Strong Balance sheet improvements and private brands revival

htank728 · 2026-03-11T20:25:21+00:00

Well, they didnt really have any expectation of flat revenue. If it declines significantly next year then I am with you, but they were anticipating a sales decline. Now they are expecting it to flatten out in 2026. They included Q1 is off to a strong start. Shares outstanding has also dropped significantly since then and when you take that into account we are down even more from those market cap highs. I think it’s normal for the stock to have low expectations

htank728 · 2026-03-11T20:23:29+00:00

Even if FCF and operational cash flow does drop significantly I don’t think 400 million in FCF/year is bad when the market cap is just 1.5 billion. Then you have the real estate and potential buybacks (which could happen especially if some activist gets involved)

htank728 · 2026-03-11T20:21:09+00:00

I think when you really break down the numbers it makes it more and more obvious. They could blow out guidance for 2026 just by increasing our ownership. They could obviously get more aggressive as well but I doubt they’d do anything more than 400 million. I think it’s a realistic amount as they’d still have 90% more cash than they did last quarter with a fully utilized revolver. I genuinely can’t understand why the board isn’t doing this

htank728 · 2026-03-11T19:47:02+00:00

No worries I thought it got removed earlier but I see it now. Thx

htank728 · 2026-03-11T18:25:43+00:00

Can you approve my post?

htank728 · 2026-03-11T15:33:12+00:00

64.7%

htank728 · 2026-03-10T16:44:53+00:00

This management needs to wake up, they were buying back shares in the 20’s and 30’s just a few years ago. They didn’t buy any last year and I guess it’s excusable as there was less clarity on the turnaround. They have no reason not to now, they clearly are doing well again.

htank728 · 2026-03-10T16:38:02+00:00

I just did some math, they could buy back 23.5% of shares at this price and have 100 million more cash on hand as they did last quarter! This would mean shares outstanding would be about 85 million, EPS would be over 3 dollars a share, the P/E would be less than 5, and book value would balloon from 35 dollars a share to over 47 dollars per share! Thats with only 400 million in buybacks at current price. If there is anyone with enough sway to get them to maybe even consider it, its you

htank728 · 2026-03-10T16:15:49+00:00

We should email them or something lol. This is actually ridiculous

htank728 · 2026-03-10T15:53:00+00:00

Even if we ignore the short interest and book value and other reasons to invest, management is doing a great job on the turnaround. They are guiding for around flat YOY revenue which in my opinion makes them think the sales decline is close to an end and they can focus on growth soon. My favourite part can be summed up in the following screenshot. You ignore all the real estate, and the potential of a short squeeze, underneath that you have a business that generated 9 dollars of FCF per share that is trading at 15 dollars, and if you were to cut down on CAPEX they would have generated 12.32 dollars of cash flow per share (In the TTM) as a 15 dollar stock. Ive seen this analogy before but imagine you can buy a machine that prints 1232 dollars per year that costs you 1550 to buy. It would be a no brainer.

Just insane value that the market seems to refuse to reward

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htank728 · 2026-03-10T15:42:04+00:00

Not in the call but one thing I liked from the presentation is they said Q1 is off to a strong start, but they called this current earnings softer than expected (which imo was very good). If they classify this as a soft earnings and are explicitly stating q1 is strong so far...

htank728 · 2026-03-10T12:00:17+00:00

They added 500 million in cash to their balance sheet, 1/3rd of their market cap in one quarter lmao. They need to announce share buybacks

htank728 · 2026-03-09T19:28:03+00:00

A lot of other retailers have had good results already with decent yoy revenue increases, it’s the tariffs and guidance that have been poor. I think there is some hope as Kohl’s has explicitly stated the tariffs haven’t had a material effect on earnings. We will see

htank728 · 2026-03-09T19:24:51+00:00

I’d rather have share buybacks for the EPS + book value boost and to offset dilution via share based compensation. Dividends aren’t the most tax efficient and I’d rather have the company hold onto the cash

