Brunswick

Malibu Boats, which makes high-performance speed boats, recently gave us a small window into the current state of retail boat sales. Earlier in May the company noted that domestic unit sales are up high single digits and prices up 11%. International sales continue to be dampened by a weak European economy and stronger dollar.

Brunswick, which derives 67% of its revenue from the United States, should benefit from stable domestic demand.

Criteo

We are increasing our price target on Criteo from $64 to $70. Earnings estimates continue to creep up due to the company’s success in delivering productive ad placements for its customers.

This is the second time we’ve increased our target on Criteo since our March 8 recommendation, and despite the stock’s 20% move it still offers investors 55% upside.

We published an alert on Criteo late last month. The stock was down on May 25 due to a story in the Wall Street Journal noting Facebook’s decision to close its FBX ad exchange to third party technology companies.

We immediately checked in with our contact at Criteo who assured us all is well.

This change is no surprise to Criteo, which has known about the shutdown for months and planned its business accordingly. Criteo derives little revenue from this exchange.

Facebook continues to work with Criteo to deliver relevant ads to mobile and Instagram users. Although being an approved partner of Facebook lends great credibility to Criteo, it is not dependent on Facebook for success. Revenue associated with Facebook made up just 6% of net revenue.

Vera Bradley

Vera Bradley reported a good quarter on June 1. Considering the turmoil engulfing retail results we were quite pleased with the numbers. After a rocking start to the year consumers stocks are dropping left and right. Express and Abercrombie were two recent victims. Vera’s stock had already wilted 25% from its April high before the earnings report.

The results support our investment thesis that Vera is pulling in a wave of new customers with its newly designed, more profitable bags.

Revenue of $105 million was $1.5 million less than expected but earnings of $.06 delivered one penny of upside. While the slight revenue miss is disappointing, Vera’s turn-around is predicated on fewer markdowns which might deliver lower revenue but better earnings. In addition the 4% growth in revenue is the highest Vera has seen in at least two years.

Second quarter estimates were lowered by one penny but annual guidance is unchanged at $.90-.98. Vera is making the right moves holding firm on pricing and reducing the frequency of “hyper-sales”. Vera’s stock is now 8% lower than our original recommendation but is still expected to grow earnings 30% plus this year. Our target remains $24, 70% higher than current levels.