Analysts like new Body Central CEO
Body Central Corp. last week named 40-year industry veteran Brian Woolf as its new CEO and from what analysts are saying, he could be the right person to turn around the Jacksonville-based fashion retailer's sagging sales.
Woolf most recently was group president for Lane Bryant stores and previously was CEO of women's specialty retailer Cache Inc.
William Blair & Co. analyst Sharon Zackfia said in a research note that Cache's stock increased more than fourfold during Woolf's tenure as CEO from 2000-08.
"In addition, Cache's total revenues increased at a compound annual rate of more than 6 percent from 2000 through 2007 while the company posted an average same-store sales increase of roughly 3 percent over the same period," she said.
Zackfia said Woolf had a difficult task at Lane Bryant, since he joined the company during the recession.
"Still, comps improved from an average mid-teens decline from July 2008 through January 2010 to an average low-single-digit increase over the remainder of Mr. Woolf's tenure," she said.
Comps are comparable-store sales, which are sales at stores open for more than one year, and are a key indicator of a retailer's performance.
Although analysts say Woolf is a strong hire, they don't expect a quick turnaround for Body Central, which reported a comparable-store sales drop of 8.1 percent in 2012. Zackfia maintains a "market perform" rating for the company's stock.
Robert W. Baird analyst Erika Maschmeyer said the hiring of a permanent CEO after a six-month search is a positive, but she maintains a "neutral" rating.
"While we are encouraged by the added clarity around leadership, we anticipate a continued protracted recovery for merchandising trends and fundamentals. Before becoming more constructive, we would look for signs of sustainable full-price selling, driven by resonating merchandise," Maschmeyer said in a research note.
"I do think it was an excellent hire," Sidoti & Co. analyst Michael Richardson said in an email.
"I am optimistic that his 40 years of experience and background in merchandising, sourcing and design will be beneficial as Body Central works to improve their merchandising issues," he said, but he doesn't expect to see an impact from Woolf's hiring until the second half of 2013.
Stein Mart sales rise again
Stein Mart Inc. has been searching for a permanent CEO for a year and a half, but sales are doing very well under interim CEO Jay Stein.
Jacksonville's other retail fashion chain last week reported that comparable-store sales rose 4.6 percent for the four weeks ended Jan. 26.
Stein Mart also reported that total sales for the fiscal year ended Feb. 2 rose 4.6 percent to $1.21 billion and comparable store sales rose 2.7 percent.
"I am pleased with our sales performance in January as well as in fiscal 2012 and look forward to continuing this trend in 2013," Stein said in a news release.
The week before the sales report, Avondale Partners analyst Mark Montagna upgraded his rating on Stein Mart from "market perform" to "market outperform."
"Store merchandise appears on target for spring, clearance markdowns are low entering the first quarter, and the rising traffic momentum should propel into fiscal 2013," Montagna said in his report.
He also sees a big opportunity for growth in Stein Mart's home goods department.
"The improved housing outlook is the most positive macro trend for retailers," he said. "Housing emerged as a growth engine in 2012. We believe consumers participating in upgrading homes or buying a new home will place more of their discretionary purchases on home-related product than apparel or footwear."
Montagna said Stein Mart "fully re-merchandised" its home department in August 2010.
"The assortment has gone through refinements and it looks the best it has in over 10 years. Home is its biggest category opportunity," he said.
LPS increases adjusted earnings
Lender Processing Services Inc. last week reported adjusted fourth-quarter earnings of 74 cents a share, 2 cents higher than the previous year and 7 cents higher than the average forecast of analysts surveyed by Thomson Financial.
Jacksonville-based LPS, which provides technology services for mortgage lenders, incurred a number of one-time charges that reduced its final net income to 3 cents a share. The charges included 33 cents for estimated legal and regulatory contingencies.
LPS announced the previous week that it agreed to pay $127 million to settle complaints from attorneys general in 46 states and the District of Columbia alleging that an LPS subsidiary falsified documents used in foreclosure proceedings.
The company set aside $48 million in reserves in the fourth quarter to cover its legal costs after previously setting aside more than $200 million.
Probably the best news from the company's quarterly conference call Friday was that CEO Hugh Harris has recovered from cancer treatments that began last summer.
"I'm very happy to be back in the office full time," Harris said.
"The strong financial results we reported are a testimony to the strength and depth of our team," he said.
Web.com beats forecasts, again
Web.com Group Inc. last week reported fourth-quarter adjusted earnings of 45 cents a share, up from 28 cents the previous year and 3 cents higher than the average analysts' forecast, according to Thomson.
"Our fourth-quarter results were a strong end to an important year for Web.com. Our revenue growth has accelerated, we successfully integrated Network Solutions, we scaled our profitability and cash flow, and we strengthened our balance sheet," CEO David Brown said in a conference call with analysts.
Jacksonville-based Web.com, which provides website development services for businesses, reached $500 million in annualized revenue and 3 million unique customers during the fourth quarter, he said.
