“We view Mr. Lore’s departure as an incremental negative in that it removes a visionary and entrepreneurial executive from the company,” Quo Vadis analyst John Zolidis wrote in a research note. His planned exit could also “suggest that further transformational moves within the digital and e-commerce channels are becoming more difficult to achieve.”
John Zolidis, president of Quo Vadis Capital, is bullish about Academy as well, basing what the company can accomplish on Hicks’ history with Foot Locker Inc.
“We followed Foot Locker through this period and feel confident that Mr. Hicks and his team will find operational and merchandising improvements to maintain positive sales and margin momentum for Academy,” wrote Quo Vadis, which is long on the stock.
“Within Walmart’s results are some mixed trends,” said John Zolidis, president and retail analyst at Quo Vadis Capital. “Clearly ecommerce has accelerated, but we can also see traffic was down 14% for the second consecutive quarter and that’s a big number.” Mr. Zolidis gave Walmart a “sell” rating last month, saying that it will be hard for the retailer to upstage its current results next year.
“The bottom-line is that this deal is not material to Ulta in FY21 but does give it another growth channel. A bigger question is why do this? Clearly, it reflects the lack of store opportunity for Ulta in the U.S.,” writes Zolidis in note on Target’s deal with Ulta.
Even as Lululemon stock eases from record highs, John Zolidis, president of Quo Vadis Capital, said in a research note before the earnings that he believed Wall Street “does not appreciate the material structural benefit from revenues shifting to the digital channel.”
John Zolidis, analyst at Quo Vadis capital, said other analysts were overlooking the positives of the management change and saw other benefits for Sprouts Farmers Market stock.
“Analysts appear (in our opinion) to be ignoring a complete turnover in the executive suite and accelerated investments in digital engagement and the rollout of delivery and pickup,” he said in a research note on Tuesday. “We believe the near-term benefit of these efforts is not reflected in forecasts, setting up very substantial upward revisions to earnings.”
“These businesses do very well when times are tough,” said Quo Vadis’ Zolidis. “Accordingly, we would expect these companies to continue to see a traffic and (possibly) profit boost for the foreseeable future. We would be buyers of both Dollar Tree and Dollar General today.”
“It was just explosive, humongous growth, and those numbers were very seductive to a lot of investors,” said John Zolidis, a restaurant-industry analyst and president of Quo Vadis Capital, which said it has never bought or sold Luckin stock.
“Tractor Supply was already a strong company with excellent fundamentals prior to the corona-crisis,” wrote Quo Vadis president John Zolidis. Quo Vadis rates Tractor Supply long.
“We believe it is reasonable to believe that secular shifts (less competition, more people moving to rural locations, superior economies in rural locations) together with new strategic initiatives (accelerated investment in digital) potentially reset Tractor Supply’s earnings power in a way not yet appreciated in consensus forecasts or the equity’s valuation.”
“Leaving aside the fraud, the figures that are available suggest that Luckin Coffee never had a viable business model,” Zolidis said, forecasting that the store closures will come as a result of losing access to capital. “The company grew too fast and acquired customers via promotional offers, without ever proving the economics.” In an April note, Zolidis said Luckin’s stores were “generating significant losses” and “do not appear to produce positive same-store sales.” He raised questions about whether the company could ever produce a profit.
Quo Vadis rates Luckin stock sell.