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

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, $20 price target and projections for Lands' End as we review the June catalog.</li><li>Picking up on a theme from last month, the June catalog focus is on the Lands' End "tote girl." The company has continued to leverage the popularity of their totes (the most purchases Lands' End item) and an overall trend towards personalization and embellishment, to capture a younger customer and drive multiple item purchases.</li><li>For June, the focus remains on swimwear (now at 50% off), and great new looks for the Lands'; End summer lifestyle, from a new linen collection, dresses, the emerging swim dress category and fitted tops and cotton sweaters.</li></ul>

We are reiterating our Buy rating, $20 price target and projections for Lands' End as we review the June catalog.Picking up on a theme from last month, the June catalog focus is on the Lands' End "tote girl." The company has continued to leverage the popularity of their totes (the most purchases Lands' End item) and an overall trend towards personalization and embellishment, to capture a younger customer and drive multiple item purchases.For June, the focus remains on swimwear (now at 50% off), and great new looks for the Lands'; End summer lifestyle, from a new linen collection, dresses, the emerging swim dress category and fitted tops and cotton sweaters.

LE: Snapping the Catalog: Tote Girls Rule; Reiterate Buy, $20 PT

<ul><li>We are reiterating our Buy rating and $20 price target for Lands' End and leaving our projections for the remainder of FY25 and FY26 basically unchanged after the company reported inline 1Q EPS, but revenue and EBITDA at the lower end of their guidance and below Street expectations.</li><li>That said, given the shift to higher licensing revenue (up 60%), the overall 1Q YoY revenue decline of 8.5%, with gross margins rising 210 bp, was not a material surprise.</li><li>Management reiterated FY25 guidance, as the company has mitigated the impact of tariffs and is focused on continuing to drive higher overall returns via increased licensing, lower inventories and discounting and shifting the customer base to a younger group focused on solutions for their lifestyle.</li></ul>

We are reiterating our Buy rating and $20 price target for Lands' End and leaving our projections for the remainder of FY25 and FY26 basically unchanged after the company reported inline 1Q EPS, but revenue and EBITDA at the lower end of their guidance and below Street expectations.That said, given the shift to higher licensing revenue (up 60%), the overall 1Q YoY revenue decline of 8.5%, with gross margins rising 210 bp, was not a material surprise.Management reiterated FY25 guidance, as the company has mitigated the impact of tariffs and is focused on continuing to drive higher overall returns via increased licensing, lower inventories and discounting and shifting the customer base to a younger group focused on solutions for their lifestyle.

LE: 1Q Review: Holding the Course in Rough Waters; Reiterate Buy, $20 PT

<ul><li>We are reiterating our Buy rating, price target and projections for Lands' End with the company announcing 1QFY25 (April) results before the open on Thursday.</li><li>We believe in the key tenets of the Lands' Ends story, from: 1) lowering discounting (and inventory); 2) shifting the product and customer mix to a younger, more fashion driven buyer who will purchase multi-item offerings; 3) expanding and shifting the product mix with higher-margin licensed categories; 4) continuing to expand the online marketplace offerings; 5) leveraging the company's strong brand and ability to quickly respond to capture more business services contracts and 6) growing the international business via owned and licensed offerings.</li><li>That said, even before tariffs, the optics of 2025, with increased levels of licensed goods, would make this year a period of transition.</li></ul>

We are reiterating our Buy rating, price target and projections for Lands' End with the company announcing 1QFY25 (April) results before the open on Thursday.We believe in the key tenets of the Lands' Ends story, from: 1) lowering discounting (and inventory); 2) shifting the product and customer mix to a younger, more fashion driven buyer who will purchase multi-item offerings; 3) expanding and shifting the product mix with higher-margin licensed categories; 4) continuing to expand the online marketplace offerings; 5) leveraging the company's strong brand and ability to quickly respond to capture more business services contracts and 6) growing the international business via owned and licensed offerings.That said, even before tariffs, the optics of 2025, with increased levels of licensed goods, would make this year a period of transition.

LE: 1Q Preview: Being Creative in Uncertain Times; Reiterate Buy, $20 PT

<ul><li>We are reiterating our Buy rating, projections and $20 price target for Lands' End after reviewing the May catalog.</li><li>As we start to enter the "buy now wear now" swim season, Lands' End has materially ramped overall newness, with new technical advances for the core Tugless line, multiple additions to the Slendersuit offerings and new seamless looks, all of which serve to emphasize the company's technological leadership and ability to offer multiple choices for different body sizes in the core swimwear offerings.</li><li>Further, there remains continued expansion/emphasis on pre and post swim looks, with swim dresses, wraps and cover-ups.</li></ul>

We are reiterating our Buy rating, projections and $20 price target for Lands' End after reviewing the May catalog.As we start to enter the "buy now wear now" swim season, Lands' End has materially ramped overall newness, with new technical advances for the core Tugless line, multiple additions to the Slendersuit offerings and new seamless looks, all of which serve to emphasize the company's technological leadership and ability to offer multiple choices for different body sizes in the core swimwear offerings.Further, there remains continued expansion/emphasis on pre and post swim looks, with swim dresses, wraps and cover-ups.

LE: Snapping the Catalog; New Tricks for Swim & Summer Style; Reiterate Buy, PT

United States

Oxford Industries, Inc. is an international manufacturer and wholesale marketer of branded and private label apparel for men, women, and children.  The Company's private label customers include national chains, specialty catalogs, mass merchandisers, department stores, specialty stores, and Internet retailers.

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Oxford Industries (OXM US)

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

LE: Snapping the Catalog: Tote Girls Rule; Reiterate Buy, $20 PT

We are reiterating our Buy rating, $20 price target and projections for Lands' End as we review the June catalog. Picking up on a theme from last...

Small Cap Consumer Research

LE: 1Q Review: Holding the Course in Rough Waters; Reiterate Buy, $20 PT

We are reiterating our Buy rating and $20 price target for Lands' End and leaving our projections for the remainder of FY25 and FY26 basically...

Small Cap Consumer Research

LE: 1Q Preview: Being Creative in Uncertain Times; Reiterate Buy, $20 PT

We are reiterating our Buy rating, price target and projections for Lands' End with the company announcing 1QFY25 (April) results before the open...

Small Cap Consumer Research

LE: Snapping the Catalog; New Tricks for Swim & Summer Style; Reiterate Buy, PT

We are reiterating our Buy rating, projections and $20 price target for Lands' End after reviewing the May catalog. As we start to enter the "buy...

Small Cap Consumer Research

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