We may have underestimated the company’s earnings power. Although management wasn’t willing to up guidance, citing a lack of visibility, we think it is being too cautious, given the aforementioned success. Jo-Ann is clearly benefiting from consumers’ need for cheaper clothing and recreational alternatives, as evidenced by the particularly strong comparables in sewing merchandise.I highlighted these trends months ago, but its nice to see others are catching on. Jo-Ann is still a Buy. And, yes, I still own it.
Market share is there for the taking. Retail behemoth Wal-Mart continues to remove fabric from roughly 60 stores a month, eying 700 by yearend. The void in the supply chain gives Jo-Ann a great opportunity to grow its customer base without any incremental costs.
Monday, August 3, 2009
Value Line on JAS
At the risk of beating this idea to death, the following quotes from Value Line caught my eye: