StockStory Flags Growth and Cash-Flow Risks at Three Retailers

StockStory named Tapestry, Carter’s and Bark as consumer stocks it views cautiously, citing sales and cash-flow concerns. The publisher said consumer discretionary stocks had fallen 1% over six months, compared with a 16.3% gain for the S&P 500.

For Tapestry, StockStory pointed to weak constant-currency growth over the past two years and declining returns on capital. It also expects the company’s free cash flow margin to shrink by 3.2 percentage points in the coming year.

StockStory said Carter’s same-store sales have lagged over the past two years. It expects the company’s free cash flow margin to drop by 1.3 percentage points over the next year.

Bark’s sales fell by an average of 2.5% annually over the past five years, according to the article. StockStory also raised concerns about the company’s cash use and said depleted reserves could lead to fundraising that dilutes shareholders.

As of Friday afternoon, Tapestry traded at $117.12, down 1.78% since the previous close. Carter’s was at $31.36, down 1.12%, while Bark traded at $8.59, up 0.82%.