The Daily Dose: A CEO's List of Wrongs

 | Oct 22, 2013 | 10:00 AM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

anf

,

jcp

,

aapl

,

aeo

,

urbn

,

mso

Stocks did nothing on Monday. Yawn. I already set you up with everything to attack to the funky September employment report, as seen here. So let's have a little bit of fun by bringing you into a couple of stories I have been following.

 Abercrombie & Fitch CEO Will be Gone -- Soon

 I think Mike Jeffries is an embarrassment to the three letter word CEO. In fact, I said as much live on the Fox Business Network Monday (email me for video link). A true leader is supposed to inspire and lift up those around him/her. Mike Jeffries does none of that, while Wall Street continues to view him as a sort of God-like creature (earnings call questions are softballs, disgusting).

  Here is his list of wrongs:

  1. Overexpanded the business right into the teeth of the recession, opening up a new brand and a ton of new domestic stores. The new brand has since been shuttered along with hundreds of stores opened at the peak of the real estate market. All of these failed investments were signed off by him and board cronies. Moreover, there is no color on the Gilly Hicks' division profits in the 10-Q -- Jeffries has even made the financials exclusive!
  2. Continued to open large flagship stores overseas while receiving data that they were underperforming. Was forced to reverse course on international store opening plans in 2012. I think a couple of these retail amusement parks are destined for closure.
  3. Slow to evolve Abercrombie & Fitch (ANF) into a more fashion- friendly teen apparel destination. Still not there by any means. The company doesn't even sell black in its store! All in all, Abercrombie is not offering trendy teens complete outfits, so they are more inclined to visit Forever 21, H&M.
  4. The root cause of the negative attention on the company stems directly from the policies of this CEO. A couple recent issues include unfair treatment of store associates in terms of wardrobe and the wacky procedures of those working on the company's private plane. Abercrombie has as a store look policy! Isn't this the damn United States of America?
  5. Has created an exclusive atmosphere in a world (teens) that wants to be included. It's cool these days to be a team, not be the meanies in the corner of the hallway making fun of others while wearing Abercrombie & Fitch size extra small t-shirts.

 Stats

  • Since Mike Jeffries assumed the role of CEO in May 1998, shares are +55% versus the S&P 500 at +58%.
  • Total comps have lagged rivals American Eagle (AEO) and Urban Outfitters (URBN) since the fourth quarter of 2011.

 J.C. Penney is still a Dog --Woof

 J.C. Penney (JCP) announced Monday evening it fixed its deal with Martha Stewart Living (MSO) and is giving its stake in MSO back. No, do not buy this stock!  #REITERATED

 Apple Fun Event

 While you drool over all these sexy new Apple (AAPL) products, here are a couple other reasons to dig the stock as a 12-month holding:

  • Gross margin appears to be back toward coming in at the top end of guidance.
  • Gross margin expansion appears set for calendar 2014.
  • Come holidays, Apple will be in the market with complete refreshes, and these refreshes finally are offering wow factor. Take that Android!
  • All of this impending line-item loveliness only raises the prospect of a major shareholder friendly set of actions early 2014. Thank you Carl Icahn for pushing this!

Columnist Conversations

Index Chart of the Day: SPX and RUT Divergence SPX vs. RUT (YTD) View Chart »&nbs...
Is this the biotech revolution or the biotech bust? View Small Cap Biotechs Like Never Before: Transparency is...
The S&P 500 index finished the week unchanged, but the VIX was up 5%, the divergence sending a bit of a mi...
Weyerhaeuser has been struggling since testing the 2013 highs last month. The stock extended a powerful...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.