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This higher operating margin channel has sustained strong double digit growth for years at BBW and recently turned meaningfully positive at VS, having now lapped the exit of swimwear and apparel. Further, management discussed meaningful investments in the VS “core technology platform” on the 4Q17 earnings call, and while details were sparse, we are encouraged to see capital being allocated to this higher return channel; 2) Continued mid single digit growth at BBW. White barn remodels and other initiatives have heretofore contributed nicely to comps (25% increase in same store sales from these investments have been noted in the past); 3) China.

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bikini swimsuit Why is WMAR mispriced? The Company’s price partially reflects general retailers which have been out of favor recently; however, in reality, the Company falls into the two retail categories that have been viewed favorably through this time, niche retailers and (to a lesser extent) luxury retailers (Cabela’s (NYSE:CAB) swimsuits, Big 5 (NASDAQ:BGFV) and Hibbett Sports (NASDAQ:HIBB) trading at 19.2x, 9.9x and 7.25x, respectively swimsuits, versus West Marine at 4.6x). Additionally, the Company is sitting on a material cash balance ($93M) swimsuits, and while management has not indicated plans to return this cash to shareholders, it is tough to think of an accretive target to use it on and a return to shareholders in the form of a buyback or dividend would represent value upside (currently holding $3.77 per share in cash at a share price of $9.26). Furthermore and to a lesser degree, the Company does not disclose store level information and on the outside seems slightly resistant to forfeit revenue growth for margin (number of stores has decline but newer stores are larger, total square footage has declined much less materially than total store count). bikini swimsuit

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Women’s Swimwear According to the company’s most recent quarterly report, it is facing a lawsuit in Multnomah County Circuit Court in Oregon for the alleged creation of a public nuisance for the marketing, manufacturing and promotion of opioids. The plaintiff is seeking economic damages. In July 2017, it received a subpoena from the Department of Justice pursuant to its marketing of opioids. Women’s Swimwear

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