Industry Profile:Industry Profile:Specialty RetailSpecialty Retail
Travis NewtonTravis Newton
Truett ShawTruett Shaw
Who? What? Why?Who? What? Why?
• Specialty Retail is a part of the retail sector that is primarily concerned with ‘niche’ segments, mainly Generation Y (7-24 y/o)
• Gen Y makes up roughly 25% of the total U.S. Population. (72.9 million)
• Gen Y-ers are categorized as trend-savvy, sophisticated, fickle, and particular-we know what we want.
• What the young kids are wearing these days…at least according to the analysts…super short mini skirts, sheer tops, vintage surf, terry cloth, velour, 80’s glam and punk,etc…
A Generation Born to SpendA Generation Born to Spend
• In 1995 teens spent an average of $66/week.
• In 2002 the number went up to $87/week
• In 2002 teen spending reached nearly $170 billion
This SeasonThis Season
• Specialty retail is cyclical so it is very important to know what is going on NOW with the industry.
• The buzz has begun to build about the Holiday season , and so far things are looking up. Holiday sales are supposed to grow 5.7% this year to $217 billion!
• The Good: • Cold weather requires a new
wardrobe
• Stores are staying on top of trends
• Increased consumer optimism and pent up demand
• The Bad:• Spending concerns, job security,
energy costs are high, have the child tax credits been spent already?
IntroductionIntroduction
• Shopping Malls
• Casual Apparel
• Teenagers/ Young Adults
• Gap, Limited
• Seasonal
• Timing
Abercrombie & Fitch CoAbercrombie & Fitch Co
• Symbol: ANF
• Price: 27.96
• Range: 17.55-33.65
• 602 Stores– Abercrombie & Fitch– abercrombie– Hollister Co.
Pacific Sunwear of California IncPacific Sunwear of California Inc
• Symbol: PSUN
• Price: 23.30
• Range: 10.00-24.22
• 799 Stores– Pacific Sunwear (619)– PacSun Outlet (73)– d.e.m.o. (107)
Hot Topic, IncHot Topic, Inc
• Symbol: HOTT
• Price: 28.61
• Range: 12.79-29.31
• 505 Stores– Hot Topic (463)– Torrid (42)
Market CapitalizationMarket Capitalization
Stock Price X Total Number of Shares Outstanding
ANF: 2.86B
PSUN: 1.78B
HOTT: 1.33B
Average VolumeAverage Volume
• Mean number of shares traded daily
• ANF: 1.92M
• PSUN: 1.82M
• HOTT: 0.91M
P/E RatioP/E Ratio
• Price per share / Earnings per share– Higher = strong growth prospects– Lower = risky firm
How much investors will pay for profit
ANF: 14.71
PSUN: 28.95
HOTT: 36.91
Earnings Per Share (EPS)Earnings Per Share (EPS)
• Net Income / Total Number of Shares Outstanding
• High correlation with cash flow and stock price
• ANF: 2.013
• PSUN: 0.793
• HOTT: 0.760
Price To Sales RatioPrice To Sales Ratio
• Stock Price / (Total Sales / Number of Shares)
• Amount each dollar of sales is worth to investors
• ANF: 1.69
• PSUN: 1.96
• HOTT: 2.85
EV / EBITDAEV / EBITDA
• Enterprise Value / Earnings Before Interest, Taxes, Depreciation, and Amortization
• Economic Value Of A Company / Operational Cash Flow
• ANF: 6.45• PSUN: 13.25• HOTT: 16.70
ConclusionConclusion
• Happy Halloween
• Go Gators!
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