Pier 1 Imports, Franklin Covey, Facebook, Netflix and Capital One highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – January 12, 2017 –Zacks Equity Research highlights Pier 1 Imports (NYSE: PIR – Free Report ) as the Bull of the Day and Franklin Covey (NYSE: FC – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Facebook (NASDAQ: FB – Free Report ), Netflix (NASDAQ: NFLX – Free Report ) and Capital One (NYSE: COF – Free Report ).

Here is a synopsis of all five stocks:

Bull of the Day :

The consumer retail environment is extremely cutthroat, and has been facing competitive headwinds (think Amazon), deterioration store traffic trends, and higher costs correlated with the growth of e-commerce adaptations. But one retail company has seen a positive turnaround from their investments in e-commerce, inventory control, and improved marketing. This company isPier 1 Imports (NYSE: PIR – Free Report ), and they are the Zacks Bull of the Day.

This Zacks Rank #2 (Buy) company consists of a chain of retail stores operating under the names Pier 1 Imports and The Pier, selling a wide variety of furniture, decorative home furnishings, dining and kitchen goods, accessories and other specialty items for the home. Additionally, the company, through certain subsidiaries, operates stores in the United Kingdom under the name The Pier. The company supplies merchandise and licenses the Pier 1 name to Sears Mexico and Sears Puerto Rico.

Recent Earnings Data

In the middle of December, management posted Q3 16 results where they easily beat both the Zacks consensus earnings and revenue estimates. The company saw year over year gains in the following; comparable sales +1.8%, e-commerce sales +28% (now accounting for about 20% of net sales), gross profit +6.7%, and EPS +30.7%.

Management’s Take

According to Alex W. Smith, President and CEO, “ Sales trends rebounded in the second half of November, following the election, which enabled us to deliver third quarter results well ahead of our forecast. Specifically, we had positive company comparable sales and higher than planned profits in the third quarter. We are making progress on our strategies to deliver shareholder value through our merchandising, marketing, supply chain and real estate initiatives. Our seasonal assortments are resonating with customers and we’re seeing strength across nearly all our product categories. As always, we’re pleased with how our teams and associates are executing against our holiday plans. We have a great deal of confidence in our brand positioning and long-term financial outlook. Pier 1 Imports has always been known for inspirational merchandise, great value and outstanding customer service. Layering our omni-channel capabilities on top of that foundation makes Pier 1 Imports a formidable force in the home furnishings space. Our teams are focused on continually enhancing our business model to ensure that we thrive in today’s era of retailing and well into the future .”

Bear of the Day :

Cyclical companies tend to make the bulk of their revenues in a single quarter, or even a half of a year. This business model has been successful for many companies, think toy companies, or retail merchants. But when the “off peak” quarters are worse than expected, and when management states they now expect their cyclical heights to be more back-ended than expected, warning signals start going off. This is the case for our Zacks Bear of the Day, Franklin Covey (NYSE: FC – Free Report ).

This Zacks Rank #5 (Strong Sell) company is an international learning and performance solutions company dedicated to increasing the effectiveness of individuals and organizations. They provide consulting services, training and education programs, educational materials, publications, assessment and measurement tools, implementation processes, application tools and products designed to empower individuals and organizations to become more effective.

Recent Earnings Results

On December 23rd, management made a Q1 17 pre-earnings announcement where they stated that Q1 adjusted EBITDA would show a loss of -$2.5 million, compared to a profit of $3.4 million in the year ago quarter. Management cited increased business investments, timing delays, and their business model shift towards an all-access subscription sales for customers as reasons for the losses.

Then on January 5th, management posted Q1 17 results where they missed both the Zacks consensus earnings and revenue estimates for the fourth consecutive quarter. On a year over year basis, the company reported losses in the following categories; Net revenues -12%, Gross profits -16%, EBITDA -206%, Operating income -405%, Net income -601%, and Adjusted earnings per diluted share -694%. Management also saw general and administrative expenses rise by 10% during the same time frame.

Management’s Take

According to Bob Whitman, Chairman and CEO, “ Our fiscal first quarter is an important staging quarter in which we make significant investments in growing our sales and delivery forces, marketing, developing new offerings, and building strong sales pipelines that form the basis for growth through the balance of the year. We were very pleased to have achieved significant year-over-year growth in the amount of All Access Passes invoiced during the first quarter, including a very high renewal rate for those All Access Passes sold in last year’s first quarter. We were also pleased that our sales pipelines grew significantly during the quarter, and that a significant start to the conversion of those pipelines began in December. As a result of the foundation laid the first quarter, we expect our results for fiscal 2017 to fall within our previously provided guidance range, specifically, that the sum of reported Adjusted EBITDA plus the change in deferred revenue, less certain costs, will fall between $35 million and $38 million .”

Additional content:

At 150 Million Strong, Instagram Brings Skippable Ads to Stories

On Wednesday, Instagram announced that its Stories feature will debut skippable advertisements, and brands will soon be able to place five-second photos or 15-second videos between user content.

The popular photo-sharing app, which is owned by Facebook (NASDAQ: FB – Free Report ), launched Stories about 6 months ago. Users can post photo and video slideshows that disappear after a 24-hour period, a shamelessly similar concept to Snapchat Stories.

Instagram Stories’ ad style will also copy that of Snapchat’s, all in the hopes of creating a more natural viewing experience. About 30 top brands have already committed to begin testing these skippable ads later this month, including Netflix (NASDAQ: NFLX – Free Report ), Capital One (NYSE: COF – Free Report ) and many others.

Despite its penchant for copying, Instagram Stories is growing incredibly quickly. The platform now has 150 million daily active users, about as many users as the last number announced by Snapchat. It helps that Stories is located right at the top of the Instagram home screen instead of a separate tap.

Monetizing a young feature is risky, but it’s clear that Instagram believes Stories’ growth is strong enough to take on further competition from Snapchat and any drop-off in users that the ads may cause.

Zacks' Top 10 Stocks for 2017

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About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

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Pier 1 Imports, Inc. (PIR): Free Stock Analysis Report
 
Franklin Covey Company (FC): Free Stock Analysis Report
 
Facebook, Inc. (FB): Free Stock Analysis Report
 
Capital One Financial Corporation (COF): Free Stock Analysis Report
 
Netflix, Inc. (NFLX): Free Stock Analysis Report
 
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