Tag Archives: NYSE:NWY

New York & Company: Zacks’ Bear of the Day Play

New York & Company, Inc. (NWYFree Report) is struggling to stay alive in a tough apparel retail environment. This Zacks Rank #5 (Strong Sell) expects to report negative same store sales for the important holiday quarter.

New York & Company operates 483 stores in 41 states specializing in women’s fashion apparel and accessories. It also operates a website at nyandcompany.com.

Disappointing Fourth Quarter Results

On Jan 10, New York & Company provided preliminary results for its holiday quarter and the fourth quarter. For the 9 weeks ending on Dec 31, comparable store sales fell about 1.7%.

For the full quarter, sales were expected to be down in the low single-digit percentage range.

That’s an operating loss of $2.5 million to a loss of $4.5 million.

The company blamed soft traffic and the highly promotional environment. 70% off sales were not uncommon at many apparel retailers during the holiday period.

The bright spots continue to be the success of the Eva Mendes Collection and dresses. But it saw weakness in woven and knit tops, denim and jewelry. Its eCommerce business is also growing.

It believes that fourth quarter markdowns will allow it to start the spring season “clean.”

Can It Survive?

New York & Company is heavily mall based. Its usually located next to or near Express (EXPRFree Report) and others like Wet Seal and the Limited, both of which are in financial trouble. The Limited, which also specializes in women’s apparel and accessories, recently closed all of its stores and said it would sell only online.

New York & Company said it had $80 million cash on hand at the end of the year versus $60 million a year ago.

But earnings continue to drop. It lost $0.04 a year last year and analysts expect it to lose another $0.14 in fiscal 2016.

One estimate has been lowered for fiscal 2016 in the last 30 days.

Shares Sink Over the Last 5 Years

It’s not a good time to own the apparel retailers and New York & Company is no exception.

If you look at the 5-year chart, it doesn’t look real positive for investors.

There’s nothing on the horizon that suggests the story is about to get better for these apparel specialty retailers.

If you must own a company in this space, you might want to consider going bigger with Gap (GPSFree Report) . It’s a Zacks Rank #2 (Buy) and has some brands, like Athleta, in the athleisure area, which are performing well.

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New York & Company: Zacks’ Bear of the Day Play

The landscape continues to be quite challenging for many retailers due to consumers’ rising preference for shopping online and at off-price stores.

Headquartered in New York City, New York & Company (NWY) is a specialty retailer of women’s fashion apparel and accessories. The company’s proprietary branded merchandise is sold exclusively through its national network of retail stores and online at its website. The Company operates 488 stores in 43 states.

Disappointing First Quarter Results and Downbeat Guidance

The retailer reported a loss of $5.7 million, or $0.09 per share, compared with a loss of $4.7 million, or $0.07 per share, a year ago and much worse than the Zacks Consensus Estimate for earnings of $0.04 per share. This was the third miss for the company in the past four quarters.

According to the CEO “we began the quarter with positive sales trends; however, as we entered the last week of March, we experienced a slowdown in traffic to our brick-and-mortar stores, that continued into April, and led to sales and profitability below our expectations.”

For the current quarter, the company expects net sales and comparable store sales to be flat to slightly negative and diluted earnings to be between $0.00 and $0.01 per share.

Shares plunged more than 40% the day after the report.

Falling Estimates

Analysts have been cutting their estimates for the company after quarterly results. Zacks Consensus Estimates for the current and next year are currently $0.03 per share and $0.16 per share respectively, sharply down from $0.28 per share and $0.39 per share, before the results. Declining estimates sent the stock back to Zacks Rank # 5.

The following chart shows negative earnings and price momentum for the company for the last several quarters:

The Bottom Line

Declining store traffic and highly promotional environment continue to present challenges for retailers. The company has been closing stores and also converting full prices stores to outlet stores. But so far their strategy and turnaround efforts have not been successful.

The Zacks industry rank for “Retail-Apparel/Shoes” is currently 241 out of 265 (Bottom 9%).

