Did you love the '80s? Feel nostalgic for the colorful commercials of Benetton Group (NYSE:BNG)? Tomorrow's your chance to travel back in time -- at least part of the way -- as Benetton revisits the fiscal year that was.

What analysts say:

  • Buy, sell, or waffle? Opinion on this one is nearly as split as split can be. Out of 10 analysts following the company, three rate it a buy, three a sell, and four a hold.
  • Revenues. Unfortunately, they seem to all be foreign analysts. Here in the U.S., no one has made any sales expectations public.
  • Earnings. It's a similar story on earnings, for which no quarterly expectations are available. However, one stateside analyst does predict that the company will report earning $1.41 per share for full-year 2005.

What management says:
Earlier this month, Benetton released a preliminary report on its achievements in fiscal 2005. The company put sales at $2.1 billion for the year, about a 4% improvement over fiscal 2004. Profits were estimated at 6.3% of this sum, or about $134 million.

The company noted "progress" in the second half of 2005 and made optimistic noises about 2006, citing growth in both the volume of goods sold and in the proportion of high-priced to low-priced goods. That said, after all the good news, Benetton predicted that its 2006 sales would "at least equal" its 2005 performance, and that net income would be about 6.5% of sales.

What management does:

Margins

6/04

9/04

12/04

3/05

6/05

9/05

Gross

48.1%

43.3%

25.3%

44.6%

23.9%

22.6%

Op.

12.3%

13.1%

13.1%

12.3%

12.4%

11.8%

Net

8.0%

8.3%

6.1%

7.0%

5.9%

5.2%



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:
So what we're looking for in fiscal 2006 is this: "At least" 4% sales growth, which is, to say the least, an unambitious target (about $2.2 billion). And net margins of 6.5% on that sum, or about $144 million. That's a little better, because it would equal 7% year-over-year growth.

Such results would be a big improvement over what Benetton's been doing recently, with its net margins stuck in the 5% range. To improve, though, Benetton is going to need to hold the line on prices. The company has said that its "more aggressive sales policy" has been partly to blame for hurting margins in recent quarters.

Competitors:

  • Gap (NYSE:GPS)
  • Liz Claiborne (NYSE:LIZ)

Gap is a recommendation in both Motley Fool Inside Value and Stock Advisor. The Fool offers a newsletter for just about every investing style.

Fool contributor Rich Smith has no interest, short or long, in any company named above.