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 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

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 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

<ul><li>We are reiterating our projections and Suspended rating for Vera Bradley after visiting stores in Connecticut, New Jersey and New York.</li><li>It is clear in our store visits that the company remains focused on creating the right balance between Pre and post Project Reformation to 1) attract new and younger consumers and 2) retain the OG Vera Bradley shopper.</li><li>For main line stores, this entails the return of key collaborations such as Peanuts and Harry Potter, bringing back key patterns and features which can attract a core Vera shopper, including the return of zippers, longer handbag straps and linings; that said, the focus on leather, solids and fashion newness remains.</li></ul>

We are reiterating our projections and Suspended rating for Vera Bradley after visiting stores in Connecticut, New Jersey and New York.It is clear in our store visits that the company remains focused on creating the right balance between Pre and post Project Reformation to 1) attract new and younger consumers and 2) retain the OG Vera Bradley shopper.For main line stores, this entails the return of key collaborations such as Peanuts and Harry Potter, bringing back key patterns and features which can attract a core Vera shopper, including the return of zippers, longer handbag straps and linings; that said, the focus on leather, solids and fashion newness remains.

VRA: Snapping the Store: Picking the Right Spots for Summer

<ul><li>We are suspending our rating and price target for Vera Bradley and lowering our projections after a below expectations 1Q, and the announced departure of CEO Jacqueline Ardrey and Chief Financial Officer Michael Schwindle.</li><li>Further, the company has already hired Martin Layding (x-Divisional CFO for the Coach brand) as CFO, with Board member Ian Bickley (Coach management) entering into a new role as Vera Bradley Executive Chairman until the CEO transition is completed.</li><li>Given the shifts, the company suspended any formal financial guidance.</li></ul>

We are suspending our rating and price target for Vera Bradley and lowering our projections after a below expectations 1Q, and the announced departure of CEO Jacqueline Ardrey and Chief Financial Officer Michael Schwindle.Further, the company has already hired Martin Layding (x-Divisional CFO for the Coach brand) as CFO, with Board member Ian Bickley (Coach management) entering into a new role as Vera Bradley Executive Chairman until the CEO transition is completed.Given the shifts, the company suspended any formal financial guidance.

VRA: Time For Change (Again); Suspending Rating, PT; Lowering Projections

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)

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

VRA: Snapping the Store: Picking the Right Spots for Summer

We are reiterating our projections and Suspended rating for Vera Bradley after visiting stores in Connecticut, New Jersey and New York. It is...

Small Cap Consumer Research

VRA: Time For Change (Again); Suspending Rating, PT; Lowering Projections

We are suspending our rating and price target for Vera Bradley and lowering our projections after a below expectations 1Q, and the announced...

Small Cap Consumer Research

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