Softlines - Retail/Softlines
January Retail Softlines Mid-Month Sales Preview
We expect our January CSFB Retail Softlines Same-Store Sales Index (to be reported February 8) to be flattish (vs. +6.8% last year) and most likely slightly negative.
Post-Holiday sales are prominent with most retailers offering at least 30-50% of their inventories at discounts up to 70% off.
Most retailers are featuring early Spring floor sets. Overall, we note a general lack of newness, particularly in broad-based casual apparel, but there are pockets of interesting novelty fashion.
We expect the strongest results, up mid-single digits at Children's Place (PLCE, $19.38, Buy), Gadzooks (GADZ, $16.88, Buy), and Hot Topic (HOTT, $23.00, Hold).
We expect the weakest results (negative mid-to-high single digits) at Abercrombie & Fitch (ANF, $25.13, Buy), Intimate Brands (IBI, $16.13, Hold), and Gap (GPS, $29.25, Hold).
We continue to recommend caution on the investment front, as sales and earnings estimates remain vulnerable in this slower economic environment. Better visibility on earnings, lower valuations and more fashion innovation would cause us to get more aggressive on the group. |
