NEW YORK ( TheStreet) -- Gordman's Stores (Nasdaq: GMAN) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time. Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Multiline Retail industry. The net income has decreased by 10.3% when compared to the same quarter one year ago, dropping from $3.27 million to $2.94 million.
- GORDMANS STORES INC's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.26 versus $0.49).
- GMAN's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.45 is very weak and demonstrates a lack of ability to pay short-term obligations.
- 45.30% is the gross profit margin for GORDMANS STORES INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 2.50% trails the industry average.
- Net operating cash flow has fallen to -$1.81 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.