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"We rate TUMI HOLDINGS INC (TUMI) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share and expanding profit margins. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TUMI's revenue growth has slightly outpaced the industry average of 17.1%. Since the same quarter one year prior, revenues rose by 19.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TUMI HOLDINGS INC has improved earnings per share by 16.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TUMI HOLDINGS INC increased its bottom line by earning $0.81 versus $0.54 in the prior year. This year, the market expects an improvement in earnings ($0.85 versus $0.81).
- Net operating cash flow has increased to $12.07 million or 34.87% when compared to the same quarter last year. Despite an increase in cash flow, TUMI HOLDINGS INC's average is still marginally south of the industry average growth rate of 41.56%.
- TUMI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.78 is somewhat weak and could be cause for future problems.
- 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 Textiles, Apparel & Luxury Goods industry and the overall market, TUMI HOLDINGS INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: TUMI Ratings Report