I'm actually not sure where to start. So much is happening in the markets, let alone in our country.
Some downtrodden names, those that really cratered as the pandemic reared its ugly head, are getting tailwinds as markets continue what seems like a remarkable recovery. This is happening against a backdrop of protests, civil unrest, cities in chaos, a growing political divide, a recent impeachment and a growing national debt, all in an election year. Then there is the issue nearly everyone has forgotten about over the past 10 days or so, the one that dominated for months and kept us indoors and protected, as if we were veal -- the pandemic.
It's as if 1918, 1968, 1973, 1982, 1987 and 2008 all got together and had a baby named 2020, and that child inherited the worst traits of each. Except for the market recovery, that is. I've never seen anything like this. The markets are either disconnected or forward looking. If they are forward-looking, they see better times ahead, and hope springs eternal.
We are seeing retailers, restaurants and others come back to life as if investors are seeing way past the slow ramp-up to reopening. After Wednesday's market close, first-quarter results were posted by specialty retailer Fossil Group (FOSL) , a name I had success with a couple years back and re-engaged with last November. Same-store sales for Fossil were down 14%, but revenue of $390.7 million beat consensus estimates by $9 million and the company hit bottom-line expectations with a loss of $1.51 per share. Markets likely were expecting worse results as Fossil rose more than 14% on Thursday. Fossil shares are still down 45% year to date, but are up 62% since bottoming around $2.70 in May (ah, the magic and illusion of percentage gains as applied to lower prices).
Fossil ended the quarter with $245 million, or $4.90 per share, in cash, thought that figure was bolstered by a $100 million drawdown of a credit facility. Total debt ended the quarter at $320 million. FOSL expects to end the second quarter with $200 million in cash. This is what we are seeing these days -- cases of "things are bad, but not as bad as we thought."
Elsewhere, struggling restaurant name Luby's Inc. (LUB) , owner of Luby's Cafeteria restaurants and more importantly Fuddruckers (IMHO, some of the best burgers available in the segment), which I gave up on years ago, jumped 121% on Thursday as it announced the "pursuit" of selling off company assets, including owned real estate. Keep in mind, that big jump came on a sub-$1 stock price after years of decline in the shares.
Luby's said it intends to distribute net proceeds of asset sales to shareholders after paying off debt, which stood at about $51 million at the end of the latest quarter. That does not include $29 million in operating leases.
What a terrible time to sell restaurant assets, or commercial real estate.