In today’s briefing:
- Belle Fashion IPO: The Investment Case
- GHCL Textile: The Undervalued & Turnaround Play
- Shakey’s Pizza FY23 Concall Highlights: Challenging Q1 FY24, Smoother Road Ahead in H2
- Nitori: One of the Best Bets in Japan Consumer Markets
- Columbia Sportswear Company: Enhancing DTC Experience & Strengthening Its Retail Presence Across The Globe! – Major Drivers
- Constellation Brands: What Is Its Portfolio Transformation Strategy in Wine and Spirits? – Major Drivers
- CarMax Inc: How Are They Embracing Generative AI For Improving Efficiency & Strategic Expansion? – Major Drivers
- Conagra Brands: Investments in the Frozen Segment & 5 Pivotal Factors Driving Growth! – Financial Forecasts
- Colgate-Palmolive: What Is Its New Approach To Market Expansion & Its New Pricing Strategy? – Major Drivers
- LE: Snapping the Catalog: Features, Focus Lead the Way; Reiterate Buy, $14 PT
Belle Fashion IPO: The Investment Case
- Belle Fashion Group (2007708D HK), the largest fashion footwear company in China, is seeking to raise up to US$1 billion in a HKEx IPO.
- Belle Fashion originated from Belle International Holdings (2129452D HK), which was privatised in 2017. In October 2019, Belle International spun off its sportswear business as Topsports International Holdings (6110 HK).
- The investment case rests on a market-leading position, return to growth, margin improvement, cash generation and modest leverage.
GHCL Textile: The Undervalued & Turnaround Play
- Company recently demerged from Ghcl Ltd (GHCL IN) and guiding for 30% revenue growth and double margins from here onwards with cotton prices being stable.
- A Debt Free Textile company available at 0.56x Price to Book with growth plan in progress and adding Value added products in its portfolio.
- Due to Forced selling from DII, FII company remained undervalued, now with changing margin profile, the Company will be available at a cheap valuation compared to peers.
Shakey’s Pizza FY23 Concall Highlights: Challenging Q1 FY24, Smoother Road Ahead in H2
- Shakey’s Pizza (PIZZA PM) had a disappointing end to FY23 despite the 32% YoY systemwide sales and 23% YoY profit growth. 4Q FY23 sales/profits were +15% YoY/-21% YoY.
- Network expansion was a solid 369 outlets (base of 1772 outlets), primarily led by Potato Corner (359 outlets). Expansion in FY24 was guided at over 400+ outlets (1+ bn Pesos).
- Stock trades at 15.6x FY23 earnings and 13x FY24e with mid-teens growth on the top/bottom line guided by the company for FY24
Nitori: One of the Best Bets in Japan Consumer Markets
- Leading furniture retailer Nitori recently announced it would work with French platform developer Mirakl to build an online marketplace. The site will be available late 2024 or early 2025.
- Nitori wants the mall to contribute 20% of revenues by 2032 within a sales target of ¥3 trillion, when overseas store numbers are expected to be double those in Japan.
- But, founder Akio Nitori says he wants to see overseas sales much higher than official targets and may well get there through close targeting of the rising Asian middle class.
Columbia Sportswear Company: Enhancing DTC Experience & Strengthening Its Retail Presence Across The Globe! – Major Drivers
- In the recent fourth quarter 2023 financial results, Columbia Sportswear highlighted some key achievements and challenges they faced throughout the year.
- This provides an informative insight into both the company’s strengths and weaknesses moving forward, forming a neutral foundation for an investment thesis and resulting summary analysis.
- A cornerstone of Columbia Sportwear’s strategy in 2023 was their inventory reduction plan.
Constellation Brands: What Is Its Portfolio Transformation Strategy in Wine and Spirits? – Major Drivers
- Constellation Brands reported strong Q3 results, driven by robust performance in their beer business, achieving over 8% depletion growth for its beer portfolio.
- This performance is a testament to continued strong consumer demand and contributed to the company’s 55th consecutive quarter of depletion growth and tenth leading share gains.
- The company also executed $215 million of share repurchases in Q3, maintaining its net leverage ratio at 3.2x, excluding Canopy equity and earnings.
CarMax Inc: How Are They Embracing Generative AI For Improving Efficiency & Strategic Expansion? – Major Drivers
- CarMax, a leading used car retailer in the United States, reported its Q3 fiscal year 2024 results indicating a continuation of a strategic plan that has led to sequential year-over-year improvements across key business areas for four consecutive quarters.
- Total sales for Q3 FY ’24 were $6.1 billion, down by 5% compared to the previous year due to lower retail and wholesale prices and lower retail volume, partially offset by higher wholesale volume.
- Retail unit sales declined by 2.9% while used unit comps were down by 4.1%.
Conagra Brands: Investments in the Frozen Segment & 5 Pivotal Factors Driving Growth! – Financial Forecasts
- Conagra Brands maintained an overall positive tone regarding its performance and future prospects in its latest earnings.
- While there were signs of optimism and forward-looking strategies, there were also concerns about certain aspects of its operations and broader market conditions.
- The company was seen focusing heavily on volume as being crucial for growth.
Colgate-Palmolive: What Is Its New Approach To Market Expansion & Its New Pricing Strategy? – Major Drivers
- The fourth-quarter earnings of Colgate-Palmolive were decent and the company demonstrated impressive resilience in 2023, focusing on sustainable organic sales growth, rebuilding margins and strengthening cash flow performance amid an increasingly challenging operating environment.
- However, some challenges persist, such as geopolitical unrest, foreign exchange headwinds and industry shifts, which might impact results in 2024.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
LE: Snapping the Catalog: Features, Focus Lead the Way; Reiterate Buy, $14 PT
- We are reiterating our Buy rating, $14 price target and projections after reviewing the company’s early summer catalogs for April 2023 and 2024.
- We remain impressed by the shifts in the catalogs, from a deeper focus on features and story telling, impressive gains in swimwear and related accessories, expansion of categories such as outerwear, totes and lifestyle apparel, shifts in footwear that we believe will presage the relaunch of the category as a licensed item and overall similar pricing.
- We continue to believe Lands’ End is on the right track to drive higher returns and strong consistent profitability, and reiterate our Buy rating and $14 price target.,
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