Latest news with #margins
Yahoo
4 hours ago
- Business
- Yahoo
TD Cowen Cuts Victoria's Secret Target to $22, Says Core Business Still Lags
TD Cowen lowered its price target on Victoria's Secret (NYSE:VSCO) from $25 to $22 a few days earlier, holding its Neutral stance as the lingerie retailer continues to struggle with margin pressure and weak core category performance. The stock is currently trading near $19, down more than 52% year-to-date, with a market cap of $1.58 billion. The downgrade follows a rough first quarter, where gross margins came in below expectations. While the company benefited from lower SG&A, thanks to a shift in marketing spend from Q1 into Q2, Cowen pointed to the growing reliance on 'gift with purchase' promotions, which undercut pricing and dragged on margins. Unit sales during the semiannual sale also saw double-digit declines, raising further questions about consumer demand. Still, there were a few positives. The PINK apparel line, beauty segment, and VSX activewear all delivered solid results. But analysts made it clear that the company's core intimates business, the foundation of the brand, 'needs more work.' TD Cowen also warned that the second half of the year could bring difficult comps, particularly given the major lift Victoria's Secret (NYSE:VSCO) saw from its fashion show last year. The updated $22 price target is based on a 9x multiple of projected 2027 earnings. It suggests marginal near-term upside without a turnaround in fundamentals. The company remains profitable, with $586 million in EBITDA over the past 12 months, but momentum is shaky, and the stock continues to show that uncertainty. Last month we talked about . While we acknowledge the potential of VSCO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. Sign in to access your portfolio
Globe and Mail
6 hours ago
- Business
- Globe and Mail
What's Behind Zumiez's Gross Margin Growth Amid Tariff Pressures?
Zumiez Inc. ZUMZ reported gross profit of $55.3 million in the first quarter of fiscal 2025, a 6.6% increase from $51.9 million in first-quarter fiscal 2024. Gross margin rose to 30%, up from 29.3% in the same quarter last year. This 70-basis point improvement was primarily driven by leverage on store occupancy costs as a result of increased sales volume. A significant contributor to this margin expansion was Zumiez's continued focus on full-price selling, particularly in its North America operations. This pricing discipline allowed the company to preserve stronger product margins even in a challenging retail environment. Additionally, operational improvements carried over from 2024 supported profitability gains. These included the closure of 31 underperforming stores, enhancements to staffing models and structural cost reductions in shipping and logistics functions. Cost control efforts were evident across several expense categories. Zumiez achieved meaningful cost leverage, with non-wage store operating costs improving 70 basis points, corporate costs 30 basis points, and wages, training and incentive compensation by 40 basis points. These efficiencies highlight Zumiez's disciplined approach to managing expenses while continuing to support long-term strategic investments. Another key driver of gross margin improvement was the growth of private label sales. In the fiscal first quarter, private label products represented 30% of total sales, up from 28% in fiscal 2024 and 23% in fiscal 2023. Since these products are designed, sourced and priced internally, they generally deliver higher profitability than third-party brands. The expansion of private label offerings provided a significant margin advantage and reinforced the company's ability to meet customer demand with value-driven, exclusive merchandise. ZUMZ Stock Past-Month Performance ZUMZ Mitigates Tariff Impact Zumiez has addressed the impact of tariffs on gross margin. At the start of fiscal 2025, around 50% of products were sourced from China, but the company expects to reduce this to approximately 30% by year-end. For key selling periods like back-to-school and the holiday season, the company anticipates a 50% year-over-year reduction in Chinese-sourced inventory. For the long term, Zumiez aims to ensure that no single country accounts for more than 20% of its sourcing. To counteract the cost pressure from tariffs, Zumiez took proactive steps, including bringing in $7 million worth of inventory from China ahead of anticipated tariff increases. The company also collaborated with vendors and manufacturers to rethink sourcing and production processes. In addition, pricing strategies, bundling and promotional adjustments were implemented to offset rising costs. Looking ahead, Zumiez expects modest year-over-year growth in product margin for fiscal 2025, building on the 70-basis-point improvement achieved in fiscal 2024. Management anticipates additional gross margin leverage through continued efficiencies in occupancy, distribution and logistics. Despite uncertainty in global trade dynamics and the macroeconomic environment, Zumiez remains confident in its ability to achieve sales growth, maintain cost control and return to profitability by the end of fiscal 2025. Zumiez's Valuation Picture Zumiez is currently trading at a forward 12-month price-to-sales (P/S) multiple of 0.25X, which positions it at a discount compared with the industry's average of 1.69X. The stock is also trading below its median P/S level of 0.41X observed over the past year. Also, Zumiez is priced lower than the sector's average of 1.60X. ZUMZ Looks Attractive From a Valuation Standpoint ZUMZ's Stock Performance Shares of this Zacks Rank #3 (Hold) company have gained 5.3% in the past month against the industry 's modest 4% decline. Key Picks Some better-ranked stocks are Stitch Fix SFIX, Canada Goose GOOS and Allbirds Inc. BIRD. Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. The Zacks Consensus Estimate for Stitch Fix's current fiscal-year earnings implies growth of 69.7% from the year-ago actuals. SFIX delivered a trailing four-quarter average earnings surprise of 51.4%. Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 at present. The Zacks Consensus Estimate for Canada Goose's current fiscal-year earnings and sales indicates growth of 10% and 2.9%, respectively, from the year-ago actuals. Canada Goose delivered a trailing four-quarter average earnings surprise of 57.2%. Allbirds is a lifestyle brand that uses naturally derived materials to make footwear and apparel products. It carries a Zacks Rank of 2 at present. The Zacks Consensus Estimate for BIRD's current financial-year earnings implies growth of 16.1% from the year-ago actual. The company delivered a trailing four-quarter average earnings surprise of 21.3%. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zumiez Inc. (ZUMZ): Free Stock Analysis Report Canada Goose Holdings Inc. (GOOS): Free Stock Analysis Report Stitch Fix, Inc. (SFIX): Free Stock Analysis Report Allbirds, Inc. (BIRD): Free Stock Analysis Report
Yahoo
8 hours ago
- Automotive
- Yahoo
Worksport Reports Consecutive Months of Record-Breaking Revenues, Gross Margin Improves by 25%
Company Reports All-Time-High Revenue in May 2025 (Following Record April 2025 Sales) as Gross Margins Rise 25% from Q1 2025 Levels; Growth Momentum Expected to Continue West Seneca, New York, June 23, 2025 (GLOBE NEWSWIRE) -- Worksport Ltd. (NASDAQ: WKSP) ('Worksport' or the 'Company'), a U.S. based manufacturer and innovator of hybrid and clean energy solutions for the light truck, overlanding, and global consumer goods sectors, today announced that May 2025 sales reached $1.28 million, marking the Company's second consecutive month of record-breaking revenue (non-audited). Gross Margins continue to improve notably, as Worksport's Made-in-USA cover line continues to gain significant traction. Worksport's April and May 2025 revenues alone have surpassed total Q1 2025 revenue, signaling strong momentum entering the second half of the year. Gross Margin Expansion: May gross margins improved 25% over Q1 2025 levels, bringing margins closer to 23%, driven by the Company's focus on higher-value branded products and greater operational efficiency at its New York manufacturing facility, where products use over 90% domestic content. Management projects gross margins to trend toward 30% by year-end, reflecting expected scale benefits and continued cost optimizations. Company expects cash-flow positivity to be achieved towards year-end. Distribution Network and Growth Outlook: Worksport's active dealer network has expanded from 94 in Q4 2024 to over 550 today, including two major national distributors added this spring. Management expects June 2025 to deliver another strong month as two recently onboarded national distributors ramp up ordering. Steven Rossi, CEO of Worksport Ltd., commented: 'The month of May marks another record, reinforcing that our American-made tonneau covers and strategic B2B expansion are delivering real, repeatable results. We expect June 2025 to be even stronger as our newest national distributors ramp up orders. With our SOLIS and COR clean-tech products launching this fall, we believe 2025 will prove to be another breakout year that firmly sets Worksport on a path to long-term growth with a keen focus on strong EBITA.' 2025 Revenue and Profitability Outlook Building on revenue of $1.5 million in 2023 and $8.5 million in 2024, Worksport projects reaching approximately $20 million by year-end 2025 — a scale designed to deliver cash flow positivity and support sustained profitability. Notably, the Company's current market capitalization remains below this year's projected revenue, highlighting what management views as a meaningful investment opportunity. Further upside is expected with the anticipated fall 2025 launch of the SOLIS solar tonneau cover and COR portable nano-grid power system, targeting multi-billion-dollar clean energy and portable power markets. Management believes these high-margin, IP-protected products will accelerate significant consistent growth for the years ahead. For further information:Investor Relations, Worksport Ltd. T: 1 (888) 554-8789 -128 W: W: E: investors@ Join: Worksport's Newsletter About Worksport Worksport Ltd. (Nasdaq: WKSP), through its subsidiaries, designs, develops, manufactures, and owns the intellectual property on a variety of tonneau covers, solar integrations, portable power systems, and clean heating & cooling solutions. Worksport has an active partnership with Hyundai for the SOLIS Solar cover. Additionally, Worksport's hard-folding cover, designed and manufactured in-house, is compatible with all major truck models and is gaining traction with newer truck makers including the electric vehicle (EV) sector. Worksport seeks to capitalize on the