Wells Fargo Reiterates Perform, Lowers Range to $14-15 on Gordmans Stores

Wells Fargo maintains its Perform rating on Gordmans Stores, Inc. GMAN as strong margins offset softness and lowers its valuation range to $14-15 from $14-17 on valuation multiple given macro concerns. Wells Fargo says, “GMAN's Q3 2011 EPS of $0.25 was ahead of our estimate and consensus of $0.19 and guidance of $0.18-0.19. However, $0.04 of the beat was due to $1MM of SG&A expenses being pushed into Q4. Strong gross margins (up 80bps vs. our est. of flat, due to better initial mark-up & lower markdowns) offset weaker same-store sales growth (down 1.3% vs. our est. for up 0.5%). We are raising our 2011E EPS to $1.28 from $1.24 and maintaining our 2012E EPS of $1.38.” GMAN closed at 12.85 per share on Wednesday.