CHICAGO, Aug. 19, 2011 /PRNewswire/ -- Zacks.com announces
the list of stocks featured in the Analyst Blog. Every day the
Zacks Equity Research analysts discuss the latest news and events
impacting stocks and the financial markets. Stocks recently
featured in the blog include: Jamba Inc. (Nasdaq: JMBA),
Limited Brands, Inc. (NYSE: LTD) Gap Inc. (NYSE: GPS)
Hanesbrands Inc. (NYSE: HBI) and JA Solar Holdings Co.
Ltd (Nasdaq: JASO).
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Here are highlights from Thursday's Analyst Blog:
Jamba Beats, Maintains
Outlook
Jamba Inc. (Nasdaq: JMBA) reported second quarter 2011
earnings of 5 cents per share,
surpassing the Zacks Consensus Estimate of 3
cents as well as the prior-year earnings of 2 cents. Jamba benefited from the efficiencies in
its cost structure, which offset the decline in revenue.
The top line of the company continues to struggle, with
consolidated revenues falling 20.5% year over year to $58.9 million. The revenues declined primarily
due to the shift from company-owned store sales to royalties and
franchise fees as a result of the refranchising initiative,
partially compensated by system-wide comparable restaurant sales
growth of 2.9%. Fruit & Veggie Smoothie, coconut Water
Refreshers, hot breakfast wraps, and frozen yogurt helped drive the
attachment rate higher in the second quarter of 2011 as well as
comparable-store sales.
Outlook
Based in Emeryville,
California, the company continues to expect comparable store
sales in the range of 2–4% for fiscal 2011 and adjusted operating
margin in the range of 18−20%.
Our Take
We remain impressed with Jamba's slow-but-steady turnaround.
Apart from the domestic market, Jamba is in an expansion spree in
the overseas market. Countries Jamba is currently binging on are
Korea, Philippines and
Canada. Among them, Jamba brand
has been well received by Korean customers, encouraging Jamba's
Korean partner to accelerate store opening. Jamba anticipates
retail distribution to grow from 25,000 to more than 30,000 by this
year end.
Along with expansion, the company is also on track to innovate a
new beverage line and a value-based menu offer. Jamba witnessed
increases in all 4 day-parts for the first time in the last four
years, including the dinner day-part, which was aided by the
frozen-yogurt platform. The company's cost containment effort also
augured well for its earnings.
Limited Brands Tops, Guides Higher
Limited Brands, Inc. (NYSE: LTD), a specialty retailer of
women's intimate and other apparel, beauty and personal care
products, recently posted second-quarter 2011 results. The
quarterly earnings of 48 cents a
share beat the Zacks Consensus Estimate of 46 cents, and rose 33% from 36 cents earned in the prior-year quarter riding
on an improving sales environment.
The quarterly earnings also came ahead of the company's guidance
range of 38 cents to 43 cents a share
provided earlier. The better-than-expected results, prompted
management to raise its August comparable-store sales and fiscal
2011 earnings outlook.
Let's Dig Deep
Limited Brands, which competes with Gap Inc. (NYSE: GPS)
and Hanesbrands Inc. (NYSE: HBI), posted net sales of
$2,458.1 million that climbed 10%
from the prior-year quarter, and also came ahead of the Zacks
Consensus Estimate of $2,437
million.
Comparable-store sales for the quarter jumped 9% compared with
7% registered in the year-earlier quarter. Comps rose 6% in May,
12% in June and 6% in July. The consumers, who cut back their
discretionary spending during the recession, are now gradually
loosening their wallets.
Sales at Victoria's Secret
Stores & Victoria's Secret Beauty increased 11% to $1,064 million, whereas comps were also up
by 12%. Victoria's Secret Direct
sales inched up 1% to $393 million.
La Senza comps rose marginally by 1% during the quarter.
Total Victoria Secret sales grew 8% to $1,570.7 million, driven by an 11% rise in comps.