growing shift of consumer mindsets towards clean energy integrations with its proprietary solar solutions, mobile energy storage systems (ESS), and Cold-Climate Heat Pump (CCHP) technology. Terravis Energy's website is Connect with Worksport Please follow the Company's social media accounts on X (previously Twitter), Facebook, LinkedIn, YouTube, and Instagram (collectively, the 'Accounts'), the links of which are links to external third-party websites, as well as sign up for the Company's newsletters at Social Media Disclaimer The Company does not endorse, ensure the accuracy of, or accept any responsibility for any content on these third-party websites other than content published by the Company. Investors and others should note that the Company announces material financial information to our investors using our investor relations website, press releases, Securities and Exchange Commission (SEC') filings, and public conference calls and webcasts. The Company also uses social media to announce Company news and other information. The Company encourages investors, the media, and others to review the information the Company publishes on social media. The Company does not selectively disclose material non-public information on social media. If there is any significant financial information, the Company will release it broadly to the public through a press release or SEC filing prior to publishing it on social media. Forward-Looking Statements The information contained herein may contain 'forward‐looking statements.' Forward‐looking statements reflect the current view about future events. When used in this press release, the words 'anticipate,' 'believe,' 'estimate,' 'scheduled,' 'expect,' 'future,' 'intend,' 'plan,' 'project,' 'envisioned,' 'should," or the negative of these terms and similar expressions, as they relate to us or our management, identify forward‐looking statements. These statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial situation may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) supply chain delays; (ii) acceptance of our products by consumers; (iii) delays in or nonacceptance by third parties to sell our products; and (iv) competition from other producers of similar products. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the SEC, including, without limitation, our latest Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC's web site at As a result of these matters, changes in facts, assumptions not being realized or other circumstances, the Company's actual results may differ materially from the expected results discussed in the forward-looking statements contained in this press release. The forward-looking statements made in this press release are made only as of the date of this press release, and the Company undertakes no obligation to update them to reflect subsequent events or in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
Don't Sleep on Crocs: The Market's Comfiest Clog Is a Value Play
Crocs shows financial strength with expanding margins despite flat revenue, as its core brand grows internationally by 2.4%. HEYDUDE continues to struggle with a 9.8% revenue drop, creating uncertainty in Crocs' two-brand strategy. Potential tariffs on Chinese goods threaten Crocs' Asian manufacturing base, creating cost pressure that could erode its improved margins. 10 stocks we like better than Crocs › Crocs (NASDAQ: CROX) might carry the stigma of foam clogs and pop-culture punchlines, but the company's financials are nothing to laugh at. In Q1 2025, Crocs reported revenue of about $937 million, essentially flat year over year. On paper, that may not sound like much. But dig deeper, and you'll find a company expanding margins, growing profits, and navigating supply chain uncertainty with precision. The shoe stock is still down about 24% year over year, but with earnings growth and strategic resilience in hand, could Crocs be growing into a bigger size? Let's see how it measures up. Crocs doesn't sell just one brand, but two: the original Crocs and the newer HEYDUDE. We can think of the company as running a race with two different shoes. One is a proven performer; the other is still getting broken in. The stronger fit is the original Crocs brand, which has demonstrated consistent revenue growth over recent quarters. In Q1 2025, revenues increased by 2.4% year over year to $762 million, with international markets like China and Western Europe driving double-digit gains that offset softer U.S. wholesale demand. Lower product costs and a smarter customer mix for the brand helped lift adjusted gross margins for the enterprise to 57.8%, up 180 basis points from a year ago. In other words, the Crocs isn't just growing: It's getting more efficient with every sale. Operationally, then, the Crocs brand is moving with purpose. But the other shoe -- HEYDUDE -- is a bit more problematic. Acquired for $2.5 billion in 2022, HEYDUDE was meant to extend Crocs' dominance into casual footwear. Instead, it's become a source of uncertainty. Revenue fell 9.8% in Q1 to $176 million, with sales at department stores and third-party retailers falling 17.9%. At the same time, HEYDUDE saw some growth selling directly from its own website and stores (about 8.3%). That traction, however, hasn't been enough to steady the brand, nor convince investors that it's ready to carry its share of the weight. One of the biggest