27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
In a report published Monday, Barclays analyst Joan Payson commented on the U.S. Luxury, Apparel & Footwear space with a focus on handbags.
According to Payson, some of the slowdown in the space could be related to near-term disruption around tourism (due to unfavorable exchange rates) and is "more pronounced" in the department store channel, which some brands have less exposure to than others. As such, there has already been a "productivity correction" among some of the top domestic names.
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Coach: Remain Confident In Long-Term Positioning
According to Payson, Coach Inc (NYSE: COH) is positioning itself for long-term growth. The company's remodeling of 70 stores in North America is so far generating "strong" positive comps, which is expected to continue moving forward, potentially resulting in breakeven comps in fiscal 2016.
In addition, Coach's strategy of being less promotional provides the company with a way to offset gross margin "degradation" from the increased mix towards cost elevated products.
Finally, Coach is likely to see continued "muted" results in China but could be offset by a rebound in Japan and new opportunities in Europe.
Shares remain Overweight rated with an unchanged $50 price target.
Kate Spade: Expect Upside From Current Levels
FREE REPORT: How To Learn Options Trading Fast
In this special report, you will learn the four best strategies for trading options, how to stay safe as a complete beginner, a 411% trade case study, PLUS how to access two new potential winning options trades starting today.Claim Your Free Report Here.
According to Payson, North American trends will continue to pressure Kate Spade & Co (NYSE: KATE), especially tourist related sales in key regions, which represent nearly 30 percent of its domestic store base.
However, Payson sees Japan sales offsetting tourist related sales declines in the U.S. as retail data points in Japan point towards "strong" department store and accessory performances. In addition, Google trend data suggests that search activity for the Kate Spade brand is still showing "heightened activity" with search results up 8 percent throughout the second quarter, outpacing double-digit declines at some competitors.
Finally, Kate Spade's expansion into new categories across women's, kids, home categories and fitness apparel demonstrates management's commitment to "escalating" its offerings.
Shares remain Overweight rated with an unchanged $41 price target.
Michael Kors: Trends To Remain ‘Challenged'
Finally, Payson noted that Michael Kors Holdings Ltd (NYSE: KORS) is expected to continue seeing its comp trends remaining "challenged" due to its over-exposure to the already "pressured" tourist groups. At the same time, the company's industry leading domestic productivity level of over $1,900 per square foot may have reached peak productivity and will likely decline.
Payson also pointed out that Macy's, Inc. (NYSE: M)'s comp declines within its handbag category last quarter suggests there was "meaningful" price competition between Kors' wholesale and retail channels, indicating the company is "having a tough time" as consumers are increasingly moving toward wholesale channels.
Finally, new initiatives surrounding new store growth, the development of its men's business, and continued investments in its distribution infrastructure is hurting the company's overall operating margins.
Shares remain Equal-Weight rated with an unchanged $50 price target.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.