Why Tumi Holdings (TUMI) Is Up Today

NEW YORK (TheStreet) -- Tumi Holdings (TUMI) was gaining 9.8% to $22.05 Friday following fourth quarter results that beat earnings and revenue expectations.

For the fourth quarter Tumi reported earnings of 31 cents a share, beating analysts' estimates of 30 cents a share by 1 cent. Revenue rose 16.2% from the year-ago period to $147.4 million in the quarter. Analysts expected revenue of $144.9 million.

Total comparable store sales for all direct-to-consumer channels increased 2.4% in the quarter, compared to a 14.6% increase in the fourth quarter of 2012.

"We advanced on several of our strategic objectives and delivered solid financial performance in 2013, despite the challenging retail environment that persisted throughout the year," CEO, president, and director Jerome Griffith said in a press release. "We expanded our global presence, broadened our product base and customer reach, and bolstered our standing as the go-to global premium travel lifestyle brand. Importantly, our growth was broad-based, stemming from our industry-leading product innovation, impactful marketing programs, channel penetration, and growth in existing and new markets."

Must read: Tumi Holdings Enters Oversold Territory

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TheStreet Ratings team rates TUMI HOLDINGS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"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 impressive record of earnings per share growth, revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TUMI HOLDINGS INC has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.81 versus $0.54).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 17.0%. Since the same quarter one year prior, revenues rose by 13.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TUMI's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that TUMI's debt-to-equity ratio is low, the quick ratio, which is currently 0.66, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has decreased to $8.95 million or 13.66% when compared to the same quarter last year. Despite a decrease in cash flow of 13.66%, TUMI HOLDINGS INC is in line with the industry average cash flow growth rate of -23.08%.
  • TUMI has underperformed the S&P 500 Index, declining 11.96% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • You can view the full analysis from the report here: TUMI Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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