===Leslie's (LESL) guides JunQ EPS and revs below consensus

 

Leslie's guides Q3 EPS and revs below consensus; lowers FY23 outlook due to traffic declines in Residential and Pro businesses; CFO Steve Weddell stepping down, effective August 7; to be succeeded by Scott Bowman

• Co issues downside guidance for Q3 (Jun), sees EPS of $0.39-0.41, excluding non-recurring items, vs. $0.69 FactSet Consensus; sees Q3 (Jun) revs of $611 mln vs. $701.33 mln FactSet Consensus.
• Co issues downside guidance for FY23 (Sep), sees EPS of $0.28-0.32, excluding non-recurring items, vs. $0.77 FactSet Consensus; sees FY23 (Sep) revs of $1.43-1.45 bln vs. $1.6 bln FactSet Consensus.
  • Prior guidance was EPS of $0.78-$0.86 and revs of $1.560-$1.640 bln
• Co added, "Our fiscal third quarter results were well below our expectations as low double digit traffic declines in our Residential and Pro businesses drove negative comps across both discretionary and non-discretionary categories. While abnormal weather continued to pressure traffic levels, customer surveys conducted towards the end of the quarter also indicated increased price sensitivity and that consumers entered the pool season with a greater than normal amount of chemicals leftover from last year."
• Co also announced that Scott Bowman has been appointed CFO, effective August 7, 2023. Mr. Bowman will join the company on July 17, 2023 and serve as Chief Financial Officer Designate through August 6, 2023. Steve Weddell, who is stepping down as CFO effective August 7, 2023, will remain an advisor to the Company through December 31, 2023 to facilitate the transition.

• Leslie's (LESL) is making some waves today in the swimming pool space. Leslie's is the largest US retailer of swimming pool supplies (cleaning chemicals, equipment, accessories, toys).
• LESL's Q3 (Jun) guidance last night was well below analyst expectations and it lowered FY23 guidance. The company cited low double digit traffic declines in its Residential and Pro businesses, which drove negative comps across both discretionary and non-discretionary categories. While abnormal weather pressured traffic levels, LESL also said surveys indicated increased price sensitivity and that consumers entered the pool season with a greater than normal amount of chemicals leftover from last year.
• This guidance runs counter to the general theme that homeowners are investing in their homes to make them better as they decide not to move and forfeit their low rate mortgages. Granted, LESL focuses more on pool supplies rather than installations, so we do not want to read too much into this, but it is still a bit disconcerting. Its weak guidance is dragging down pool distributors/manufacturers like Pool Corp. (POOL -4.1%) and Latham Group (SWIM -0.1%) although they have recovered off their lows.
• One related company that has impressed us is Trex (TREX 69.87 -0.68). It is a supplier of wood-alternative decking and railing, so it's not a swimming pool company, but it is in the backyard sphere. It was notably more positive on its Q1 call in May than it had been on prior calls. So this LESL guidance makes us a little nervous ahead of TREX's Q2 report in early August, but not really. TREX sounded quite positive heading into this summer season, but we will see. Read our July 3 InPlay profile for full details on TREX.

=Flexion Therapeutics (FLXN) : weak revenue guidance

• Flexion Therapeutics released preliminary fourth-quarter revenue and guidance for 2019. The company said it expects fourth-quarter revenue of $9.5 million and full-year revenue of $22.5 million. Wall Street analysts polled by FactSet expected sales of $10.2 million for the quarter and $23.1 million for the year. The company also said it expects $65 million to $80 million of product revenue for 2019, while analysts modeled revenue of $97.8 million.

Flexion Therapeutics sees Q4 and FY19 revenue below consensus as Zilretta ramps

Sees Q4 revs +36% Q/Q to $9.5 mln vs $10.16 mln S&P Capital IQ Consensus; Total revenue for the full-year 2018 is estimated to be $22.5 million.

Flexion anticipates 2019 ZILRETTA product revenue $65-80 mln vs. $97.8 mln consensus.

