NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Specialty Retail industry and the overall market, COLLECTIVE BRANDS INC's return on equity is below that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 51.3% when compared to the same quarter one year ago, falling from $54.20 million to $26.40 million.
- 39.50% is the gross profit margin for COLLECTIVE BRANDS INC which we consider to be strong. Regardless of PSS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.00% trails the industry average.
Collective Brands, Inc. primarily engages in the wholesale and retail of footwear and related accessories worldwide. The company has a P/E ratio of 9.9, equal to the average retail industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Collective has a market cap of $814.4 million and is part of the
industry. Shares are down 36.4% year to date as of the close of trading on Friday.
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