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, $4 price target and projections for Vince Holding after visiting stores in Connecticut, Long Island and New Jersey.</li><li>After a somewhat confusing visit last month, when product flows were shifted due to the tariff situation, our June tours were more normalized, with Vince stores beginning to flow the Pre-Fall 1 collection; while slightly (one week) later than last year, we believe the depth and breadth of goods demonstrates the company is quickly responding to tariffs and providing the customer with the looks, quality and versatility they expect.</li><li>Further, we believe the Summer and Pre-Fall 1 collections have remained fashion right, with great colors, solid knits and sweaters and warm weather items, from dress to short sleeve tops and shorts.</li></ul>

We are reiterating our Buy rating, $4 price target and projections for Vince Holding after visiting stores in Connecticut, Long Island and New Jersey.After a somewhat confusing visit last month, when product flows were shifted due to the tariff situation, our June tours were more normalized, with Vince stores beginning to flow the Pre-Fall 1 collection; while slightly (one week) later than last year, we believe the depth and breadth of goods demonstrates the company is quickly responding to tariffs and providing the customer with the looks, quality and versatility they expect.Further, we believe the Summer and Pre-Fall 1 collections have remained fashion right, with great colors, solid knits and sweaters and warm weather items, from dress to short sleeve tops and shorts.

VNCE: Snapping the Store: Flows, Fashion Return to Normal; Reiterate Buy, $4 PT

<ul><li>We are reiterating our Buy rating and $4 price target on Vince Holding Corp. and increasing our FY25 EPS projections after the company registered slightly better 1QFY25 (April) results than previously guided and provided initial 2QFY25 guidance which indicates Vince is registering strong progress in reducing the negative impact of China tariffs, while continuing to offer compelling items for their core customer base.</li><li>Further, we believe virtually all the key pieces of the Vince growth story, from store expansion, more men's offerings, continued category expansion and international growth opportunities, remain fully intact and will become even more evident as the tariff shock abates.</li><li>As such, we are raising our EPS projections for FY25 and reiterating our Buy rating and $4 price target for VNCE.</li></ul>

We are reiterating our Buy rating and $4 price target on Vince Holding Corp. and increasing our FY25 EPS projections after the company registered slightly better 1QFY25 (April) results than previously guided and provided initial 2QFY25 guidance which indicates Vince is registering strong progress in reducing the negative impact of China tariffs, while continuing to offer compelling items for their core customer base.Further, we believe virtually all the key pieces of the Vince growth story, from store expansion, more men's offerings, continued category expansion and international growth opportunities, remain fully intact and will become even more evident as the tariff shock abates.As such, we are raising our EPS projections for FY25 and reiterating our Buy rating and $4 price target for VNCE.

VNCE: 1Q Review: Moving Quickly to Keep on Winning; Reiterate Buy, $4 PT

<ul><li>We are reiterating our Buy rating, projections and $4 price target for Vince Holding with the company announcing 1QFY25 (April) results before the open on Tuesday.</li><li>We believe Vince's business model remains fully intact, but material gains have been deferred by the current China export tariff regime; as such, we expect revenue and demand from both the wholesale and owned stores to be solid, while we also expect, as the company slowly shifts the supply chain to lower tariff countries, for near-term margins to remain under material pressure.</li><li>The key will be what the potential/ business model is going forward.</li></ul>

We are reiterating our Buy rating, projections and $4 price target for Vince Holding with the company announcing 1QFY25 (April) results before the open on Tuesday.We believe Vince's business model remains fully intact, but material gains have been deferred by the current China export tariff regime; as such, we expect revenue and demand from both the wholesale and owned stores to be solid, while we also expect, as the company slowly shifts the supply chain to lower tariff countries, for near-term margins to remain under material pressure.The key will be what the potential/ business model is going forward.

VNCE: 1Q Preview: Living in a 30% China Tariff World; Reiterate Buy, $4 PT

<ul><li>We are reiterating our Buy rating, projections and $4 price target for Vince after visiting stores in Connecticut, Long Island and New Jersey.</li><li>With over 60% of Vince's cost of goods sold represented by China exports, and a material reduction not in play until the Pre-Spring (Winter) 2025 collection, we are in a somewhat in-between period where the company has both pre and post-tariff goods (and potentially some with 100%+ tariffs and the new 30% rate).</li><li>As such, Vince must balance consumer demand for newness and continued fashion excitement with the potential for material price increases or limiting the level of overall offerings until they can diversify the supply chain.</li></ul>

We are reiterating our Buy rating, projections and $4 price target for Vince after visiting stores in Connecticut, Long Island and New Jersey.With over 60% of Vince's cost of goods sold represented by China exports, and a material reduction not in play until the Pre-Spring (Winter) 2025 collection, we are in a somewhat in-between period where the company has both pre and post-tariff goods (and potentially some with 100%+ tariffs and the new 30% rate).As such, Vince must balance consumer demand for newness and continued fashion excitement with the potential for material price increases or limiting the level of overall offerings until they can diversify the supply chain.

VNCE: Snapping the Store: Navigating Tariff Driven Summer Waters; Reiterate Buy, $4 PT

United States

Ralph Lauren Corporation designs, markets, and distributes men's, women's and children's apparel, accessories, fragrances, and home furnishings. The Company's products are sold under a wide range of brands. Ralph Lauren's operations include wholesale, retail, and licensing.

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Ralph Lauren (RL 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

VNCE: Snapping the Store: Flows, Fashion Return to Normal; Reiterate Buy, $4 PT

We are reiterating our Buy rating, $4 price target and projections for Vince Holding after visiting stores in Connecticut, Long Island and New...

Small Cap Consumer Research

VNCE: 1Q Review: Moving Quickly to Keep on Winning; Reiterate Buy, $4 PT

We are reiterating our Buy rating and $4 price target on Vince Holding Corp. and increasing our FY25 EPS projections after the company registered...

Small Cap Consumer Research

VNCE: 1Q Preview: Living in a 30% China Tariff World; Reiterate Buy, $4 PT

We are reiterating our Buy rating, projections and $4 price target for Vince Holding with the company announcing 1QFY25 (April) results before the...

Small Cap Consumer Research

VNCE: Snapping the Store: Navigating Tariff Driven Summer Waters; Reiterate Buy, $4 PT

We are reiterating our Buy rating, projections and $4 price target for Vince after visiting stores in Connecticut, Long Island and New...

Small Cap Consumer Research

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