Tuesday Morning: TUES Trades at 1/3 rd of BV 83 million MC and 41M in total debt with revenue just shy of a billion. Liquidity is fine with 82.9M in undrawn credit. The market is ignoring the fact that TUES operates in off-price space – and they have a growing presence in this niche. Expenses are high due to turnaround efforts and supply chain issues. CEO and the CFO are buying like crazy, booted out of the index and looks like forced selling by institutions (blue arrows on chart above). Tuesday is zigging while the rest of retail is zagging – they are closing stores in C and D malls and moving to better A and B malls with better co-tenant mix and demographic mix. Spending 43M on capex each year, the market is saying TUES is a flop and is basically priced to flirt with bankruptcy in the near future. But analyst’s estimate 2019 EBITDA to be 32M. I think the mkt has written TUES off too far and too early, with elevated expenses and top line growth, combined with the fact that treasure hunt/off price model is in style in retail.
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Tuesday Morning: TUES
Trades at 1/3rd of BV 83 million MC and 41M in total debt with revenue just shy of a billion. Liquidity is fine with 82.9M in undrawn credit. The market is ignoring the fact that TUES operates in off-price space – and they have a growing
presence in this niche. Expenses are high due to turnaround efforts and supply chain issues. CEO and the CFO are buying like crazy, booted out of the index and looks like forced selling by
institutions (blue arrows on chart above). Tuesday is zigging while the rest of retail is zagging – they are closing stores in C and D malls and
moving to better A and B malls with better co-tenant mix and demographic mix. Spending 43M on capex each year, the market is saying TUES is a flop and is basically priced to flirt with bankruptcy in the near future. But analyst’s estimate 2019 EBITDA to be 32M. I think the mkt has written TUES off too far and too early, with elevated expenses and top line growth, combined with the fact that treasure hunt/off price model is in style in retail.
The pitch is the ROI of the RE upgrade has been 50%, meaning the sales and margin uplift from the move to better quality RE will have a payback period of 2 years. The net investment typically runs at $400k.
Had been posting mid-single digit SSS comp increases till last quarter which they dropped a bombshell number – comps down 2.7% and the street showed no mercy. Stock back below $2 where it traded last in 08 and has taken a round trip after trading in the low 20’s just a couple years back.
https://www.sec.gov/Archives/edgar/data/878726/000110465917037366/a17- 14642_1ex99d1.htm\
Tuesday had been posting mid-single digit SSS comp increases till last quarter which they dropped a bombshell number – comps down 2.7% and the street showed no mercy. Stock back below $2 where it traded last in 08 and has taken a round trip after trading in the low 20’s just a couple years back.
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