Author Topic: TLRD - Tailored Brands  (Read 14909 times)

heth247

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Re: TLRD - Tailored Brands
« Reply #20 on: June 12, 2019, 08:39:45 PM »
If they cut dividend, it would be a horrible drop in price now, e.g. GME. I think they want to show people that they are not concerned about cashflow and can keep up with the dividend and debt payments.


If they just cut without buyback, yes. But cut it and announce a buyback of, say $100M, should be the best capital allocation. GME has much bigger problem and double digit rev decline. TLRD is not. They are paying $50M/year in dividend, which can buy back almost 20% of float at current price. If price drops more and it just means they can buy more with the same amount of money.  It looks like a no brainer to me.


spartansaver

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Re: TLRD - Tailored Brands
« Reply #21 on: June 12, 2019, 09:57:21 PM »
If they cut dividend, it would be a horrible drop in price now, e.g. GME. I think they want to show people that they are not concerned about cashflow and can keep up with the dividend and debt payments.


If they just cut without buyback, yes. But cut it and announce a buyback of, say $100M, should be the best capital allocation. GME has much bigger problem and double digit rev decline. TLRD is not. They are paying $50M/year in dividend, which can buy back almost 20% of float at current price. If price drops more and it just means they can buy more with the same amount of money.  It looks like a no brainer to me.

The shares are only worth something if they can refinance debt in 2021/2022. They should cut divi and any buyback and purely focus on that atrocious balance sheet.

spartansaver

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Re: TLRD - Tailored Brands
« Reply #22 on: June 12, 2019, 10:01:36 PM »
If they cut dividend, it would be a horrible drop in price now, e.g. GME. I think they want to show people that they are not concerned about cashflow and can keep up with the dividend and debt payments.


If they just cut without buyback, yes. But cut it and announce a buyback of, say $100M, should be the best capital allocation. GME has much bigger problem and double digit rev decline. TLRD is not. They are paying $50M/year in dividend, which can buy back almost 20% of float at current price. If price drops more and it just means they can buy more with the same amount of money.  It looks like a no brainer to me.

The shares are only worth something if they can refinance debt in 2021/2022. They should cut divi and any buyback and purely focus on that atrocious balance sheet.

Also, operating income for Men's Warehouse got crushed during the recession. If we head towards any kind of recession, this could get ugly very quickly. I think no-brainer for such a poor balance sheet may be a strong choice of words.

spartansaver

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Re: TLRD - Tailored Brands
« Reply #23 on: June 12, 2019, 10:09:10 PM »
If they cut dividend, it would be a horrible drop in price now, e.g. GME. I think they want to show people that they are not concerned about cashflow and can keep up with the dividend and debt payments.


If they just cut without buyback, yes. But cut it and announce a buyback of, say $100M, should be the best capital allocation. GME has much bigger problem and double digit rev decline. TLRD is not. They are paying $50M/year in dividend, which can buy back almost 20% of float at current price. If price drops more and it just means they can buy more with the same amount of money.  It looks like a no brainer to me.

The shares are only worth something if they can refinance debt in 2021/2022. They should cut divi and any buyback and purely focus on that atrocious balance sheet.

Also, operating income for Men's Warehouse got crushed during the recession. If we head towards any kind of recession, this could get ugly very quickly. I think no-brainer for such a poor balance sheet may be a strong choice of words.

Comparing anything to Gamestop will sound appealing.

heth247

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Re: TLRD - Tailored Brands
« Reply #24 on: June 12, 2019, 10:47:39 PM »
The shares are only worth something if they can refinance debt in 2021/2022. They should cut divi and any buyback and purely focus on that atrocious balance sheet.

Also, operating income for Men's Warehouse got crushed during the recession. If we head towards any kind of recession, this could get ugly very quickly. I think no-brainer for such a poor balance sheet may be a strong choice of words.

They only have $230M senior debt due in 2022, the rest (~$900M term loan) are not due until 2025.

Dalal.Holdings

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Re: TLRD - Tailored Brands
« Reply #25 on: June 12, 2019, 11:03:42 PM »
Yawn...they just have to keep paying down debt and EV will then get closer to market cap and shareholders will be taken care of. They have plenty of cash flow to cover the dividend. Doesn’t seem necessary to cut.

walkie518

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Re: TLRD - Tailored Brands
« Reply #26 on: June 13, 2019, 08:43:41 AM »
Yawn...they just have to keep paying down debt and EV will then get closer to market cap and shareholders will be taken care of. They have plenty of cash flow to cover the dividend. Doesn’t seem necessary to cut.

If cash flow holds!

spartansaver

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Re: TLRD - Tailored Brands
« Reply #27 on: June 13, 2019, 10:23:56 AM »
Yawn...they just have to keep paying down debt and EV will then get closer to market cap and shareholders will be taken care of. They have plenty of cash flow to cover the dividend. Doesn’t seem necessary to cut.

If cash flow holds!

Riding with a knife at the steering wheel.

TBW

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Re: TLRD - Tailored Brands
« Reply #28 on: August 06, 2019, 02:04:29 AM »
This is really interesting stock to consider (I am still doing my work on it). 

Negatives:
- negative comps with high debt, for a retailer usually means stay very far away.
- while gross margins are high, so is SG&A, with low net margins cash flow can decrease super quick esp if there is a recession
- inventories higher, albeit not that bad

Positives:
- should be able to paydown bond as it comes due in 2022
- valuation is crazy cheap 4.6x EV/EBITDA, ~1x FCF (assuming it holds) with debt longer dated (ie. if they pay down debt over 3 to 5yrs that flows directly to equity)

To me, I can see why this retailer fills a needed niche.  While I think retail is dead for some aspects, like general retailers (ie. Macy's, JCP), I still think niches should be fine (although I briefly liked LB with that thesis and that did not work out...).

In a situation like this I think buybacks are a bad idea.  If this works out, stock will be up huge.  Buying back would only increase an already large return.  Why not just fix balance sheet and increase odds of survival?  I also think that the company can likely work with the loan holders, as they can roll that debt a few times to help survival, but they need to make paying down the bonds a priority.  The bond maturity date is a very big risk for them, imo.

I also noticed that short interest is still 41% of the float!  I respect shorts opinions, what is their view here?  I know the acquisition was awful, and that there may have been some inventory games on the acquiree that I know some had issues with, but is the short really that compelling at this price?  Would be interested to hear that thesis.

Also interesting to consider a recession, lower interest rates would help them, but lower sales probably means losses...


simple

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Re: TLRD - Tailored Brands
« Reply #29 on: August 28, 2019, 05:47:00 PM »
Super-low valuation now! Falling knife though... Will be looking at it more.