Bebe stores inc

Ticker
$BEBE
Industry
Consumer Products
Type
Post Reorg
Rating
Covered
Category
Core
Target Price
$12.00
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Notes

Segments — brands (operated via several JVs) and rent-to-own franchised stores
  • Brands (I’ll call it the JV Segment) — consists of bebe and Brookstone which are operated by JV partner Bluestar Alliance
  • Buddy’s rent-to-own — competitor to Rent A Center and Aaron’s
Major shareholder B Riley ($RILY) is controlling shareholder here
Intangible amortization — approx $1.5m per year from 2022-2025 for the Buddy’s acquisitions
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Capital allocation — BEBE has paid a significant amount of dividends since B Riley came into the picture — totaling $2.26 per share since mid-2018
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Peer comments — $RCII CEO on 4Q21 trends in the business
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Financials & Valuation

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1Q22 Valuation (Dec2021) — I’m estimating pro-forma earnings at $1 per share for FY22. This combines trailing cash distributions from JV brands of ~$11m, EBITDA from Buddy’s less corporate costs of $4.4m, interest expense of $1.9m, and capex at $0.3m = $13m or $1 per share. At a 12x multiple, that’s a $12 price target for FY22.

Research Notes

bebe stores ($BEBE) — 2Q22 Update (2/25/2022)
bebe stores ($BEBE) — FY21 Update (10/10/2021)
bebe stores ($BEBE) — 3Q21 Update (5/19/2021)
bebe stores ($BEBE) — 4Q20 Update (3/5/2021)
bebe stores ($BEBE) — FY20 Update (9/8/2020)
bebe stores ($BEBE) — Initiation (12/28/2019)