Brown said the company has met or exceeded earnings projections in every quarter since it acquired competitor Network Solutions in October 2011. After that deal, Web.com began promoting the company nationally, he said.
"When we bought Network Solutions, we highlighted the fact that our increased scale and resources would enable Web.com to invest in branding for the first time in our history," he said. That included a deal last year to brand the PGA Tour's secondary golf tour as the Web.com Tour.
Brown expects Web.com to grow as more small businesses seek its services.
"We continue to believe that compelling technology trends like mass adoption of the Internet and local mobile and social engagement are increasingly mission-critical for small and medium-sized businesses, and we see this as the stronger trend going forward," he said.
PSS earnings drop
In what was likely its last quarterly report as an independent company, PSS World Medical Inc. reported lower earnings for the third quarter ended Dec. 28.
The Jacksonville-based medical supply distribution company's earnings from continuing operations fell 33 percent to $10.5 million, or 20 cents a share, in the third quarter.
Earnings from discontinued operations, including a large gain on the sale of its specialty dental business, increased final net income to $38.7 million in the quarter.
Revenue in the quarter rose 10 percent to $433.9 million.
PSS last year agreed to a buyout by McKesson Corp. The company has scheduled a shareholders meeting for Feb. 19 to vote on the deal, and McKesson expects to complete the merger during the current quarter.
San Francisco-based McKesson, which operates on the same fiscal year as PSS, reported third quarter revenue rose by 1 percent to $31.2 billion and adjusted earnings per share rose by a penny to $1.41.
PSS did not issue a news release to announce earnings but reported the data in a regular quarterly filing with the Securities and Exchange Commission.
Genesee job cuts reach 53
After estimating in December that it could cut 50 jobs after acquiring RailAmerica Inc., Genesee & Wyoming Inc.'s job cuts at the former RailAmerica's operations have already reached 53, and there could be more.
Genesee said in an SEC filing last week that it cut 14 more former RailAmerica jobs Feb. 3, after eliminating 26 in January and 13 in December when it completed the merger.
Connecticut-based Genesee also said in the filing it "continues to evaluate the additional consolidation of certain administrative and back-office functions, including as a result of the contemplated closure of the RailAmerica headquarters in Jacksonville."
Genesee filed a notice in December under the Worker Adjustment and Retraining Notification Act saying it anticipated eliminating 50 jobs from RailAmerica's headquarters operations after the merger.
Regency Square Mall status uncertain
In its fourth-quarter report, General Growth Properties Inc. says the occupancy level of the Regency Square Mall is not available.
In previous reports, Regency had one of the lowest occupancies in the company's portfolio.
Chicago-based General Growth Properties operates 126 regional malls in the U.S. In the company's third-quarter report, Regency's occupancy was listed at 60.2 percent.
A footnote in the company's report says that Regency has been "transferred to the special servicer" which is trying to renegotiate the loan on the property, but it gave no other details.
Analyst downgrades Landstar
After Landstar System Inc. reported disappointing fourth-quarter earnings and said it couldn't make a 2013 forecast because of economic uncertainty, J.P. Morgan analyst Thomas Wadewitz downgraded the Jacksonville-based trucking company from "overweight" to "neutral."
"Landstar's fourth-quarter results and lack of visibility to demand and pricing in 2013 point to both a soft and volatile truckload market at the present time," Wadewitz said in his report.
"Given near term concerns about revenue growth and lacking a significant cost side story, we are challenged to identify a clear catalyst for stronger EPS performance and upside for Landstar's stock," he said.
Flowers benefits before Hostess deal
Flowers Foods Inc. doesn't know yet if its bid to buy six bread brands from Hostess Brands Inc. will be successful, but the company already is benefiting from Hostess' bankruptcy last year.
Flowers last week reported fourth-quarter earnings rose by 11 cents a share to 28 cents, 3 cents higher than the average forecast of analysts surveyed by Thomson.
The company also said sales rose 15 percent to $749.4 million, about $41 million higher than the average analysts' forecast.
The company said it benefited from bread sales to customers after Hostess shut down its operations in November.
"Our team rallied to meet the needs of new and existing customers as they felt the impact of Hostess' sudden departure. Our fourth-quarter results show the benefit to sales and earnings that resulted from our team's outstanding efforts to serve our customers," Flowers CEO George Deese said in a news release.
Thomasville, Ga.-based Flowers, which already operates one Jacksonville bread plant, agreed last month to buy 20 former Hostess bakeries, including one in Jacksonville. That agreement is subject to a bankruptcy auction process for the Hostess assets which will take place at the end of this month.
Allstate overcomes Sandy claims
Analysts expected Allstate Corp. to report a fourth-quarter loss because of enormous insurance claims from Hurricane Sandy in the fall.
However, Allstate surprised everyone with operating earnings of $289 million, or 59 cents a share, even after $1.1 billion in Sandy claims.
Allstate also announced it is raising its quarterly cash dividend by 3 cents a share to 25 cents.