"2018 was a foundational year for ZILRETTA, and in the first full year of the launch, we saw strong product uptake as we established a broad and growing base of prescribers. Furthermore, the clinical feedback on ZILRETTA from physicians and patients alike continues to be overwhelmingly positive and gratifying," said Michael Clayman, M.D., President and Chief Executive Officer. "We now enter 2019 with a product-specific J code (J3304), which we believe will be a key driver of continued ramp, as it provides prescribers with a well-known and clearly defined reimbursement mechanism that is utilized by both Medicare and private payers. Each year, roughly five million people in the U.S. receive intra-articular injections for osteoarthritis knee pain, and we believe ZILRETTA will play an increasingly significant role in the treatment paradigm for this large and growing patient population."

e.l.f. Beauty (ELF) reaffirms prior FY17 EPS and revenue guidance

 








e.l.f. Beauty reaffirms prior FY17 EPS and revenue guidance

Co guides to FY17 sales of $270 mln, in-line with CapitalIQ consensus of $270.2 mln. Co guides to FY17 adjusted EPS of $0.55 vs $0.56 consensus.
• 2016-2019 Growth Algorithm: Reflecting current category trends, co is updating the compound annual growth rates included in its growth algorithm. Co now expects a compound annual net sales and Adjusted EBITDA growth rate of 10-15% from fiscal 2016 to 2019.

J. Jill (JILL) issues downside Q3 guidance

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J. Jill issues downside Q3 guidance citing lower than expected sales trend across both our retail and direct channels

• Co issues downside guidance for Q3 (Oct), sees EPS of $0.08 to $0.10, excluding non-recurring items, vs. $0.19 Capital IQ Consensus Estimate.  Adjusted diluted earnings per share excludes approximately $0.6 million of non-recurring expenses associated with the company's transition to a public company.
• For the third quarter 2017, the company now expects total company comparable sales of -3% to -5%, with a moderate decline in gross margin as compared to last year. 

=Tyson Foods (TSN) increases FY EPS guidance

Tyson Foods increases FY EPS guidance 'primarily due to much better than expected earnings in the Beef segment'

• FY 17 Adj. EPS guidance, which ends Saturday, has been increased to an adjusted $5.20-5.30 per share, up from $4.95-5.05, primarily due to much better than expected earnings in the Beef segment.
  • Current Cap IQ Consensus estimates FY 17 adj. EPS of $5.06
• The company plans to reduce headcount by ~450 positions across several areas and job levels.
  • In its fiscal fourth quarter earnings report, Tyson Foods plans to report restructuring and other charges of approximately $140 - $150 million, composed of an approximately $70 million impairment for costs related to in-process software implementations, $45 - $50 million in employee termination costs and $25 - $30 million in contract termination costs.
• Guidance for FY 18 adj. EPS of $5.70-5.85vs $5.33 Cap IQ Consensus

=Tahoe Resources (TAHO) raises gold production guidance

Tahoe Resources raises gold production guidance

Revised 2017 Gold Guidance by Mine

• The Company has increased its guidance for gold production to 400,000 to 450,000 ounces for 2017. The increase in the Company's revised gold production guidance for the remainder of 2017 is due in large part to the positive mine plan reconciliation experienced at La Arena year to date.
• The positive production reconciliation at La Arena has prompted the Company to initiate a drilling program in the fourth quarter to better define the mineralization below the Calaorco pit with the goal of extending the mine life.

Capital Projects Update

• Shahuindo Expansion - Construction of the initial 12,000 tpd crushing and agglomeration circuit is now 90% complete, with commissioning anticipated in the coming weeks.
• Bell Creek Shaft Project - The Bell Creek Shaft Project continues on schedule and budget. Excavation of the first two pilot raises is complete and shaft benching to enlarge to the final dimension continues to progress as expected.

Hibbett Sports (HIBB) announces dismal earnings and same-store-sales guidance

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Sports retailer Hibbett Sports (HIBB) warned that it expects second-quarter same-store sales to fall about 10%, citing "very challenging sales trends." The company said the decline, combined with "significant" pressure on gross margin, would push it to a loss of 19 cents to 22 cents for the quarter. The current FactSet consensus is for second-quarter earnings per share of 15 cents. The company said it is launching an e-commerce site, www.Hibbett.com, that will offer footwear, clothing and equipment. "Despite the difficult retail environment, the company remains focused on improving its business for the long term," Chief Executive Jeff Rosenthal said in a statement. "Launching an e-commerce site has been a key strategic goal for Hibbett, and we took time to invest in our omni-channel infrastructure to do it the right way." The stock has fallen 47% in 2017, while the S&P 500 (SPX) has gained 10.4%.

=Ascena Retail Group (ASNA) lowers Q3 outlook

Ascena Retail Group lowers Q3 Outlook :

Ascena Retail Group lowers Q3 outlook, 'cites highly elevated promotional environment have persisted at levels significantly above our expectations'

• "Industry-wide traffic headwinds and a highly elevated promotional environment have persisted at levels significantly above our expectations, resulting in a miss to our third quarter sales and earnings outlook. We have adjusted our second-half outlook to reflect this environment and limited near term visibility, and no longer believe it appropriate to expect a stabilization of traffic and resulting normalization of comp sales against softer demand in the year-ago period."

