Thursday, May 08, 2008

Boom Goes The Seal and More

Today, all of the retailers reported their same store sales figures. For the most part, retailers came in with numbers that were ahead of expectations.

My number one position, Wet Seal (WTSLA), did not disappoint. The company's Wet Seal division came in with SSS at +3.1%, and its flailing Arden B SSS came in at -17%, which resulted in a -1.9% overall comp. This was well ahead of the expected -5.8% SSS comp. The company's total net sales for the month rose 7% (Wet Seal division sales +15% and Arden B sales -18%).

The news gets better... the company increased its fiscal Q1 EPS estimate to 0.07-0.08 from 0.04-0.06 due to efficiency improvement/cost cutting. This is a solid boost... a whopping increase of 17 to 100% (using the midpoints, we get a 36% increase). And, it seems that their CEO continues to clean house, as the company reported the resignation of their Chief Merchandising Officer from the Wet Seal Division.

Anyone who saw the trading today knows that today was a very good day for me. The stock closed up 0.25 (+6.9%) at 3.85 on heavy volume (3.4MM shares vs. 1.4MM shares average). It is now within striking distance of my first sell point. When it does get there, I do not believe I will be selling more than 25% of the overall position.

In other news, Manitowoc (MTW) has jumped back into the 40's again. Recall that they recently announced their intention to acquire Enodis (London: ENO). Anyway, Illinois Tool Works (ITW) announced today that they bid more for Enodis, and that their bid was going to be accepted. I guess we'll see how this plays out. Seems like the market is glad to have ITW relieve MTW of its ENO obligation.

That's it for now. Let's hope that tomorrow brings us more of this good stuff... gotta love it!

No comments: