Get Crafty With Jo-Ann Stores

So why are they doing "sew" well? First, Wal-Mart(WMT Quote - Cramer on WMT - Stock Picks) started dropping fabric from some of its stores. Said Webb: "I know that based on our field tracking, there are about 150 Wal-Mart stores that have withdrawn from the fabric business so far this year. And in general, we overlap with about 50% of their locations so using that logic about 75 stores will be seeing the benefit."

Also, Jo-Ann may be the beneficiary of likely potential inflation problems in clothing. In the Target(TGT Quote - Cramer on TGT - Stock Picks) May conference call, CEO Gregg Steinhafel said this of what he saw coming for the second half of the year:

"Well, we'd love nothing better to have the inflationary pressures go away. As you know, more of the food and the consumables were the leading edge indicators of what was happening, and we've been experiencing some inflation in those businesses since the fourth quarter and throughout the first half of this year. As we move into the year we're seeing more inflation in those other discretionary categories where we typically haven't seen them in the past. So there is some slight inflation in apparel due to raw material costing out of China, transportation expenses and lack of subsidies."

So wouldn't it make sense that people are starting to bake their own cakes, sew their own clothes and make their own quilts and pillows?

In addition, two of Jo-Ann's main competitors went out of business.

But you are probably saying that maybe this stock has had too much of a run-up and you missed the move because you were too busy buying Nordstrom(JWN Quote - Cramer on JWN - Stock Picks) instead on analyst recommendations.

Well, maybe not. There is a very good chance that this may be a UPOD situation setting up for when Jo-Ann reports in the second half of the year. During the May conference call, when CEO Darrell Webb was asked about quarterly guidance, he indicated that Jo-Ann doesn't comment but that recap of the outlook, sales and earnings in the first quarter were somewhat better than expected. "I would just say that so far in the second quarter we have not seen any evidence in a change of trend," he said.

« Previous Page

1 2 3

Next Page »