Their plan is to liquidate or sell the retail operation that has been in business for 113 years, the Journal said.
In the court papers, Alco said the effects of the "lingering economic slowdown" were to blame for the filing, the Journal reported. As of July 2014, Alco reported assets of about $222 million and debts of about $162 million.
TheStreet Ratings team rates ALCO STORES INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALCO STORES INC (ALCS) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Currently the debt-to-equity ratio of 1.82 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.12, which clearly demonstrates the inability to cover short-term cash needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Multiline Retail industry and the overall market, ALCO STORES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for ALCO STORES INC is currently lower than what is desirable, coming in at 28.58%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.24% trails that of the industry average.
- ALCO STORES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, ALCO STORES INC swung to a loss, reporting -$7.36 versus $0.58 in the prior year.
- 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 Multiline Retail industry. The net income has significantly decreased by 1713.9% when compared to the same quarter one year ago, falling from $0.50 million to -$8.02 million.
- You can view the full analysis from the report here: ALCS Ratings Report