JOAN - Joann Inc. downgraded at Loop Capital amid elevated inventory executive uncertainty

Joann Inc. ( NASDAQ: JOAN ) shares were jolted on Wednesday as Loop Capital analyst Laura Champine advised clients of elevated risks balancing out potential reward for the stock.

She explained that higher expenses, elevated inventory levels, and the unexpected death of a long-tenured executive have come together to raise risks for the retailer. These issues add to sales trends that not only misses estimates for the most recently-reported quarter, but are anticipated to be worsening into the current quarter.

“We were disheartened to hear of CFO Matt Susz’s unexpected death two weeks ago, and we think this adds risk to Joann’s near-term execution and investor-facing communications,” Champine wrote.

She advised that investors should not underestimate his importance to the firm in recent years, not should they ignore the interim addition.

“Matt Susz was a long-tenured executive at the company and handled many investor-facing events for the company in the lead-up to and following the IPO,” Champine explained. “Leonard Green is sending mixed signals, selling stock earlier in the month and adding a board member this week. We think the sidelines is the safest position for us now on Joann ( JOAN ).”

Champine updated sales and EPS estimates for the full year, reducing the former by $120M to hit a level $80M below consensus, and slashing the latter to $0.41, about half the consensus. As such, she lowered her price target to $8 and downgraded the stock to “Neutral”.

Shares of the Ohio-based retailer fell about 1% in Wednesday’s premarket trading.

Read more on the company’s recent earnings-driven crash .

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