Footwear retailer Bakers Footwear (NASDAQ:BKRS) is still hoping to lace up a quarter of positive sales and earnings trends. After five straight quarters of stumbles, it may be too soon to expect that tomorrow's second-quarter results will reveal growing same-store sales or improved profitability. Still, any glimmer of hope could help the shares from reaching further all-time lows.

What analysts say:

  • Buy, sell, or waffle? Six analysts currently follow Bakers; one is bullish on the stock, four are on the fence with hold ratings, and one recommends you sell. The Motley Fool CAPS community has yet to provide an overall rating on the stock; you can be one of the first by heading here.
  • Revenue. Analysts are projecting $42.2 million in second-quarter sales, or almost 11% less than last year's sales amount.
  • Earnings. Analysts expect a quarterly earnings loss of $0.34 per share; last year also resulted in a bottom-line loss of $0.16 per share.

What management says:
Besides the quarterly earnings announcements, news flow at Bakers is sparse; I can't find an investor-relations link on the corporate website. In regard to recent dismal trends, management mentioned during its more recent earnings release that a "lack of enthusiasm for our fashion footwear by our core customers and an unfavorable response to our spring assortments across our key fashion categories affected our sales and also affected our gross margins."

What management does:
An inability to find the right merchandise mix is also hitting the bottom line, which has shown scant profitability in recent years. On an annual basis, operating cash flow has actually been coming in positive, but sizable spending for new store openings and other capex means that management must continually hit the capital markets for outside liquidity.

Margin

01/06

04/06

07/06

10/06

01/07

04/07

Gross

33.5%

33.2%

32.1%

31.7%

30.4%

30%

Operating

5.7%

4.6%

2.8%

1.6%

(0.6%)

(1.8%)

Net*

3.4%

2.7%

1.5%

0.8%

(0.8%)

(1.6%)
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Bakers has issued stock to shore up its balance sheet at least a couple of times in recent years. More recently, it announced a private placement to raise $4 million by issuing convertible debt. Given these shareholder-unfriendly developments, I think the negatives here far outweigh any potential for sales and earnings to eventually improve. Management is steadily destroying shareholder value, and I don't see the company turning investor-friendly anytime soon.

In Bakers' defense, other shoe retailers are floundering. Finish Line (NASDAQ:FINL) is struggling to acquire rival Genesco (NYSE:GCO), while Foot Locker (NYSE:FL) is getting run over on a number of levels. Unfortunately for Bakers, it's constantly underperforming even this embattled peer group.

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