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Wednesday, August 10, 2005

Positioning for fashion: BEBE

Positioning for fashion

10 Aug 2005
Bebe stores (BEBE) has been repositioning itself at a slightly higher price point while launching its BEBE SPORTS-branded stores. Its sales have started taking off, but other retailers are starting to miss earnings as the late, hot summer takes an early toll on the fall lines. Recently, the retailer appeared on the Reuters Select Strong Operating Margins screen. Investors might want to take a look at these fashions.

The company is not without risk, though. It wouldn't really surprise me if bebe were to miss its estimate for the fourth quarter of 2005.

My view on this, though, is that the company is making some good long-term changes, including an improved tracking system for its catalog customers, so it can start gearing mailings to individual shopping habits, and its price positioning. Retailers miss quarters, but if it's not a company-specific issue, it's not necessarily a big deal.

My analysis suggests a potential earnings growth rate of 21.3% for bebe stores, with the share price reflecting only about a 14.4% growth rate.
BEBE has bounced today to $27.17 (+2.34%), having support at $26.

Read further: Positioning for fashion


Anonymous PENNY STOCKS said...

Interesting post on BEBE.

12/03/2012 02:29:00 PM  

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