The Fossil Q Venture.

Wall Street loves a bargain. After suffering steep declines in share values following multiple consecutive quarters of weak top- and bottom-line results, shares of companies in the retail, fashion, accessories and beauty segments tracked by WWD rebounded as investors gobbled up cheap stocks.

In some cases, share prices were “so low, there’s nowhere else to go but up,” as one investor told WWD at an industry event last week. For several top performers during the year to date, company financial performances that showed a clear turnaround warranted the higher valuations.

Of the stocks tracked by WWD, 51 advanced year to date, while 28 declined. Thirty-three of the gainers showed double-digit gains so far this year. The total market capitalization of the stocks that comprise the WWD Stock Tracker total $3.6 trillion. Total revenues of the group are $1.54 trillion.

The gainers were led by Fossil Group Inc., which recently reported quarterly results that surprised Wall Street by showing strength in the group’s wearables business. Sure, the company showed a loss for the quarter, but adjusted earnings blew past analysts’ consensus estimates by 24 cents a share. Following the results, which were in mid-February, the stock soared 70 percent to $15.42. Since then, it’s been trading around $15. Year to date, shares of Fossil are up more than 93 percent.

Also among the top performers is Tailored Brands Inc., which is up more than 42 percent to around $31. Chief executive officer Doug Ewert recently sat down with WWD to talk about the business and the integration of the Jos. A. Bank brand, which Ewert described as a “complicated” acquisition. Investors have keyed into the ceo’s efforts to streamline and rebuild the business — and boost shareholder value.

On the declining side, Cherokee Inc., L Brands and Iconix Brand Group were among the most depressed stocks. Shares of Cherokee are off more than 60 percent for the year-to-date period, trading around 74 cents — which is above their 52-week low of 62 cents and well below their high of $10.70.

Plaguing the stock is integration issues with the acquisition of legacy outdoor footwear brand Hi-Tec. Cherokee is reimagining the brand and taking it from an indirect sales model to a licensed one. But Henry Stupp, the ceo who has led the company for eight years, has licensing expertise (he’s a cofounder of Canadian licensing apparel company NTD Apparel) and has been down this road before. Still, Wall Street is hard to please.

Outside of the top five and worst five performers, companies that have seen their stocks soar since the beginning of the year with gains of more than 20 percent include Macy’s Inc., Amazon Inc., Dillard’s Inc., Guess Inc. and Under Armour Inc.

Macy's

Shares of Macy’s are up more than 27 percent so far this year.  Mark Lennihan/AP/REX/Shutterstock

From here, it’s unclear how the retail sector will fare and how investors will respond. There’s a lot of nervousness in the market following the liquidations and Chapter 11 filings of Nine West, The Bon-Ton Stores Inc., Claire’s and Toys ‘R’ Us, noted analysts at the Telsey Advisory Group, who said the sector is being buoyed by strong labor numbers and the ongoing benefits of tax reform.

“Whether it be retailers, brands, or real estate companies, realigning operations to adapt to changing consumer preferences is leading to the first signs of collaboration in the effort to drive traffic, sales and profits,” the analysts said in a report on Monday. “After a solid 2017 holiday season, the first quarter, even with its headwinds, appears to be somewhat of a turning point, given that all types of consumer businesses are acknowledging green shoots. And several more quarters of consistent patterns are needed to call it a trend.”

Then there’s another thing that may start to keep the c-suite up at night: how to anniversary those robust holiday sales of last year.

 

Top Five Performers, Year-to-Date
Company (Exchange: Ticker) Current Price* 52-Week High 52-Week Low Year-to-Date Price Change
1. Fossil Group Inc. (Nasdaq GS: FOSL) $15.02 $18.44 $5.50 93.31
2. Stage Stores Inc. (NYSE: SSI) $2.95 $3.18 $1.45 75.60
3. Vince Holding Corp. (NYSE: VNCE) $8.98 $14.50 $2.80 45.07
4. Tailored Brands Inc. (NYSE: TLRD) $31.04 $34.52 $9.40 42.19
5. New York & Company Inc. (NYSE: NWY) $3.99 $4.31 $1.28 39.51
Worst Five Performers, Year-to-Date
Company (Exchange: Ticker) Current Price* 52-Week High 52-Week Low Year-to-Date Price Change
1. Cherokee Inc. (Nasdaq GS: CHKE) $0.74 $10.70 $0.62 -61.05
2. L Brands Inc. (NYSE:LB) $35.26 $63.10 $34.20 -41.45
3. Iconix Brand Group Inc. (Nasdaq GS:ICON) $0.89 $8.30 $0.86 -31.00
4. Signet Jewelers Ltd. (NYSE:SIG) $40.67 $77.94 $33.11 -28.08
5. Tilly’s Inc. (NYSE: TLYS) $11.34 $16.57 $8.42 -23.17
Source: S&P Capital IQ, Yahoo!. *Current price and year-to-date figures as of the market close on Friday, April 27, 2018.

 

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