Investors seeking exposure to the industry could look at Children’s Place (PLCE), which currently carries a Zacks Rank #2 (Buy), with Zacks Style Scores of “A” each for Growth and Value.

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New York & Company: Zacks’Bear of the Day Play

The landscape continues to be challenging for many retailers despite improving economy, lower oil prices and healing labor markets.

Headquartered in New York City, New York & Company (NWYSnapshot Report) is a specialty retailer of women’s fashion apparel and accessories. The company’s proprietary branded merchandise is sold exclusively through its national network of retail stores and online at its website. The Company operates about 500 stores in 43 states.

Disappointing Third Quarter Results

The company reported its Q3 results on December 2. While results were better compared to the same period last year, they fell short of Zacks Consensus Estimates.

Gross profit increased 180 basis points to 29% of net sales, versus the prior year gross margin rate of 27.2% of net sales, driven mainly by decreases in buying & occupancy costs and home office payroll resulting from the organizational realignment initiated as part of Project Excellence.
Adjusted operating loss was $2.6 million and represented a significant improvement from an adjusted loss of $6.7 million in the prior-year quarter.

Adjusted EPS (per Zacks calculations) was a negative $(0.05) per share, versus the Zacks Consensus Estimate of $0.00 per share. The company has missed in three out of four past quarters and with Zacks Earnings ESP (Expected Surprise Prediction) of a negative 9.1%, it is expected to miss again for the current quarter.

Downward Revisions

Analysts have been cutting their estimates for the company after quarterly results. Zacks Consensus Estimates for the current and next year are currently $0.00 per share and $0.22 per share respectively, down from $0.10 per share and $0.23 per share, 30 days ago. Declining estimates sent the stock back to Zacks Rank # 5.

The Bottom Line

Declining store traffic and highly promotional environment continue to present challenges for retailers. The company is going through a turnaround attempt and may succeed in the longer term if its efforts bear fruit and consumer spending finally picks up, but the short-term outlook remains cloudy.

The Zacks industry rank for “Retail-Apparel/Shoes” is currently 215 out of 265 (Bottom 19%).

Investors seeking exposure to the industry could look at Abercrombie (ANF) , which currently carries a Zacks Rank #1 (Strong Buy), with Zacks Style Scores of “A” each for Growth and Value.

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New York & Company: Zacks’ Bear of the Day Play

The landscape continues to be challenging for many retailers despite improving economy, lower oil prices and healing labor markets. One such specialty retailer saw its share price plunge by more than 40% in 2014 but there are still no signs of a turnaround.

New York & Company (NWY) is a specialty retailer of women’s fashion apparel and accessories. The company’s proprietary branded merchandise is sold exclusively through its national network of retail stores and online at its website. The Company operates about 500 stores in 43 states.

Disappointing Third Quarter Results

The company reported its Q3 ended November 1, 2014, results on December 3. Net sales for the quarter were $210 million, down from $217 million in the prior year quarter. Adjusted loss was $0.11 per share, slightly better than the Zacks Consensus Estimate for a loss of $0.12 per share. We may add that most analysts had adjusted their estimates downwards after the company reported its preliminary results and updated the outlook for the third quarter in November.

According to the management, top and bottom line results were impacted by shipping delays at West Coast ports, longer lead times, increased cost of goods diverted to the East Coast as part of their contingency plan and increased air freight for critical goods.
For the fourth quarter, the company expects net sales and comparable store sales to be flat to down in the low single-digit percentage versus last year.
Downward Revisions

Analysts have been cutting their estimates for the company after quarterly results and lowered guidance. Zacks Consensus Estimates for the current and next year are currently ($0.12) per share and $0.08 per share respectively, down from $0.06 per share and $0.22 per share, 60 days ago. Declining estimates sent the stock back to Zacks Rank # 5 last month.

The Bottom Line

Declining store traffic and highly promotional environment continue to present challenges for retailers. The Zacks industry rank for “Retail-Apparel/Shoes” is currently 174 out of 265 (Bottom 34%).

Investors seeking exposure to the industry could look at Shoe Carnival, which currently carries a Zacks Rank #1 (Strong Buy).

 

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