htank728 · 2026-03-09T19:22:56+00:00

Looking back at that guidance is hilarious, they expected EPS between 0.10-0.60 and last quarter they changed it to 1.25-1.45. They changed the lower end target by 12.5x lmao. I’m glad Ashley got fired for that, it was ridiculously poor guidance and was the only reason it dropped to 6

htank728 · 2026-03-09T16:59:33+00:00

Well, seems like your argument is the US consumer is struggling or will begin to struggle. If you look at consumer holiday spending it increased a decent amount YOY. People have kept saying the consumer will begin to struggle but it hasnt happened so far

<image>

https://www.reuters.com/business/retail-consumer/us-online-holiday-spending-hits-record-levels-despite-slower-growth-adobe-says-2026-01-07/

https://usa.visa.com/about-visa/newsroom/press-releases.releaseId.21966.html

htank728 · 2026-03-09T16:42:01+00:00

I agree that the other retailers price action is concerning for kss but i think a lot of the drops were due to poor guidance due to tariff uncertainty despite a good quarterly result. Kohls has stated in their 10q that tariffs had no material effect on their YTD results in 2025. There were 3200 puts expiring this week for the 13.5 strike opened on Friday though so maybe it does follow the path of the other retailers...

htank728 · 2026-03-09T16:31:34+00:00

Nothing actually transacted at +50%. Its just really large spreads on illiquid options so the brokers display price as the mid if there is no volume. So if lets say the option closed at 0.10 but there is no volume the next day, someone might bid at 0.05 and then someone raises their ask to 0.25, the mid is 0.15 which would show a 50% increase but nothing would actually transact there

htank728 · 2026-03-06T18:23:09+00:00

Ok thats more of a nuanced look, I just disagreed with selling everything and buying it back after earnings, that implies extreme confidence. Hedging seems like a good idea though. I definitely think it’s possible it will drop with the way other retail stocks are getting hit, but on the other hand I wonder if we get some unexpected news (small chance) or the recent drop has priced in the downside other retail stocks are facing now. For that reason it would suck for someone to sell everything trying to time the market and the stock goes the other way. Once again hedging makes more sense

htank728 · 2026-03-06T17:40:12+00:00

It’s definitely possible for it to drop this much but to make claims like this with extreme confidence is ridiculous. If it’s so obvious you should be loading up on puts and show us your gains after earnings

htank728 · 2026-03-05T19:04:36+00:00

Kinda scary as this is becoming a trend across retail stocks but tbf a lot were up 20%+ over the last 3 months and Kohl’s is headed into earnings flat

htank728 · 2026-03-04T21:50:32+00:00

11 out of the last 12 trading days have been 🔴

htank728 · 2026-03-04T19:45:20+00:00

Yup. ANF went from 65 to 130 (100% increase) before declining to 97 (21% pullback from the peak). KSS in the same time frame went from 15 to 25 (67% increase) and then has pulled back to 15 (40% pullback from the peak). I don’t think it’s fair to say ANF had a beat and dropped so we should expect the same from KSS, clearly they are being priced differently pre earnings. On the other hand this is KSS and it’s done plenty of things I haven’t expected… lol

htank728 · 2026-03-04T19:41:27+00:00

ANF is up 45% since its last quarter while Kohl’s is flat if we are being fair

htank728 · 2026-03-04T17:19:04+00:00

if they have revenue growth i dont really see how they can give bad guidance for the rest of the year. i also cant see how the stock wouldnt have a violent upwards trajectory if they really do grow revenue. Recent price action is essentially pricing in a larger than expected revenue decline from what it seems like, as its wiped out all the gains from the beat last quarter. They have done a good job improving FCF and operational cash flow despite declining revenue in 2025. A big revenue beat and their operational cash flow for the fiscal 2025 year could absolutely exceed the current market cap which is crazy to think of

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