storylines from Q1 wasn't a number. It was the lack of one. Crocs pulled its full-year 2025 guidance, pointing to macro uncertainty and rising trade tensions. New U.S. tariffs on goods from China could drive up production costs, and with much of Crocs' manufacturing still based in Asia, the company is playing it safe. It's not ideal, but Crocs isn't the only one bracing for impact. Sketchers withdrew full-year guidance in April, Adidas refrained from raising its 2025 financial forecast despite strong first-quarter results, and Deckers warned that tariffs could cost up to $150 million in fiscal 2026. Retailers across the board are hedging toward visibility, which could make shoe stocks like Crocs more volatile for the next few quarters. The upside? Crocs has pricing power. Its products are distinct, popular, and affordable enough that customers won't likely balk at a modest price hike. That said, pricing power only matters if Crocs protects its margins, which is something investors should watch closely. Crocs has built momentum on culture as much as comfort. And, right now, the culture is still buying. TikTok trends, celebrity nods, and a shift toward more versatile casual wear have all worked in Crocs' favor. But fashion is fickle, and Crocs is playing a careful game. It ended Q1 with $166 million in cash and cut its debt by nearly $250 million. Capital spending, though, came in at just $15 million, a modest figure compared to peers. Crocs is still digesting the HEYDUDE acquisition, which limits how aggressively it can reinvest elsewhere. The brand is still trending, and the balance sheet looks stable. But in this industry, staying fashionable might demand a bit more risk than what Crocs is currently taking. True, not everyone's a fan of Crocs' aesthetic. But investors don't have to wear them to appreciate the numbers: rising earnings, solid margins, and a surprisingly low multiple. At the time of writing (May 26, 2025), Crocs trades at around 6.8 times trailing earnings, meaning investors are paying just under $7 for every $1 of earnings. That's pretty cheap by almost any standard, especially when compared against Sketchers (14.9), Deckers (20), and Adidas (38). To be sure, those companies are bigger, with broader product lines and a global scale to match. But that's exactly what makes Crocs' lower multiple so compelling. For a company that is still growing earnings, expanding margins, and riding a consumer wave, this kind of valuation suggests that investors may be overlooking its potential. The stock comes with scuff marks you shouldn't ignore: Tariffs could eat into profits, and HEYDUDE still needs to catch up. But if Crocs' fundamentals continue to hold up, today's low valuation may not last. For long-term investors who believe Crocs can stay relevant, now might be a smart time to buy in. Before you buy stock in Crocs, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Crocs wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Steven Porrello has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Deckers Outdoor. The Motley Fool recommends Crocs and Skechers U.s.a. The Motley Fool has a disclosure policy. Don't Sleep on Crocs: The Market's Comfiest Clog Is a Value Play was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Margins will be 'biggest pressure point' for earnings this year
The Federal Reserve decided to hold rates steady and forecasts two rate cuts this year. Charles Schwab senior investment strategist Kevin Gordon joins Market Domination to discuss what the next earnings cycle might look like and why margins will be a telling "pressure point" when it comes to gauging the labor market and corporate responses to tariffs and inflation. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. I do want to talk more about labor, but first, I want to ask you a little bit more about earnings because we've talked to certainly a lot of strategists who are very optimistic about where earnings are going to go from here, and they say, even if there is a tariff impact, not going to be huge, you still have the big secular tailwind of AI, etcetera. Um, what are you going to be watching most closely in these earnings reports thematically to see where there are maybe pressure points or lack thereof? I mean, the biggest pressure point is really what's happening with margins. You know, a couple years ago when we were going through the big inflation surge, a lot of the focus was on what do unit sales look like, how much of it is just price versus actual volume growing. This time, it's much more focused on on margin because you are in a more precarious part or or state with the labor market. Um, typically what companies do when you're faced with, you know, rising costs or lower revenue is you you look to get rid of your biggest cost which is labor. So any signs from a thematic standpoint that there is a bias towards cutting labor to save on that versus anything else, um, I think that's going to be an important thing to watch. And unfortunately, you know, even to date with with everything tariff related, there's not one consistent theme across the market. There's not even one consistent theme as to how companies are responding within sectors, even within consumer discretionary or consumer staples. You're seeing massive dispersion and how companies have responded to this, and how they were already positioned heading into this too.
