Lakeland Industries (LAKE) Misses As Deals Delayed Due To ERP Implementation, Reit Buy - Roth

Roth Capital analyst Dave King reiterated a Buy rating and $15.00 price target on Lakeland Industries (NASDAQ: LAKE) after Q1 EPS of ($0.06) missed consensus of $0.03 on higher expenses, lower gross margin, and lower-than-expected revenue following an ERP system implementation last summer. Domestic revenue grew 4% YOY despite shipment delays and order cancellations tied to the implementation. International revenue fell 2% due to currency pressures, the loss of a major Chinese customer that is exiting the market, and a shipment delay to a large Latin America customer. Backlog declined 15% sequentially, but management noted significant
backorders in oil & gas, improving sales traction in Vietnam and India, and outperformance in China relative to the economy as a whole.

The analyst stated "We are leaving our price target unchanged at $15, which still assumes shares should trade at a ~1.5x P/B multiple. Impediments to our price target include increased competition, inability to accurately predict customer preferences, product protection failures, environmental law and regulation violations, continued liabilities from its prior Brazilian subsidiary, foreign currency pressures, reduction or elimination of federal, state, or local funding, and the departure of key members of management".

For an analyst ratings summary and ratings history on Lakeland Industries click here. For more ratings news on Lakeland Industries click here.

Shares of Lakeland Industries closed at $11.91 yesterday.

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