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 as we look at key trends for 2HFY25 and beyond.</li><li>We believe, more than any other player in our universe, VNCE has been affected by worries over tariffs; given that the company registered over 60% of their goods from China in FY24, this is not surprising.</li><li>That said, we believe Vince management has done yeoman's work in quickly diversifying the supply chain and focusing on the key longer term drivers of the business, from continued store expansion and upgrades, increasing wholesale penetration, international growth, deepening the focus on men's and adding new categories to the store mix to become even more of a lifestyle brand.</li></ul>

We are reiterating our Buy rating, $4 price target and projections for Vince as we look at key trends for 2HFY25 and beyond.We believe, more than any other player in our universe, VNCE has been affected by worries over tariffs; given that the company registered over 60% of their goods from China in FY24, this is not surprising.That said, we believe Vince management has done yeoman's work in quickly diversifying the supply chain and focusing on the key longer term drivers of the business, from continued store expansion and upgrades, increasing wholesale penetration, international growth, deepening the focus on men's and adding new categories to the store mix to become even more of a lifestyle brand.

VNCE: 2H Signposts: Tariffs Defer the VNCE Growth Story; Reiterate Buy, $4 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 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

aka Brands Holding Corp / Equity Bottom-Up

<ul><li>We are reiterating our Buy rating, projections and $30 price target for A.k.A. Brands after visiting Princess Polly stores in California and the Culture Kings flagship in Las Vegas.</li><li>We believe overall momentum in the brand has remained strong, with continued high demand and the Princess Polly customer quickly snapping up impressive fashion items at full prices.</li><li>The theme for Princess Polly remains expansion, from the opening of the newest store (in Glendale), to adding the potential to display 20%+ more units, increasing the level of newness even further and tying offerings close to their debut on the website.</li></ul>

We are reiterating our Buy rating, projections and $30 price target for A.k.A. Brands after visiting Princess Polly stores in California and the Culture Kings flagship in Las Vegas.We believe overall momentum in the brand has remained strong, with continued high demand and the Princess Polly customer quickly snapping up impressive fashion items at full prices.The theme for Princess Polly remains expansion, from the opening of the newest store (in Glendale), to adding the potential to display 20%+ more units, increasing the level of newness even further and tying offerings close to their debut on the website.

AKA: Snapping the Store: Evolving & Advancing; Reiterate Buy, $30 Price Target

Abercrombie & Fitch Co Cl A / Equity Bottom-Up

<ul><li>We are reiterating our Buy rating, $30 price target and projections for A.K.A. Brands after meeting with management in their San Francisco headquarters.</li><li>We believe the company has continued to make material progress on multiple fronts, from adding new Princess Polly stores (and upgrading the current fleet), increasing the wholesale presence for both Petal & Pup and Princess Polly, leveraging the "test and repeat" model to return Culture Kings to higher margins and top line growth, and shifting the Australian market to top line expansion.</li><li>When combined with the potential for debt refinancing and continued strong online results (helped by new store expansion), we believe there remains top and bottom line upside, and we are reiterating our Buy rating and $30 price target for AKA.</li></ul>

We are reiterating our Buy rating, $30 price target and projections for A.K.A. Brands after meeting with management in their San Francisco headquarters.We believe the company has continued to make material progress on multiple fronts, from adding new Princess Polly stores (and upgrading the current fleet), increasing the wholesale presence for both Petal & Pup and Princess Polly, leveraging the "test and repeat" model to return Culture Kings to higher margins and top line growth, and shifting the Australian market to top line expansion.When combined with the potential for debt refinancing and continued strong online results (helped by new store expansion), we believe there remains top and bottom line upside, and we are reiterating our Buy rating and $30 price target for AKA.

Abercrombie & Fitch Co Cl A - AKA: Remain Bullish After Management Meetings; Reiterate Buy, $30 PT

United States

Urban Outfitters, Inc. operates retail stores and direct response, including a catalog and Web sites.  The Company's Urban Outfitters and Anthropologie retail concepts sell fashion apparel, accessories, and household and gift merchandise. Urban also designs and markets young women's casual wear which it provides to the Company's retail operations and sells to retailers worldwide.

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Urban Outfitters (URBN US)

VNCE: 2H Signposts: Tariffs Defer the VNCE Growth Story; Reiterate Buy, $4 PT

We are reiterating our Buy rating, $4 price target and projections for Vince as we look at key trends for 2HFY25 and beyond. We believe, more than...

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

AKA: Snapping the Store: Evolving & Advancing; Reiterate Buy, $30 Price Target

We are reiterating our Buy rating, projections and $30 price target for A.k.A. Brands after visiting Princess Polly stores in California and the...

Small Cap Consumer Research

Abercrombie & Fitch Co Cl A - AKA: Remain Bullish After Management Meetings; Reiterate Buy, $30 PT

We are reiterating our Buy rating, $30 price target and projections for A.K.A. Brands after meeting with management in their San Francisco...

Small Cap Consumer Research

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