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Mark Holder

ICR Conference '17 Updates

The market has fretted over the ICR investment conference in Orlando focused on the retail sector that starts today. The public companies start presentations tomorrow with a lot of companies providing corporate updates prior to presentations. Some of the biggest updates are as follows:

Lululemon Athletica (LULU) - updated guidance for the holiday period. The company increased the lower end of guidance to $775 million placing the mid-point target at $780 million. The consensus analyst estimate is at $782 million. The stock is only flat as the stock valuation got stretched based on the FQ3 earnings report. More research: Lululemon: Too Much Holiday Cheer

Francesca's Holdings (FRAN) and Five Below (FIVE) - both guided to solid revenues with weakness in margins. Francesca's is up nearly 9% as the market feared the mall-based retailer wouldn't come close to estimates. Five Below is trading down 2% even after reporting an 18% increase in sales. The company cut EPS guidance by a few pennies which isn't bad in this retail environment, but the stock trades at a P/E multiple of 28. 

Zoe's Kitchen (ZOES) - possibly the biggest hit is Zoe's down nearly 9% despite no warning when the company announced the CEO attending the conference only 5 days ago. Other fast-casual restaurant stocks like Bojangles (BOJA) and Noodles (NDLS) are down 4% on fears of bad news. My investment thesis remains highly supportive of Zoe's at levels around $23 with the stock down nearly 50% from the 2016 highs despite only slightly tweaking down Q4 guidance. Look for a dip buying opportunity. More research: Zoe's Kitchen: Not Much Of A Surprise

Stay tuned to this blog for more updates on the conference as the presentations for the public companies begin tomorrow. 

Disclosure: Long ZOES

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