New 52-week low for Shoe Pavilion Inc. (SHOE) after they predicted a wider-than-expected Q1 loss yesterday. Shares are now trading just under $5 and in the last three months SHOE’s shares have fallen 26%.
Yesterday Shoe Pavilion said traffic and sales have declined because many new Shoe Pavilion stores are in new shopping malls still under construction. Forget the fact that nobody shops there anymore, I guess they left that out. However I could be wrong, the company said its same-store sales (at stores open for at least a year) grew 7.8%.
Shoe Pavilion is scheduled to post its full first-quarter earnings on May 8th. So yesterday’s bad news could be an indicator that even worse news is headed our way next Monday.
Today Roth Capital Partners LLC downgraded SHOE to "Hold" from "Buy," and cut 2007 earnings estimates to 9 cents per share from 23 cents per share. Everybody loves shoes, but investing in SHOE may not be the way to go. The question is can they keep growing and will Wall Street embrace the stock? When I think shoes, I think Zappos.com and if they get around to IPO’ing, I’ll be on that train.
Frank Lara Jr.
Frank Lara Jr. can be reached at [email protected]; he does not own securities in the companies he covers.