3 Stocks Pushing The Retail Industry Lower

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The Retail industry as a whole closed the day up 0.2% versus the S&P 500, which was up 0.3%. Laggards within the Retail industry included Cache ( CACH), down 5.0%, Stein Mart ( SMRT), down 5.7%, Fairway Group Holdings ( FWM), down 1.8%, Sears Hometown & Outlet Stores ( SHOS), down 1.5% and Kirkland's ( KIRK), down 8.8%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Fairway Group Holdings ( FWM) is one of the companies that pushed the Retail industry lower today. Fairway Group Holdings was down $0.08 (1.8%) to $4.36 on heavy volume. Throughout the day, 580,329 shares of Fairway Group Holdings exchanged hands as compared to its average daily volume of 338,600 shares. The stock ranged in price between $4.26-$4.44 after having opened the day at $4.42 as compared to the previous trading day's close of $4.44.

Fairway Group Holdings Corp., together with its subsidiaries, operates as a food retailer. Fairway Group Holdings has a market cap of $133.0 million and is part of the services sector. Shares are down 75.5% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Fairway Group Holdings a buy, 1 analyst rates it a sell, and 5 rate it a hold.

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TheStreet Ratings rates Fairway Group Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on FWM go as follows:

  • The debt-to-equity ratio is very high at 54.53 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, FWM maintains a poor quick ratio of 0.96, which illustrates the inability to avoid short-term cash problems.
  • 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 Food & Staples Retailing industry and the overall market, FAIRWAY GROUP HOLDINGS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for FAIRWAY GROUP HOLDINGS is currently lower than what is desirable, coming in at 30.97%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.88% trails that of the industry average.
  • FWM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 79.77%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • FAIRWAY GROUP HOLDINGS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FAIRWAY GROUP HOLDINGS reported poor results of -$1.93 versus -$1.43 in the prior year. This year, the market expects an improvement in earnings (-$0.56 versus -$1.93).

You can view the full analysis from the report here: Fairway Group Holdings Ratings Report

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At the close, Stein Mart ( SMRT) was down $0.78 (5.7%) to $12.88 on heavy volume. Throughout the day, 116,515 shares of Stein Mart exchanged hands as compared to its average daily volume of 70,200 shares. The stock ranged in price between $12.81-$13.27 after having opened the day at $12.90 as compared to the previous trading day's close of $13.66.

Stein Mart, Inc. operates as an apparel retailer in the United States. The company offers fashion apparel for women and men, as well as accessories, shoes, and home fashions. It primarily focuses on 35-55 year old woman. Stein Mart has a market cap of $621.2 million and is part of the services sector. Shares are up 1.6% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Stein Mart a buy, no analysts rate it a sell, and none rate it a hold.

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

TheStreet Ratings rates Stein Mart as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on SMRT go as follows:

  • SMRT's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 2.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $34.84 million or 35.18% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.57%.
  • SMRT 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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.37 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • STEIN MART INC's earnings per share declined by 6.1% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, STEIN MART INC increased its bottom line by earning $0.57 versus $0.56 in the prior year. This year, the market expects an improvement in earnings ($0.73 versus $0.57).
  • The gross profit margin for STEIN MART INC is currently lower than what is desirable, coming in at 33.85%. Regardless of SMRT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.28% trails the industry average.

You can view the full analysis from the report here: Stein Mart 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.

Cache ( CACH) was another company that pushed the Retail industry lower today. Cache was down $0.07 (5.0%) to $1.32 on light volume. Throughout the day, 152,964 shares of Cache exchanged hands as compared to its average daily volume of 279,200 shares. The stock ranged in price between $1.32-$1.42 after having opened the day at $1.42 as compared to the previous trading day's close of $1.39.

Cache, Inc., together with its subsidiaries, operates as a mall-based and online woman's specialty retailer of apparel and accessories in the United States. Cache has a market cap of $42.6 million and is part of the services sector. Shares are down 74.8% year-to-date as of the close of trading on Wednesday. Currently there are 2 analysts who rate Cache a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Cache as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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

Highlights from TheStreet Ratings analysis on CACH go as follows:

  • 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 Specialty Retail industry. The net income has significantly decreased by 393.4% when compared to the same quarter one year ago, falling from -$1.61 million to -$7.92 million.
  • 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 Specialty Retail industry and the overall market, CACHE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CACHE INC is currently lower than what is desirable, coming in at 31.56%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -14.64% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 72.82%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 266.66% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • CACHE 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CACHE INC reported poor results of -$2.03 versus -$0.91 in the prior year. This year, the market expects an improvement in earnings (-$1.12 versus -$2.03).

You can view the full analysis from the report here: Cache 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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