The Company's revised third quarter and full year fiscal 2017 sales and earnings outlook is as follows:

• Period Comparable Sales Non-GAAP EPS Q3 FY17 Down 8% $0.04 - $0.06 (Prior $0.07-0.12), Capital IQ consensus $0.09.
• Full Year FY17 Down 7% - Down 6% to $0.10 - $0.15 (Prior $0.37-0.42), Capital IQ consensus $0.38.
  • "The specialty retail sector is in a period of unprecedented secular change that is disruptive to traditional business models, and we believe operating conditions in our sector are likely to remain challenging for the next 12 to 24 months.
• Implementation of Change for Growth enterprise transformation program is well underway,These initiatives, along with an expanded structural cost reduction scope, are now expected to deliver $250 to $300 million in cost savings as compared to prior $150 million target. Co plans to provide a timeline and additional context regarding this increased target on Q3 earnings call, scheduled for June 5th.

Trivago (TRVG) guides above estimates

  

Trivago NV (TRVG) raised its outlook for the year following the earnings release of majority shareholder Expedia (EXPE).  U.S. shares of Düsseldorf, Germany-based Trivago rose 3.8% to $15.80 after hours. "Given our strong start to the year, we have increased our full-year guidance and now expect annual revenue growth to be around 50% in 2017," said Trivago Chief Financial Officer Axel Hefer in a statement. Trivago reports quarterly results on May 15. Expedia shares slipped 2% after hours as the online travel company's earnings missed Wall Street estimates by a penny.

GameStop (GME) reported earnings on Thur 23 March 2017 (a/h)

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• GameStop crumbles on weak 2017 profit guidance

The Grapevine, Texas-based video-game retailer posted mixed fourth-quarter financial results and guided analysts lower on earnings for the current year.

GameStop stock was down almost 11%, near 21.35, in after-hours trading on the stock market today. During the regular session Thursday, GameStop fell 0.5% to 23.96.

Results: The company earned $2.38 a share excluding items, down 1% year over year, on sales of $3.045 billion, down 14%, in the quarter ended Jan. 28. Analysts polled by Thomson Reuters expected Grapevine to post adjusted earnings of $2.29 a share on sales of $3.095 billion.

Outlook: GameStop said it expects adjusted earnings of $3.25 a share this year, based on the midpoint of its guidance, compared with Wall Street's target of $3.73 a share. It is modeling for flat revenue this year, with sales in a range of down 2% to up 2%. In fiscal 2016, GameStop posted sales of $8.61 billion, down 8.1%.

=Gildan Activewear (GIL) reported earnings on Thur 23 Feb 17 (b/o)

Gildan Activewear beats by $0.03, misses on revs; guides FY17 EPS below consensus; raises dividend 20%; approves buyback up 5% of shares; Board approves new shareholder rights plan:

• Reports Q4 (Dec) earnings of $0.32 per share, $0.03 better than the Capital IQ Consensus of $0.29; revenues rose 8.1% year/year to $587.9 mln vs the $604.14 mln Capital IQ Consensus, reflected sales increases of 14.4% in the Printwear segment and 1.2% in Branded Apparel. Growth was primarily driven by the impact of the Alstyle and Peds acquisitions and organic unit sales volume growth in Printwear, partly offset by the impact of significant retailer inventory destocking and the anticipated impact of the exit of private label programs in Branded Apparel, as well as lower net selling prices in Printwear. The acquisitions of Alstyle and Peds contributed ~$50 million in sales in the fourth quarter of 2016.
• Consolidated gross margin in the fourth quarter of 2016 was 26.7%, in line with the same period last year, as the benefits from lower raw material and other input costs were largely offset by lower net selling prices.
• Co issues downside guidance for FY17, sees EPS of $1.60-1.70 vs. $1.72 Capital IQ Consensus on projected high single digit consolidated net sales growth. Adjusted EBITDA for 2017 is expected to be in the range of $555 to $585 million. The Company is also projecting another record year of strong free cash flow generation in excess of $400 million. Net sales in 2017 in the Printwear and Branded Apparel segments are each expected to increase in the high single digit range.
• The Board of Directors has approved a 20% increase in the amount of the current quarterly dividend and has declared a cash dividend of $0.0935 per share, payable on April 3, 2017 to shareholders of record on March 9, 2017.
• Co announced that it had received approval from the Toronto Stock Exchange for a new normal course issuer bid commencing on February 27, 2017 to purchase for cancellation up to 11,512,267 common shares, representing ~5% of the Company's issued and outstanding common shares. As of February 17, 2017, the Company had 230,245,359 common shares issued and outstanding.
• Co also announced that its Board of Directors has approved a new shareholder rights plan which will become effective upon confirmation and approval by the shareholders of the Company at the annual meeting of shareholders to be held on May 4, 2017. The Rights Plan will ensure that the Company and its shareholders continue to receive the benefits associated with the Company's current shareholder rights plan, which is due to expire at the close of business on the date of the Company's upcoming annual meeting of shareholders. 

