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Industry Profile: Specialty Retail

Industry Profile: Specialty Retail. Travis Newton Truett Shaw. Specialty Retail is a part of the retail sector that is primarily concerned with ‘niche’ segments, mainly Generation Y (7-24 y/o) Gen Y makes up roughly 25% of the total U.S. Population. (72.9 million)

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Industry Profile: Specialty Retail

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  1. Industry Profile:Specialty Retail Travis Newton Truett Shaw

  2. Specialty Retail is a part of the retail sector that is primarily concerned with ‘niche’ segments, mainly Generation Y (7-24 y/o) Gen Y makes up roughly 25% of the total U.S. Population. (72.9 million) Gen Y-ers are categorized as trend-savvy, sophisticated, fickle, and particular-we know what we want. What the young kids are wearing these days…at least according to the analysts…super short mini skirts, sheer tops, vintage surf, terry cloth, velour, 80’s glam and punk,etc… Who? What? Why?

  3. In 1995 teens spent an average of $66/week. In 2002 the number went up to $87/week In 2002 teen spending reached nearly $170 billion A Generation Born to Spend

  4. Specialty retail is cyclical so it is very important to know what is going on NOW with the industry. The buzz has begun to build about the Holiday season , and so far things are looking up. Holiday sales are supposed to grow 5.7% this year to $217 billion! The Good: Cold weather requires a new wardrobe Stores are staying on top of trends Increased consumer optimism and pent up demand The Bad: Spending concerns, job security, energy costs are high, have the child tax credits been spent already? This Season

  5. Introduction • Shopping Malls • Casual Apparel • Teenagers/ Young Adults • Gap, Limited • Seasonal • Timing

  6. Abercrombie & Fitch Co • Symbol: ANF • Price: 27.96 • Range: 17.55-33.65 • 602 Stores • Abercrombie & Fitch • abercrombie • Hollister Co.

  7. Pacific Sunwear of California Inc • Symbol: PSUN • Price: 23.30 • Range: 10.00-24.22 • 799 Stores • Pacific Sunwear (619) • PacSun Outlet (73) • d.e.m.o. (107)

  8. Hot Topic, Inc • Symbol: HOTT • Price: 28.61 • Range: 12.79-29.31 • 505 Stores • Hot Topic (463) • Torrid (42)

  9. Market Capitalization Stock Price X Total Number of Shares Outstanding ANF: 2.86B PSUN: 1.78B HOTT: 1.33B

  10. Average Volume • Mean number of shares traded daily • ANF: 1.92M • PSUN: 1.82M • HOTT: 0.91M

  11. P/E Ratio • Price per share / Earnings per share • Higher = strong growth prospects • Lower = risky firm How much investors will pay for profit ANF: 14.71 PSUN: 28.95 HOTT: 36.91

  12. Earnings Per Share (EPS) • Net Income / Total Number of Shares Outstanding • High correlation with cash flow and stock price • ANF: 2.013 • PSUN: 0.793 • HOTT: 0.760

  13. Price To Sales Ratio • Stock Price / (Total Sales / Number of Shares) • Amount each dollar of sales is worth to investors • ANF: 1.69 • PSUN: 1.96 • HOTT: 2.85

  14. EV / EBITDA • Enterprise Value / Earnings Before Interest, Taxes, Depreciation, and Amortization • Economic Value Of A Company / Operational Cash Flow • ANF: 6.45 • PSUN: 13.25 • HOTT: 16.70

  15. Conclusion • Happy Halloween • Go Gators!

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