Friday, March 19, 2010

La-Z-Boy Shares Are Not Sitting Around

Barron’s

In recent years, investing in living-room furniture makers like La-Z-Boy often resembled the easy chair you never parted with: shopworn and definitely out of fashion.

When the furniture concern reported its fiscal third-quarter results last month, it recorded the first year-over-year sales gain in 18 quarters, says Brian Sozzi, an analyst at Wall Street Strategies.

Link to full article: http://online.barrons.com/article/SB126814305757358587.html?mod=BOL_hpp_highlight

Friday, March 19, 2010

UPDATE 2-Movado sees wider-than-expected Q4 loss; shares fall

Reuters

Movado Group Inc forecast a wider-than-expected fourth-quarter loss as retailers tightened inventory control, sending the watchmaker's shares down 9 percent in trading after the bell.

The company is struggling with retail inventory destocking, and discounting in the industry, Wall Street Strategies analyst Brian Sozzi said by phone.

"Many retailers that carried their line of products are no more in business, and those that are in business, are discounting their products heavily," Sozzi said.

Link to full article: http://in.reuters.com/article/governmentFilingsNews/idINSGE62E0TX20100315

Friday, March 19, 2010

US retail sales show surprise rise in February

Financial Times

US retail sales recorded a surprise rise in February as consumers lifted recovery hopes by braving winter storms to show renewed interest in spending.

But separate consumer sentiment figures suggested that while spending habits might be loosening, the state of the labour market continues to darken spirits.

“What we may be encountering at the moment is the release of pent-up demand from less dire economic conditions and consumer mindsets,” said Brian Sozzi, a retail analyst at Wall Street Strategies.

Link to full article: http://www.ft.com/cms/s/0/113b2db8-2de2-11df-a971-00144feabdc0.html

Friday, March 19, 2010

UPDATE: Quiksilver Up, PacSun Down As Cos Try Turnarounds

The Wall Street Journal

Quiksilver Inc. (ZQK) and Pacific Sunwear of California Inc. (PSUN) shares took divergent paths Friday, highlighting the differences between the two casual-apparel retailers as Quiksilver moves toward a turnaround and Pacific Sunwear struggles to find its identity.

Though the companies sell some similar products, Quiksilver has exposure to the wholesale channel - selling its goods in department stores and even PacSun stores - and has stronger ties to the communities it serves, Wall Street Strategies analyst Brian Sozzi said. The company has strong ties to skateboarders with its DC Shoes brand and sponsors skateboarding and surfing events, as well as sponsoring athletes to wear its products, he said.

Link to full article: http://online.wsj.com/article/BT-CO-20100312-710146.html

Friday, March 19, 2010

Schaeffer's Daily Contrarian

Schaeffer’s Research

On Friday morning last week, Ann Taylor Stores (ANN) reported a profit as "sales showed signs of stabilizing," notes this Barron's article. The shares slipped following the report, and the author believes that there is more downside in the works for ANN, citing valuation and the lack of a blowout quarter.

Given the stock's more than 530% gain during the prior 12 months, ANN now trades at 27.5 times forward earnings, the article states. For comparison, the author notes that Chico's FAS (CHS), Nordstrom Inc. (JWN), and J.Crew Group (JCG) all trade with forward P/E ratios in the mid-teens. What's more, the Street is anticipating that revenue will shrink year-over-year in 2011.

Analysts agree with this dour outlook, with Wedbush Morgan noting that "the company is in the early stages of a comp and margin recovery," making its 530% gain difficult to justify. Furthermore, Wall Street Strategies analyst Brian Sozzi believes that Ann Taylor may have pricing problems when it returns "to full-price business longer-term." Finally, Sozzi also takes issue with ANN's recent run-up, calling it "the richest multiples...within our specialty apparel sector coverage."

Link to full article: http://www.schaeffersresearch.com/commentary/content/ann+taylor+stores+looks+to+shake+loose+stubborn+bears/dailycontrarian.aspx?newsid=98544

Friday, March 19, 2010

UPDATE: Deal Making Heats Up Among Apparel Makers

The Wall Street Journal

Perry Ellis International Inc. (PERY) is also seen in the industry as a potential buyer because of the strength of its balance sheet and brand strength, said Brian Sozzi, an analyst at Wall Street Strategies Inc. In addition, surf-wear maker Quiksilver Inc. (ZQK) has been rumored as a potential target.

Link to full article: http://online.wsj.com/article/BT-CO-20100315-710431.html

Friday, March 19, 2010

Parsing the Fed's Statement

SmartMoney

Stocks rose following the Fed’s announcement that the benchmark interest rate would stay low “for an extended period.” As expected, that key phrase remained unchanged from previous statements, indicating that the central bank is not yet ready to raise the federal?funds?rate from its record low of between 0.00% and 0.25%.

The Fed's statement also indicates a stronger view of the prospects for business investment, with the central bank saying that business spending “has risen significantly.” A pickup in business investment will be a crucial factor in creating sustainable economic growth and real improvement in the job market, Brian Sozzi, an analyst at Wall Street Strategies, wrote in a report this afternoon.

Link to full article: http://www.smartmoney.com/Investing/Economy/Parsing-the-Feds-Statement/

Friday, March 19, 2010

UPDATE: Guess 4Q Profit Surges 81%; Dividend Raised

The Wall Street Journal

Guess--which has historically been conservative with its estimates--expects first-quarter earnings of 46 cents to 48 cents a share on revenue of $495 million to $510 million. Analysts surveyed by Thomson Reuters expected 47 cents a share on revenue of $485 million.

Following the results, Brian S. Sozzi, an analyst at Wall Street Strategies, said the company’s  return to positive U.S. same-store sales beat Wall Street expectations and said profitability improved behind the company’s trendy G by Guess concept.

Link to full article: http://online.wsj.com/article/BT-CO-20100317-714718.html?mod=WSJ_earnings_MIDDLETopHeadlines

Friday, March 19, 2010

J. Crew Bounces Back

Forbes

With retailers across the price spectrum clearing the cobwebs from the recession, J. Crew Group topped The Street's estimates with its latest quarterly figures Tuesday.

“It’s quite depictive of pent-up demand being unleashed, and much in line with the demand trends expressed by the management teams” in quarterly earnings reports, says Brian Sozzi, an analyst with Wall Street Strategies.

Link to full article: http://www.forbes.com/2010/03/09/jcrew-group-retail-markets-equities-earnings-icsc.html?boxes=financechannelforbes

Friday, March 19, 2010

American Eagle May Catch Tailwinds

Barron’s

Shares of American Eagle Outfitters (ticker: AEO) are back in fashion.

On Wednesday morning, the teen-apparel retailer reported that fiscal fourth-quarter profits soared 81% on improved sales and growing margins. The company also said it expected that first-quarter profit would be between 15 and 17 cents, ahead of analysts' midpoint expectations of 15 cents.

A large overhang on the stock, American Eagle's ill-fated Martin+OSA brand, has finally been removed as the company also announced today that it is shuttering these operations. Wall Street Strategies' Brian Sozzi estimates that M&O could have cost the company as much as 15 cents per share in fiscal 2009, so the bounce in the core teen brands dovetails with management's renewed focus on its flagship and Aerie stores.

Link to full article: http://online.barrons.com/article/SB126817601719859011.html?mod=BOL_hpp_highlight

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