=Target (TGT) issues downside guidance

TGT issues downside guidance due to softer-than-expected holiday sales  :

• Co announced that comparable sales during the combined November/December period decreased 1.3%.
  • Comparable sales in Target stores declined more than 3%, partially offset by digital sales growth of more than 30%.
  • For those two months, total sales decreased 4.9 percent, reflecting the impact of the December 2015 sale of the Company's pharmacy and clinic businesses.
  • As a result of this softer-than-expected sales performance, the Company updated its fourth quarter and full-year 2016 guidance.
• Co issues downside guidance for Q4 (Jan), sees EPS of $1.45-1.55 vs. $1.65 Capital IQ Consensus Estimate; down from prior guidance of $1.55-1.75.
  • Now expects Q4 comparable sales in the range of (1.5) percent to (1.0) percent, compared with prior guidance of (1.0) percent to 1.0 percent.
• Co issues downside guidance for FY17 (Jan), sees EPS of $5.00-5.10 vs. $5.20 Capital IQ Consensus Estimate.
• "While we significantly outpaced the industry's digital performance, the costs associated with the accelerated mix shift between our stores and digital channels and a highly promotional competitive environment had a negative impact on our fourth quarter margins and earnings per share,"

Ascena Retail Group (ASNA) lowers guidance

Ascena Retail Group reports holiday comps down 3.1%; lowers Q2, FY17 EPS guidance below consensus :

• Reports holiday comps down 3.1% (guided quarter down 4-5%)
  • Ann Taylor -8.2%, Loft -1.8%, Maurices -7.1%, Dressbarn -4.6%, Lane Bryant -5.1%, catherines +1.6%
• Lowers Q2 EPS to ($0.11-0.08) from ($0.05)-0.00 vs ($0.03) Capital IQ Consensus.
• Lowers FY17 EPS to $0.37-0.42 from $0.60-0.65 vs. $0.58 consensus.

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=Macy's (M) lowers FY17 EPS guidance

Macy's lowers FY17 EPS guidance; comps fell 2.1% in the months of November and December; announces restrucuring :

• Comparable sales on an owned plus licensed basis declined by 2.1% in the months of November and December 2016 combined, compared to the same period last year. On an owned basis, comparable sales declined by 2.7 percent in the combined November/December period.
• "While our sales trend is consistent with the lower end of our guidance, we had anticipated sales would be stronger. We believe that our performance during the holiday season reflects the broader challenges facing much of the retail industry. We are pleased with the performance of our digital business, with double-digit gains at both macys.com and bloomingdales.com; however, store sales continued to be impacted by changing customer behavior. Our apparel business, which includes women's, men's and children's, performed well, with particular strength in active and cold-weather merchandise. Sales were also strong in fine jewelry, as well as furniture and bedding, reflecting the success of our initiatives in those categories. However, ongoing weakness in handbags and watches negatively impacted our results."
• Macy's maintains its previously provided full-year sales guidance of a 2.5-3.0% decrease in comparable sales on an owned plus licensed basis, and expects to come in at the lower end of that guidance, with comparable sales on an owned basis to be ~50 basis points lower.
• Lowers FY17 adj. EPS to $2.95 to $3.10 (compared with previous guidance of $3.15 to $3.40) vs. $3.28 consensus.

Co announced a series of actions to streamline its store portfolio, intensify cost efficiency efforts and execute its real estate strategy. These actions bolster the company's strategy to further invest in omnichannel capabilities, improve customer experience and create shareholder value. The actions include:

• The closure of 68 stores and the reorganization of the field structure that supports the remaining stores, reinforcing the strategy of fewer stores with better customer experience. These store closures are part of the ~100 closings announced in August 2016.
• The significant restructuring of the Macy's, Inc. operations to focus resources on strategic priorities, improve organizational agility and reduce expense.
• The sale of properties consistent with the previously announced real estate strategy.

