Story updated at 10 a.m. to reflect market activity.
Tumi fell -9.6% to $18.06 in morning trading.
The firm also lowered its EPS estimates for the retailer. Jefferies analysts said a strategic reduction in promos drove a decreased selling rate for Tumi.
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Separately, 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 robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TUMI's revenue growth has slightly outpaced the industry average of 15.0%. Since the same quarter one year prior, revenues rose by 16.2%. 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 24.0% 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 ($0.94 versus $0.81).
- TUMI'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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.
- TUMI has underperformed the S&P 500 Index, declining 9.81% 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.
- Net operating cash flow has declined marginally to $33.66 million or 1.08% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: TUMI Ratings Report