Equity Research Focusing on the Consumer Sector, Small Cap Consumer Research

Small Cap Consumer Research

Equity Research Focusing on the Consumer Sector

Small Cap Consumer Research, LLC is a leading company-sponsored equity research provider focusing on the consumer sector (apparel, brand licensing and specialty retailing segments).

Equity Bottom-Up

<ul><li>We are reiterating our projections as we look ahead for Vera Bradley as we enter 2Q earnings season.</li><li>Give the tumultuous last year, with Project Restoration launched and almost immediately abhorred by the company's OG shoppers, management then rethinking and softening the impact and reviving key pieces of the prior business model, followed by the recent resignation of the prior CEO and CFO, a new CFO and Executive Chairperson hiring and search for a new CEO, VRA investors can be excused for suffering a case of whiplash.</li><li>That said, we believe there remains a basis for the company to build on; given that we do not know where the ultimate goal for Vera Bradley is currently, we are rating VRA a Hold.</li></ul>

We are reiterating our projections as we look ahead for Vera Bradley as we enter 2Q earnings season.Give the tumultuous last year, with Project Restoration launched and almost immediately abhorred by the company's OG shoppers, management then rethinking and softening the impact and reviving key pieces of the prior business model, followed by the recent resignation of the prior CEO and CFO, a new CFO and Executive Chairperson hiring and search for a new CEO, VRA investors can be excused for suffering a case of whiplash.That said, we believe there remains a basis for the company to build on; given that we do not know where the ultimate goal for Vera Bradley is currently, we are rating VRA a Hold.

VRA: 2H Signposts: Greater Urgency...Is It Enough?

Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<ul><li>The WTR Consumer Stock Index trailed the Small Cap S&amp;P 600 in 2Q, declining 2.4% versus the 1.1% gain in the broader index.</li><li>The underperformance of our index was mostly due to a larger decline in prospective earnings, coupled with a lesser expansion in its prospective P/E ratio.</li><li>Our index saw prospective earnings decline 7.2% in 2Q versus a 5.0% decline in the S&amp;P 600, while its prospective P/E ratio expanded 0.8x in 2Q to 15.7x versus the 0.9x expansion to 15.3x in the S&amp;P 600.</li></ul>

The WTR Consumer Stock Index trailed the Small Cap S&amp;P 600 in 2Q, declining 2.4% versus the 1.1% gain in the broader index.The underperformance of our index was mostly due to a larger decline in prospective earnings, coupled with a lesser expansion in its prospective P/E ratio.Our index saw prospective earnings decline 7.2% in 2Q versus a 5.0% decline in the S&amp;P 600, while its prospective P/E ratio expanded 0.8x in 2Q to 15.7x versus the 0.9x expansion to 15.3x in the S&amp;P 600.

Consumer Products Monthly WTR Consumer Index Lags S&P 600 in 2Q

<ul><li>We are reiterating our Buy rating, $23 price target, and projections for Guess?</li><li>as we look at key trends for 2HFY26 and beyond.</li><li>GES, trading at 7.2X our FY26 EPS, has remained fully in "show me" mode with investors since the rag and bone acquisition (April 2024) and weakness in Guess?</li></ul>

We are reiterating our Buy rating, $23 price target, and projections for Guess?as we look at key trends for 2HFY26 and beyond.GES, trading at 7.2X our FY26 EPS, has remained fully in "show me" mode with investors since the rag and bone acquisition (April 2024) and weakness in Guess?

GES: 2H Signposts: Reproving the Model; Reiterate Buy, $23 PT

<ul><li>The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x from 18.1x at the end of 2024.</li><li>Prospective earnings for the index are down 2.3% so far this year, but we note that it has outperformed the broader S&amp;P 600 Small Cap Index, which is down 6.3%.</li><li>Meanwhile, the S&amp;P SmallCap 600 Index is down 13.1% YTD, better than the WTR Consumer Products Index, despite relative earnings underperformance versus our index, as its prospective absolute P/E ratio compressed a lesser 1.2x to 15.3x from 16.5x at the end of 2024. </li></ul>

The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x from 18.1x at the end of 2024.Prospective earnings for the index are down 2.3% so far this year, but we note that it has outperformed the broader S&amp;P 600 Small Cap Index, which is down 6.3%.Meanwhile, the S&amp;P SmallCap 600 Index is down 13.1% YTD, better than the WTR Consumer Products Index, despite relative earnings underperformance versus our index, as its prospective absolute P/E ratio compressed a lesser 1.2x to 15.3x from 16.5x at the end of 2024. 

WTR Consumer Products Index Lags S&P 600 YTD Despite Relative Earnings Outperformance

<ul><li>We are reiterating our Buy rating, $23 price target and projections for Guess?</li><li>after visiting stores in Long Island and the Metropolitan New York City area.</li><li>We believe Guess?</li></ul>

We are reiterating our Buy rating, $23 price target and projections for Guess?after visiting stores in Long Island and the Metropolitan New York City area.We believe Guess?

GES: Snapping the Store; Leveraging Summer Events, Denim; Reiterate Buy, $23 PT

United States

Tapestry, Inc. designs and markets clothes and accessories. The Company offers handbags, leather goods, footwear, fragrance, jewelry, outer wear, ready-to-wear, scarves, sunwear, travel accessories, and watches. Tapestry serves customers in the United States.

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Tapestry Inc (TPR US)

VRA: 2H Signposts: Greater Urgency...Is It Enough?

We are reiterating our projections as we look ahead for Vera Bradley as we enter 2Q earnings season. Give the tumultuous last year, with Project...

Small Cap Consumer Research

Consumer Products Monthly WTR Consumer Index Lags S&P 600 in 2Q

The WTR Consumer Stock Index trailed the Small Cap S&P 600 in 2Q, declining 2.4% versus the 1.1% gain in the broader index.

Water Tower Research

GES: 2H Signposts: Reproving the Model; Reiterate Buy, $23 PT

We are reiterating our Buy rating, $23 price target, and projections for Guess? as we look at key trends for 2HFY26 and beyond. GES, trading at...

Small Cap Consumer Research

WTR Consumer Products Index Lags S&P 600 YTD Despite Relative Earnings Outperformance

The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x...

Water Tower Research

GES: Snapping the Store; Leveraging Summer Events, Denim; Reiterate Buy, $23 PT

We are reiterating our Buy rating, $23 price target and projections for Guess? after visiting stores in Long Island and the Metropolitan New York...

Small Cap Consumer Research

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