Hedgefund News Wrap: Week Ending 03/04/2016

SPORTS AUTHORITY IS LOSING AUTHORITY 

(CNN Money) – Another week passes and another mega-retailer crashes. Sports Authority filed for Chapter 11 bankruptcy on Wednesday, as it plans to close or sell about 140 of its 463 stores.

The Englewood, Colorado based company has cited $1.1 billion in debt and put the blame on not keeping with up customer trends. About one-third of the retailer’s locations will begin liquidation sales within days, including 25 stores in Texas, 19 in California, 18 in Florida and 11 in Illinois.

“Sales are expected to last for several weeks – the duration will most likely vary at different stores,” Sports Authority spokesman Steven Goldberg said in an email.

Read the entire article at CNN Money
More coverage: Chicago Tribune and USA Today

HERBALIFE MISREPORTS – STOCK TANKS

(Bloomberg Business) – To put it simply, Herbalife lied about its report card and was caught red-handed by its mother. The nutritional-products company stated that it had misreported “active new member” figures with the U.S. Securities and Exchange Commission filing.

On a call on February 25 a whopping 16.7 percent was cited as the number of active new members increased, but in reality only 3.2 percent increased worldwide. In the U.S., active numbers increased 30.7 percent, not the 71 percent mentioned on that same call. Are we seeing a pattern here?herbalife

According to the Cayman Islands based company, “database scripting errors” and “quarterly aggregation issues” are to blame.

Herbalife was on a hot streak, rising 85 percent over the past year until this news was released, in which the shares fell 7.2 percent in Thursday morning trading.

Read the entire article at Bloomberg Business
More coverage: The Wall Street Journal and USA Today

SHOOT ‘EM UP! 

(The Wall Street Journal) – Gun sales are hot, hot, hot and Smith & Wesson Holding Corp (NASDAQ: SWHC) is cashing in. Over the past year shares of the company have jumped 93 percent and were up 6.3 percent to $27 after hours on Thursday after displaying better-than-expected results. The presidential debates are sparking interests over gun laws and that uncertainty has customers rushing to stock up.

In the latest quarter the firearm manufacturer reported a profit of $31.4 million, or 56 cents a share, up from $8.1 million, or 15 cents a share, a year earlier.

For the current quarter, SWHC expect sales to be between $210 and $215 million with adjusted earnings in the range of 51-53 cents a share, compared with analysts’ expectations of $195 million in revenue and 47 cents in adjusted profit.

CEO James Debney said in the release, “During the third quarter, the Adjusted National Instant Criminal Background Check System (NICS) data, which serves as an indicator of consumer purchases, reported a significant increase in growth versus the prior year, especially in handguns. In addition, our product sell-through at distribution was much stronger than we had anticipated.”

Read the entire article at The Wall Street Journal
More coverage: Business Insider and Financial Market News