Fyi….Position update…..In
addition to periodic global-macro posts to this blog, we occasionally
share position updates that are routinely shared with our investors.
These comments are absolutely not meant to be investment advice and
readers are reminded that all comments posted here are for information
and entertainment purposes only!
Any commentary, especially those that include specific mentions of
'buying' or 'selling' or 'positions', is made solely for those limited
informational and entertainment purposes, and NOT as advice.
While we will be sharing some detail on changes made to our portfolios,
it's important to consider that our portfolio decisions are taken in a
much broader context of our overall portfolio strategies and our
assessment of each of our investor's unique financial profiles. As
such, what we do, and when we do it, is specific to our investor
portfolios and is NOT intended, in any way, as advice for use by others.
With that in mind, we hope you find our comments of interest, and we'd be delighted to hear feedback!
With that in mind, we hope you find our comments of interest, and we'd be delighted to hear feedback!
The weather is largely to blame, but not totally, for AEO’s
underwhelming earnings report and gloomy forward guidance. A move by
trendy teens towards cheaper chain stores (eg: H&M, Zara) also took a
bite out of earnings. This left AEO with higher than expected inventory
levels, tighter margins and higher promotional costs. A bad combo!
That said, the price of the stock, which had already been
lagging especially since the departure of the CEO in January and anticipating a
bad ‘weather’ related earnings report, is down today over 7%. The
optimists, among which I count myself, think that the company will pare down
their inventories, control costs and continue to gain from expansion efforts
especially in overseas markets.
Perhaps hardened by the tough NorthEast winter, at this
point I’m still ready to weather the AEO storm. I added to our position
on the selloff.
The upcoming warmer seasons should be telling.
Will keep you posted.
Ed
Please continue to visit Soos Global Market Musings for updates.
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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
Disclaimer: Please read and consider important information related to all communication made by Soos Global on this site by clicking here.
Additional Disclaimer: currently long many stocks/ETFs incl. AEO. Positions may change at any time without notice.
(Sign up to "Follow by Email"! And share with others!)
(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
Disclaimer: Please read and consider important information related to all communication made by Soos Global on this site by clicking here.
Additional Disclaimer: currently long many stocks/ETFs incl. AEO. Positions may change at any time without notice.
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