J. Crew hits all-time low as analyst cuts outlook: J. Crew Group shares hit new low as analyst predicts weakening results, higher markdowns
By CNN Money
November 10, 2008
The company has "solid" product execution but there have been more promotions during the quarter than planned, Meyer said. "Although we think product is appealing, we believe J.Crew's heightened exposure to basic 'classic' items and to the New York-metro area will weigh on sales," Meyer wrote. "Promotional levels have been high in the third quarter, which we see as incremental to current guidance."
She lowered her third quarter earnings estimate to 24 cents from 28 cents per share, her fourth-quarter estimate to 29 cents from 34 cents per share and her 2009 estimate to $1.44 from $1.62 per share. Meyer also lowered her price target by $3 to $17. Shares fell 66 cents, or 4.1 percent, to $15.35 during midday trading. They earlier reached a new all-time low of $14.86.
I am disappointed but not surprised by the news. J.Crew has definitely increased their promotions lately. Unfortunately, some of the promotions were not the most attractive offers- like the one for free shipping on orders of $195+. Although, right now there are no codes for free shipping being offered and I would be happy to see one! ;)
What are your thoughts on the article? Are you surprised/ not surprised by the outcome? What do you think J.Crew should do next?
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