The actions announced today are estimated to generate annual expense savings of ~$550 million, beginning in 2017, enabling the company to invest an additional $250 million in growing the digital business, store-related growth strategies, Bluemercury, Macy's Backstage and China. These savings, combined with savings from initiatives implemented in early 2016, exceed the $500 million goal communicated in fall of 2015, one year earlier than expected.

Kohl's (KSS) lowers FY17 EPS guidance

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Kohl's lowers FY17 EPS guidance below consensus; co cites lower than expected gross margins due to the mix and timing of the sales and the competitive promotional environment; Nov-Dec comps -2.1% :

• Co issues lowered guidance for FY17 (Jan), sees EPS of $3.60-3.65 from $3.80-4.00 vs. $3.93 Capital IQ Consensus Estimate.
• Co reported that its comparable sales decreased 2.1 percent in the fiscal months of November and December 2016 combined, compared with the prior year period. Total sales for the combined fiscal November and December period decreased 2.7 percent. 
• "Sales were volatile throughout the holiday season. Strong sales on Black Friday and during the week before Christmas were offset by softness in early November and December." From a line of business perspective, Men's, Home and Footwear were the strongest categories while Accessories was the most challenging.
• The change in guidance is primarily a result of lower than planned sales for the quarter. Gross margin is projected to be lower than plan due to the mix and timing of the sales and the competitive promotional environment. SG&A expenses are projected to be as planned. Inventories per store at the end of the fourth quarter are projected to decrease from prior year levels in the mid-to-high single digit range.
• Peers of Note: JCP, M, DDS, JWN, SHLD, SHOS

Inovalon (INOV) cuts 2016 revenue and earnings guidance

• Lowers FY16 guidance due to inability to enter into expected collaboration agreement as a result of unforeseen circumstances impacting counter-party.

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On Monday, the Maryland-based technology company said it reduced its guidance as it was unable to enter a collaboration agreement for an application in development, as a result of "unforeseen circumstances impacting the counter-party."

"While this is certainly not the situation we expected or desired, it does demonstrate the level of market opportunity for our platform capabilities, the significance of value that can be driven by those capabilities, and the size and scale at which Inovalon is being called upon to partner and deliver them," CEO Keith Dunleavy said in a statement.
Inovalon now expects full-year earnings per share between 32 cents and 33 cents and revenues in the range of $426 million to $428 million. The company previously forecast earnings per share of 39 cents to 46 cents and revenue between $470 million to $490 million.

Analysts previously projected Inovalon to report full-year earnings of 44 cents per share on revenue of $472.8 million, according to Thomson Reuters consensus estimates.

The stock has fallen more than 44 percent year to date.

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• Buy point about 6 weeks after guidance drop:

Select Comfort (SCSS) reported earnings on Wed 19 Oct 2016 (a/h)

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Select Comfort misses by $0.01, misses on revs; co lowers FY16 EPS and revenue guidance given its soft outlook :

• Reports Q3 (Sep) earnings of $0.56 per share, $0.01 worse than the Capital IQ Consensus of $0.57; revenues fell 1.6% year/year to $368 mln vs the $391.03 mln Capital IQ Consensus.
• Co lowers FY16 EPS guidance to $1.15-1.25 vs. $1.23 Capital IQ Consensus Estimate, down from $1.25-1.45
• Co also lowers revenue guidance...
  • The outlook assumes high single-digit sales growth for the full year (co prior guidance: The outlook assumes low-teen sales growth for the full year)
    • The outlook also assumes an 11% increase in store count in 2016 and capital expenditures of $65 million, compared with $86 million in 2015
    • "Our outlook does not contemplate a further deterioration of the consumer spending environment."

Ericsson (ERIC) releases preliminary Q3 results that were worse than expected

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Ericsson sees Q3 revs below consensus:

• Co issues downside guidance for Q3 (Sep), sees Q3 (Sep) revs of SEK51.1 bln vs. SEK53.62 bln Capital IQ Consensus Estimate.
• Sales declined by -14% YoY, driven by slower development in Segment Networks where sales declined by -19%.
• Negative industry trends from first half 2016, with weaker demand for mobile broadband, especially in markets with weak macro- economic environment, have further accelerated.
• Gross margin declined to 28% (34%) following lower volumes in Segment Networks, lower mobile broadband capacity sales, and higher share of services sales.
• Operating income declined to SEK 0.3 bln (SEK5.1 bln), including restructuring charges of SEK 1.3 bln.