Small Cap Retailers Hoping to Cash In on Holiday Season

Posted On December 10, 2014 | by AllenCaron
Photo courtesy nancychovancek.net

Photo courtesy nancychovancek.net

Much has been made in recent days of the apparently weak start to the holiday season for retailers. In spite of some incredible offers meant to stoke the modern shoppers “want it now” mentality like same-day delivery and in-store pickup, retail sales in the early days of the season have been lagging past years.

But given the fact that the steep decline in gas prices (one study noted that American consumers are reaping $8 billion a day in extra cash due to the lower prices) means more money for holiday shoppers to spend, will the buying pick up as Christmas nears?

Last year at about this time we featured four small cap retailers, all popular apparel and accessory companies who no doubt have a lot riding on sales during the holidays.

Children’s Place Retail Stores, Inc (Nasdaq: PLCE), based in Secaucus, NJ and operator of  the popular children’s clothing store The Children’s Place, owns more than 1,100 stores and employs more than 4,000 people full-time in the US and Canada and recently expanded into Arab Gulf states and Saudi Arabia. During its recent third quarter earnings call, management guided investors to expect fourth quarter adjusted net income per diluted share between $0.83-$0.93. Last year’s adjusted net income per diluted share for the fourth quarter was $0.96. PLCE closed Nov. 18, 2013, at $55.25 with a market cap of $1.23 billion. PLCE closed Dec. 11 at $53.95, up 65 cents for the day, with a market cap of $1.14 billion. Their 52-week trading range is $44.54 – $58.48.

Another specialty retailer, Canton, MA-based Destination XL Group, Inc (Nasdaq: DXLG), offers big and tall men’s apparel in nearly 400 stores in the US and the UK. The company has recently noted that it plans to have more than 200 Destination XL stores by the end of 2015. Last November 20, DXLG announced a $6.3 million loss during its fiscal year third quarter. When we last checked, DXLG closed Nov. 18, 2013, at $6.60 with a market cap of $336.16 million. DXLG closed Dec. 11 at $4.92, down 4 cents for the day, with a market cap of $240 million. Their 52-week trading range is $4.29 – $6.62.

Trendy clothing retailer American Apparel Inc. (NYSEMKT: APP), based in Los Angeles sells basic fashion items and accessories for men, women and children in more than 250 retail stores in 20 countries. In addition, the company offers wholesale undecorated apparel products to third-party screen printing companies. The company is vertically integrated and makes each product in its Los Angeles facilities, minimizing the use of subcontractors. The company has recently experienced a shakeup in management. Scott Brubaker is currently interim CEO. When we looked last year, APP closed Nov. 18, 2013 at $1.22 with a market cap of $134.62 million. It closed Dec. 11 at $0.55, up 1 cent for the day, with a market cap of $96 million. Its 52-week trading range is $0.46 – $1.45.

Vera Bradley, Inc (Nasdaq: VRA), based in Fort Wayne, IN, designs and markets fashion accessories for women, including handbags, luggage, accessories and cases. The company operates approximately 80 retail stores and offers Vera Bradley products to over 3,000 specialty retailers in the US. On December 2 the company announced that industry icon Harry Cunningham, who has 25 years of experience in store design and visual marketing most recently for Saks Fifth Avenue, would become the head of store development. When we last checked VRA closed Nov. 18, 2013 at $24.40 with a market cap of $989.15 million. VRA closed Dec. 11 at $21.67, up 6 cents for the day, with a market cap of $882 million. Their 52-week trading range is $18.75 – $30.

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