that may be low on the radar, and doing pretty well.
It turns out that the worries that this might be what Elvis called a “Blue Christmas” might already be slacking off: retail sales were up 1.3% in November, compared to economists’ expectations of 0.6%. Look at this report filed on Friday by CNNMoney’s Aaron Smith: http://money.cnn.com/2009/12/11/news/economy/retail_sales/index.htm Interestingly, according to Smith’s report, the gain owes little to auto sales, which had led the numbers earlier in the fall based on government incentive programs. It seems that the Great American Shopper is putting his/her toe back in the water. We suspect that may offer some opportunities for the Great American Stockbuyer as well.
Please note that we do not recommend stocks; we only write on companies that we find interesting. Do your own diligence.
We all know that a part of Christmas is handmade. For me that is usually just a matter of baking, but there are many folks handier than I who make all kinds of clever things. One company that might interest the Martha wannabes is Berlin NJ-based AC Moore Arts & Crafts (Nasdaq: ACMR; http://www.acmoore.com/). They sell all the things you need for those things you wish you could make: scrapbooks, quilts, sweaters, cookies, wreaths, potpourri, sculptures, macrame and lots more. They sell in their own branded stores and online. ACMR sales are not up year-over-year, and they are making losses this year, but their current ratio is about 2:1 and they seem to have a cash warchest. In addition they have been aggressively marketing this fall, which may stand them in good stead. ACMR shares closed Friday at $2.60, less than half their 52-week high of $5.63, on average daily volume of about 90,000 shares. Market cap is about $65 million, which is a small fraction of yearly sales.
G-III's chic leather outergarments with Calvin Klein labels
But if you’re not the loving-hands-at-home type, you are probably looking for gifts to buy that can just be wrapped and given, and you may already be looking at merchandise that’s made by companies most of us have never heard of. One is NYC-based G-III Apparel Group Inc (Nasdaq: GIII; http://www.g-iii.com/), which busily stitches leather outerwear garments under a dizzying number of labels, some their own (Andrew Marc, Jessica Howard, et al), but more held under license from Calvin Klein, Sean John, Kenneth Cole, Cole-Haan, Guess, Tommy Hilfiger, Levi Strauss or Ellen Tracy. Analysts seem unanimous in recommending this stock, and GIII closed Friday at $21.11, near its year-high of $22.25 with average volume of 185,000 shares. Last week GIII raised its profit guidance for 2010 a hefty amount, and announced that its Q3 sales were up 3.4% when the government was cheering an overall rise of a lot less than that. Market cap is about $355 million, which looks to be about 25% of 2009 sales — and the company is growing at a pretty good clip.
You may not know Iconix, but you probably have seen this little smiley guy
Likewise NYC-based Iconix Brand Group (Nasdaq: ICON; http://www.iconixbrand.com/), whose merchandise is available in a store near you under brands like Joe Boxer, Mossimo, OP, London Fog, Bongo and Artful Dodger. Overall a fairly hip image, but a very solid record of performance, with sales up 8% in the difficult third quarter, very healthy EBITDA, and strong earnings. ICON closed Friday at $11.78, down a good bit from its year-high of $18.30 on average volume of over 1.3 million shares, and a market cap of about $840 million.
Birks & Mayors watches in 67 stores in Canada & US
But good things come in little boxes, or so I hear. If you subscribe to that theory, have a look at Montreal-based Birks & Mayors (NYSE Amex: BMJ; http://www.birks.com/), which operates jewelry stores in Canada and the southeastern US under the two monikers of Birks (Canada) and Mayors (US). Sales are down year-to-year, and losses are up, but BMJ shares closed Friday at $1.26, vs a year-high of $1.80, and a market cap of about $14 million (sales for the 6 months ended September were over $100 million with Xmas season ahead). Average volume on the stock is low.
Or have a look at Bermuda-based Signet Jewelers (NYSE: SIG: http://www.signetjewelers.com/), which says it is the “world’s largest specialty retail jeweler.” In the US Signet brands are the highly promoted Kay Jewelers and a relative newcomer: Jared (the man on TV whose GPS threatens to hold him hostage if he doesn’t show her the necklace he bought). Marketing is where it’s at, and Signet seems to have that down to a tee. They are also working on the basics, lowering debt, increasing store efficiency, in order to reduce losses and return to growth. Worth a look. SIG closed Friday at $25.41, about 20% off its year high of $29.07, with a market cap of $217 million and good volume over 280,000 shares. Like other jewelers, a huge discount to sales.
Zale Corp is partnered with DeBeers on projects like Shared Heart
But I’d be kidding you if I didn’t say that in some weird way, Zale Corp is also interesting, in spite of widespread doubts about survivability, like this comment on Motley Fool: http://www.fool.com/investing/general/2009/12/11/5-deathbed-stocks.aspx. Irving TX-based Zale (NYSE: ZLC; http://www.zalecorp.com/ operates nearly 2,000 stores and shows nearly $1.8 billion in sales with gynormous losses. Their current market cap of $104 million reflects the sentiment, and the shares closed Friday at $3.25, vs a year-high of $8.51 — good volume though. They sold Bailey Banks & Biddle, and have linked arms with DeBeers on some new “Big Ideas,” including the “Shared Heart” collection.
And if none of these works for you — there’s always eggnogg and fruitcake.
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