For Immediate Release
Chicago, IL – September 07, 2016 – Zacks Equity Research highlights Burlington Stores, Inc. (BURL) as the Bull of the Day and Movado Group, Inc. (MOV) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Mylan (NASDAQ:MYL) NV (MYL), Allergan Inc (NYSE:AGN_pa). ( AGN) and Valeant (VRX).
Here is a synopsis of all five stocks:
Burlington Stores, Inc. (BURL) is a rare retailer that not only beat on the earnings estimate but raised full year guidance. This Zacks Rank #1 (Strong Buy) is expected to grow earnings by the double digits both this year and next.
Burlington Stores is a off-price retailer with 570 stores in 45 states and Puerto Rico. It is more than just the old Burlington Coats stores, however.
It sells women's ready-to-wear apparel, menswear, youth apparel, baby, beauty, footwear, accessories, as well as coats.
Big Beat in the Second Quarter
On Aug 25, Burlington reported fiscal 2016 second quarter results and blew by the Zacks Consensus by 9 cents as the off price model remained hot. Earnings were $0.39 compared to the Zacks Consensus of $0.30.
It has an excellent track record of beating.
Burlington hasn't missed since it went IPO in 2013.
Net sales rose 9.7% to $1.26 billion. Comparable store sales jumped 5.4% while gross margin rose 40 basis points to 39.6%.
Merchandise inventories stayed in check, falling to $745 million versus $802.3 million last year as comparable store inventory fell 7%.
Raised Full Year Guidance
Burlington is a rare retailer to also raise full year guidance based on strong trends it sees heading into the fall season.
It expects net sales to rise in the range of 7.8% to 8.3% with comparable store sales to trend between 3.6% to 4.1%.
It will also open 25 net new stores.
The analysts liked what they heard as they raised their estimates to match the company's raised guidance.
The fiscal 2016 Zacks Consensus Estimate jumped to $2.97 from $2.79 just 60 days ago. Earnings are now expected to rise 29%.
The analysts are also bullish on fiscal 2017. The Zacks Consensus Estimate jumped to $3.47 from $3.26 over the prior 2 months. That's another 17% earnings growth.
Movado Group, Inc. (MOV) continues to struggle in a depressed luxury retail environment. This Zacks Rank #5 (Strong Sell) recently cut its full year guidance for the second time this year.
Movado Group makes watches in its Switzerland manufacturing facilities under the brands Movado, Ebel, Concord, ESQ Movado, Coach, Tommy Hilfiger, Hugo Boss, Juicy Couture, Lacoste and Ferrari (NYSE:RACE). It also operates about 38 Movado retail stores globally.
Earnings Miss and Sales Fall
On Aug 25, Movado reported fiscal second quarter 2017 results and missed on the Zacks Consensus Estimate by 4 cents. Earnings were $0.27 versus the consensus of $0.31.
It was the first earnings miss in the last 5 quarters.
Net sales fell 12% to $128.1 million from $145.6 million in the year ago quarter. On a constant dollar basis, they fell 11.2%.
The company called it a "challenging retail and economic environment."
Cutting Full Year Guidance Again
Given the market conditions in both the fashion watch market and in luxury retail, in general, it's not surprising that Movado cut its full year guidance for the second time this year.
It cut its full year EPS guidance last quarter by 30 cents.
Net sales for the year are now expected to be in the range of $550 million to $560 million.
However, it is optimistic about the upcoming holiday season, including increasing its television advertising to support Movado in the United States.
The analysts aren't optimistic, however.
Fiscal 2017 earnings estimates were cut in the last 30 days. The Zacks Consensus Estimate has fallen to $1.41 from $1.61 just 90 days ago. Earnings are expected to decline 31% in fiscal 2017. The company made $2.06 last year.
Estimates are trending lower for fiscal 2018 as well. The fiscal 2018 Zacks Consensus has fallen to $1.54 from $1.73 over the last 30 days.
Additional content:
Pharma Roundup: Mylan’s Antitrust Probe, Allergan Limits Drug Price Hikes
On Tuesday, New York Attorney General Eric Schneiderman opened an investigation into Mylan NV (MYL) that focuses on the drugmaker’s contracts with local school districts to purchase its EpiPens.
In a statement, Schneiderman said “No child’s life should be put at risk because a parent, school or health-care provider cannot afford a simple, life-saving device because of a drug-maker’s anticompetitive practices.”
According to Bloomberg , the probe will be broad, but one of the main focus points is whether or not its EpiPens4School program, which offered a significant discount on the drug, locked schools into anti-competitive contracts.
Last month, the pharma leader drew widespread criticism after it was discovered that the company increased the price of EpiPens over 400% over the last several years. To put that in perspective, the drug cost $57 a shot when Mylan acquired it in 2007, and now, a two-pack of EpiPens costs more than $600.
Shortly afterwards, Mylan announced it would take several steps to make the lifesaving allergy treatment more affordable to patients.
Allergan CEO Pledges Limit on Drug Price Increase
Also on Tuesday, healthcare giant Allergan Inc.’s (AGN) CEO Brett Saunders has offered a promise to limit price hikes on the drugs it sells, writing in a blog post that “I understand the public outcry and add my voice to the condemnation of these behaviors.”
Saunders argues that there is a “long-standing unwritten social contract” between patients, physicians, policy makers, and the greater public, and “Those who have taken aggressive or predatory price increases have violated this social contract!”
While not explicitly naming names, it’s pretty clear he is referring to Martin Shkreli and Turing Pharmaceuticals, Valeant ( VRX), and Mylan’s recent EpiPen controversy.
Allergan’s pricing pledge is significant, as it opposes the common practice taken by fellow biotech and pharmaceutical companies: raising drug prices two to three times every year. This usually means that drug costs can significantly exceed the annual inflation rate.
“For our industry to remain a vibrant and important part of the healthcare ecosystem, Allergan commits to this social contract and I encourage others to formulate their own self-policing actions,” Saunders continues.
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BURLINGTON STRS (BURL): Free Stock Analysis Report
MOVADO GRP INC (MOV): Free Stock Analysis Report
MYLAN NV (MYL): Free Stock Analysis Report
ALLERGAN PLC (AGN): Free Stock Analysis Report
VALEANT PHARMA (VRX): Free Stock Analysis Report
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