This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Market Preview: Bears on the Run

"At current price levels, we don't see many catalysts for further meaningful share price decline," Sterne Agee said. "However, do not foresee a rapid turnaround for the company given the loss in revenue base and shelf space over the past 5 years."

The firm said K-Swiss does seem to be having some success with new models but it still faces an uphill battle to win back shelf space from competitors like Nike (NKE), Adidas, and Reebok.

"We continue to expect modest backlog growth," Sterne Agee said. "The Clean Classic may provide some momentum for BTS, as retailers are talking about a return to white leather shoes, and Triathlon and running shoes are slowly becoming established. Given the small revenue base, success of one shoe can make a meaningful difference to the numbers. The big question is will any of these efforts translate to material revenue, and increased shelf space?"

At the same time, the balance sheet is still a work in progress.

"KSWS has been burning cash for the last three years, and at this point we do not see any reprieve until late FY12 or early FY13," the firm said. "The company ended 3Q11 with inventory +69.5%, or over 30 weeks of supply, which should continue to pressure GM% gross margins in the upcoming quarters. However, we believe cutting SG&A and managing inventory growth should help the company's financial position."

Sterne Agee is expecting a loss of 36 cents a share in the quarter on revenue of $41.3 million, and it noted that K-Swiss is in the process of negotiating an asset-based line of credit to "ensure liquidity" through the end of this year.

Check out TheStreet's quote page for K-Swiss for year-to-date share performance, analyst ratings, earnings estimates and much more.

Other companies opening their books on Friday include Barnes Group (B), Brookfield Asset Management (BAM), Campbell Soup (CPB), Constellation Energy (CEG), H.J. Heinz (HNZ), Lifepoint Hospitals (LPNT), Lincoln Electric (LECO), Pilgrims Pride (PPC), and Yingli Green Energy (YGE).

The economic calendar features the consumer price index for January at 8:30 a.m. ET, the consensus view is for an increase of 0.3% with the core number ticking up 0.1% ; and leading indicators for January at 10 a.m. ET, economists are expecting a 0.5% boost, according to Briefing.com.

3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $127.60 0.00%
AMAT $21.76 0.00%
BIDU $211.86 0.00%
SPY $209.85 0.00%
FB $83.09 0.00%

Markets

DOW 18,034.93 +208.63 1.17%
S&P 500 2,100.40 +19.22 0.92%
NASDAQ 4,994.6020 +62.7870 1.27%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs