ASOS, Luxoticca and Provogue, stars at a riseThursday, 27 January 2011
ASOS, Luxoticca and Provogue threw sunlight through market
clouds for fashion industry as the FashionUnited Top 100 Index hiked yesterday to 1,208.77, gaining 8.74 points and rising expectatives within the sector.
For second consecutive time in just a week, ASOS owned the session. The British e-tailer announced Wednesday the launch of its fully transactional site in Facebook which, coupled with earlier released quarterly figures rocketed its shares. Broker finnCap said that ASOS remains one of its favourite retail growth stories but one of its least-favourite shares, as the online fashion group is an exciting, but expensive, stock. While the broker’s initial reaction to the strong performance in the period was that it created further forecast upgrade potential, “it has subsequently emerged that extension of the free delivery and returns offer into the fourth quarter will offset this. Allowing also for additional costs of handling the disruption caused by the snow in December, we have trimmed our forecasts,” Stoddart said.
While finnCap’s target price for the stock has been raised from 980p to 1,225p, the broker has cut its 2011 pre-tax profit forecast by around 5%. A ‘sell’ rating is retained while ASOS closed yesterday 2.49pc above than the previous session and secured the second winner position within the international fashion benchmark index.
In the meanwhile, Luxoticca's net sales for the year reached Euro 5.8 billion (+13.8%), the highest ever achieved in the history of the group. Confirmed Tuesday their forecast for 2010 net income in excess of Euro 400 million. The Milan-based firm's overall net sales for the fourth quarter were Euro 1,346.5 million, up 16.4% over the same period of the previous year (+6.5% at constant exchange rates). It closed up by 0.18% yesterday as listed in the FU Top 100.
Eyewear and Apparel group explained this growth thanks to the strong increase enjoyed throughout all quarters of the year, which finally led them to reach the unprecedented figure of almost Euro 5.8 billion –– never before seen in the history of Luxottica: Euro 5,798.0 million (+13.8% at current exchange rates, and 7.1% at constant exchange rates), compared with Euro 5,094.3 million posted for fiscal year 2009.
The week also looks brighter for Coach, whose shares saw unusually high trading volume on Tuesday. Approximately 3,713,778 shares changed hands during mid-day trading, an increase of 1.89% from the previous session. The stock last traded at $52.46 and was trading upper on Wednesday. Analysts at UBS AG raised their price target on shares of Coach from $53.00 to $57.00 in a research note to investors last Wednesday, January 12nd. They now have a “neutral” rating on the stock.
Finally, premium retailer Provogue's foray into construction and running shopping malls came to fruition as it opened its first mall in October 2010. Provogue has a firmly-established brand recall in apparel for men and women. Low debt-equity and better margins through backward integration are other positives. Provogue is turning its focus on developing two other malls in less-penetrated cities. The construction business, carried out through a joint venture, is supported by investments by private equity players.Analysts suggest investors with a two-three year perspective to give Provogue India a try, taking advantage of its recent price fall. Taking into account the closed markets due to national bank holiday in India, Provogue was dropping 0.81% at the time this edition was closing.
However, a shock contraction in Britain's economy sent the national benchmark index tumbling further into negative territory Wednesday. The FTSE 100 bounced back over the 5,900-point mark, but the make-up of the leader board pointed to continued uncertainty about its ability to maintain momentum.