Bath & Body Works & The White Barn Candle Co.'s total sales
were up 5% to $563 million with a 4% increase in comps.
Despite a 6% increase in cost of goods sold, buying and
occupancy, gross profit for the quarter surged 16% to $902.1 million, powered by an increase in the
top-line, whereas gross margin expanded 200 basis points to 36.7%.
Operating income soared 30% to $307
million, whereas operating margin expanded 190 basis points
to 12.5%.
Guidance
Management now expects the third quarter earnings in the range
of 17 cents to 22 cents and fiscal
2011 earnings between $2.35 and $2.50
per share. Earlier, Limited Brands projected fiscal 2011 earnings
between $2.25 and $2.45 per
share.
Limited Brands now expects comparable-store sales for the third
quarter to be up in the low to mid-single digit range and for
fiscal 2011 to rise in the mid-single digit range. The company now
forecasts August comparable-store sales to jump in the
high-single-digit range compared with a low-single-digit range
projected earlier.
Our View
Limited Brands' sustained focus on cost containment, inventory
management, and merchandise initiatives has kept it afloat in a
sluggish retail environment, as evident from its second-quarter
2011 results. The company's Bath & Body Works segment is
gaining traction, driven by a rise in store transactions,
enhancement in the direct channel business and growth from new
stores.
Victoria's Secret Stores has
been performing well, and the company is also in a constant process
of revamping its La Senza brand. Limited Brands is keen to enhance
its retail footprint across the globe by expanding aggressively in
Canada, and other international
markets. However, stiff competition and erratic consumer behavior
remain stumbling blocks.
Currently, we have a long-term Neutral rating on Limited Brands,
which operates 2,951 stores. The stock holds a Zacks #2 Rank, which
translates into a short-term Buy recommendation.
JA Solar Bleeds, Trims Guidance
JA Solar Holdings Co. Ltd (Nasdaq: JASO) announced loss
per American Depositary Share (EPADS) of 22
cents in its second quarter of 2011, which came way below
the Zacks Consensus Estimate of a 3-cent loss. In the year-ago quarter the company
clocked earnings per ADS of 19
cents.
Quarterly Performance
JA Solar's revenues in the reported quarter were $413 million, ahead of the Zacks Consensus
Estimate of $408 million and year-ago
quarterly revenue of $368.3 million.
Revenues were, however, lower compared to $563.7 million in the first quarter of 2011.
In the reported quarter JA Solar's total shipments were 401MW,
compared with shipments of 451MW in the first quarter of 2011,
representing a sequential decrease of 11.1%. However,
year-over-year shipments grew 28.9% from 311MW.
JA Solar's gross loss in the second quarter of 2011 was
$11.1 million, compared with a gross
profit of $97.5 million in the first
quarter of 2011 and gross profit of $85.3
million in the second quarter of 2010.
Total operating expenses in the second quarter of 2011 were
$20.1 million, compared with
$13.1 million in the first quarter of
2011 and $29.1 million in the second
quarter of 2010. Total operating expenses represented 4.9% of net
revenue in the second quarter of 2011, compared with 2.3% in the
first quarter of 2011 and 7.9% in the second quarter of 2010.
Operating loss in the second quarter of 2011 was $31.3 million, compared with operating income of
$84.4 million in the first quarter of
2011 and operating income of $56.2
million in the second quarter of 2010. Overall the company
incurred a net loss of $35.4 million
versus net income of $28.9 million in
the year-ago period.
Outlook
Looking forward, JA Solar expects third quarterly module
shipments in the range of approximately 450 MW–470 MW. However,
faced with subsidy cutbacks in key markets like Germany and Italy, the company trimmed its fiscal 2011
shipment outlook to 1.8 GW from the earlier forecast of 2.2 GW.
Thus we currently have a long-term Underperform recommendation
on JA Solar. In the near-term, apprehensions over the tepid module
demand in Europe, rising
competition, wafer dependency, financial stability of its customers
and oversupply of solar cells in the market will restrain the
valuation of the company.
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