Wedbush Maintains Underperform on bebe stores (BEBE)

Wedbush is out with its report today on bebe stores BEBE, maintaining Underperform. In a note to clients, Wedbush writes, "Despite BTE Q3 comps, we remain concerned with slight sales shortfall, continued traffic declines, and inventories significantly above current sales rate (Q3 inventory/sq. ft. +16% relative to same stores sales down 0.7%). With bloated inventories, we believe gross margin pressure may persist beyond Q3 and lead to downward earnings revisions. Lastly, while investors may be attracted to BEBE's cash position and potential dividends, we believe the company has no current plans for future payouts. As such, we believe discounted valuation (0.6x EV/Sales vs. the 5-year avg. of 1.4x) is warranted and leads us to maintain our UNDERPERFORM rating." Wedbush has a $5.50 PT on BEBE. Shares of BEBE closed Thursday at $6.37.