Trade Insider
by trader on April 13, 2017

Performance Sports Group Ltd (NYSE:PSG) said it faced an investigation by the U.S. Securities and Exchange Commission

Performance Sports Group Ltd (NYSE:PSG) said it faced an investigation by the U.S. Securities and Exchange Commission, two days after the sports equipment maker said it was conducting an internal probe into its financials.

The company, formerly known as Bauer Performance Sports, is also subject to regulatory inquiries in Canada, besides the SEC investigation, it said in a filing. Performance Sports Group spokesman Steven Jones declined to comment beyond the filing. The company’s U.S.-listed and Toronto-listed shares fell about 14 percent in morning trading.

Performance Sports Group lost more than half of its market value on Monday after the company said it could default on its debt due to a delay in filing its annual report as a result of its internal investigation. The annual report was due Monday.

The company in June slashed its full-year earnings forecast, citing a significant downturn in the baseball and softball markets, mainly due to the bankruptcies of Sports Authority Holdings Inc and online retailer Team Express.

Performance Sports Group said at the time that it had reduced shipments to customers who were not settling payments and anticipated its bad debt reserves would be higher than expected when finalized during the audit of its annual filing.

The company said in July that it would restructure its baseball/softball business and two weeks back announced an organization-wide restructuring, aimed at lowering costs and reducing its workforce by about 15 percent.

Performance Sports Equity Analysis

Performance Sports Group Ltd (NYSE:PSG) opened trading today as $2.53 and is trading in the range of 1.86-2.69 today. Performance Sports’ current market cap stands at $115.28 Million.

Performance Sports is currently covered by 6 Wall Street analysts. The mean target price is $8.09 according to First Call. This presents a solid upside to the current price of the equity. The Mean Recommendation sits at 2.8 which is based on 1 Buy and 5 Hold ratings.

The most recent analyst actions consisted of DA Davidson downgrading the stock on August 16th.

The current quarter EPS revenue estimates of 132.93M. Sales are expected to drop at a 9.90 % rate. Performance Sports reported actual earnings last quarter of -0.32 which fails to beat the -0.29 consensus estimate, a -10.30% surprise.

Corporate Profile

Performance Sports Group Ltd. is engaged in the design, manufacture and distribution of performance sports equipment for ice hockey, roller hockey, baseball and softball, lacrosse, as well as related apparel and accessories, including soccer apparel. The Company’s segments include Hockey, Baseball/Softball and Other Sports. The Hockey segment includes the Bauer and Mission brands. The Baseball/Softball segment includes the Easton and Combat brands. Its Other Sports includes the Lacrosse and Soccer operating segments, which includes the Maverik and Cascade brands for Lacrosse, and the Inaria brand for Soccer. The ice hockey products include skates, helmets, protective gear, sticks, team apparel and accessories. The roller hockey products include skates, helmets, protective gear, sticks and accessories. The baseball and softball products include bats, gloves, helmets, protective gear, apparel and accessories. The lacrosse products include sticks, helmets, protective gear and apparel.

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