An Intriguing Transaction: GoPro Wants to Sell Some Debt.

GoPro’s press release of yesterday had the following title: “GoPro to Offer $150 Million of Convertible Senior Notes due 2022.”  Well, okay, they’ve run through a lot of cash lately.  That they might want to raise some makes sense.  We don’t yet know anything about the terms.  “The interest rate, conversion rate, offering price and other terms are to be determined upon pricing of the notes,” the press release says.

Here’s the link to the press release.  I’m hoping one of you who has more experience with this kind of deal might call me or post a comment on my web site explaining it.

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It’s Not All About the Omnichannel? Could That Be Okay? The Buckle’s Annual Report

The way The Buckle 10K and conference call come across, you can’t quite decide, at first read, if they’ve made a specific decision to focus on brick and mortar or if they are just way, way behind in online.  I think it’s the former given how they describe their business and how they compete.

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The U.S. is Tough on Another Company: Globe’s Half Yearly Results

Globe published its results for the six months ended December 31st on February 21st and I missed it.  Better late than never I guess.

Happily for Globe, its largest market in Australasia was strong because revenues in Europe and North American (NA) were down pretty dramatically.  Total revenues fell 10.6% from $79.1 in the six months last year to $70.7 million Australian dollars in this year’s six months. (all dollar numbers are Australian).  Australasia revenue, representing 58.4% of total revenue, rose 15.5% from $35.7 to $41.3 million.

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Zumiez’s Annual Report and Some Questions I’d Ask if I were an Analyst.

I’m always grateful when a company has a short 10K and conference call.  I’m efficient at spotting the meat in a 10K, but it’s easier when it’s 77 pages, as Zumiez’s was, instead of 177 pages.  Though when it’s 177 pages, there’s usually some really interesting stuff.

Zumiez doesn’t need more than 77 pages.  They pursue the general strategy they’ve pursued since the company was founded, they make money, and their balance sheet is fine.  They are dealing with the same crappy retail and economic environment everybody else is, they are impacted by it, and they are cautious about the future.  Ho hum.

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How Was VF’s Year?

It’s accurate to say that VF ran into the same issues and economic dislocations as other brands and retailers.  During their fourth quarter, ended December 31, 2016, revenues fell 2.7% from $3.41 billion to $3.32 billion in the quarter ended December 31, 2015 (the prior calendar period- PCP).  Net income was also down from $312 to $264 million, or by 16.7%.

For the year, revenue was almost the same at just over $12 billion.  Net income fell 12.8% from $1.32 in 2016 to $1.07 billion in 2015 (also the PCP).  More details and nuance later.  I wanted you to have those numbers as we talk strategy.

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Billabong’s Six Month Report: The More Things Change, the More They Stay the Same

Six months ago, reporting on Billabong’s results for the whole year, I said this was a challenging turnaround, Billabong was doing things right, they were starting to see results, but the market was tough, and implementing their plan was taking longer and costing more (perhaps because it’s taking longer) than they’d initially expected.

That’s all still true for the six months ended December 31, 2016.

I’ll start with the numbers as reported (numbers in Australian dollars).

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GoPro’s Year and Quarter: Doing the Right Things, But……..

Let’s just jump right to a comment CEO Nick Woodman made during the conference call.

“I would say that we are more focused on revenue and margin and less focused on volume on a unit basis.”

That sounds to me like GoPro is more interested in the higher end of the market.  And they should be. But if that’s their focus (I happen to think it should be, but dare I call it a niche?) is there enough revenue growth to satisfy the requirements of being a public company?

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Trade Shows: Can’t Live with Them, Can’t Live Without Them

Life was simpler when I wrote my first article on trade shows in the mid-90s.  We went to trade shows because it was the only place to see, and to make, complete product presentations, and discover new, meaningful, features and products.  There were also a lot more specialty retailers.  The shows were the only place they and brands could efficiently connect and do business- by which I mean write orders.

All that’s changed.  It’s not that it doesn’t still go on, but it doesn’t have to happen at trade shows like it used to.  There are other choices caused by consolidation, the internet, and changing consumer behavior.

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Deckers’ Quarter: More Sanuk Travails and the Public Company Conundrum.

I’ve reviewed Deckers’ 10Q for the three months ended December 31, 2016 and their conference call.  The company earned $41 million on sales of $760 million in the quarter, which isn’t bad.  But that’s down from net income of $157 million on revenues of $796 million in the same quarter last year.

The problem?  I’m sure regular readers already know.  Yup, it’s mostly Sanuk again.  But’s let start at the company’s top line.

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What Will Retail Be Like in Five Years and How Will You Prosper?

That was the question asked at a meeting last week at the Agenda trade show.  The meeting was attended by various invited brands and retailers and by me.

This meeting has been going for maybe four shows now and has generally been thoughtful and productive.  That’s a welcome improvement from the larger group meetings that used to be held at ASR.  They tended to be a bit acrimonious and have limited value.  Except that I got a free breakfast.

I had to leave before the meeting ended for a dinner engagement and didn’t get a chance to put in my two cents worth.  But the topic keeps churning my brain.  Typically, that means I should write about it.

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