While Claire's Stores
Overall, Claire's turned in a solid quarter and continues to maintain a very solid balance sheet. Claire's, a company that has been flush with cash for quite some time, reported that the company now has an additional $3 million in the bank. Share buybacks and a possible acquisition are valid options for Claire's cash, but my personal hope as a membrer of Mathew Emmert's Motley FoolIncome Investor team is that Claire's will augment its regular dividend with a special one-time cash dividend.
Claire's also has maintained its excellent inventory management, with balances up less than 5% in the past year on strong sales gains.
While Claire's turned in solid numbers, investors may have been a bit spooked that the company's planned rollout for new stores would be slower than expected -- and that it would be closing additional stores, particularly in locations where it had multiple stores in one mall. On the bright side, Claire's continues to translate operational improvements from North America to Europe. The results are solid and same-store sales continue to be strong overall in Europe.
Claire's does face competition from Too
My biggest hangup with Claire's remains the company's dual-share structure, which effectively keeps outside shareholders at the mercy of the founding family. I understand the argument for family keeping control of a business, but the history of abuse in dual-share structures -- and common shareholders getting less than a fair deal -- is simply too common to ignore. So, while I'm tempted to dip my toe in the water and pick up some Claire's shares, I'll need to make the time to read all of its available previously filed proxy statements first.
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