Y COMMENT
U.S./Retail/Softlines - February Retail Softlines
Expect Comps to Increase +0-2% (vs. +4.7% LY); Spring Is Here!
We expect our February CSFB Retail Softlines Same-Store Sales Index (to be
reported March 8) to increase +0-2% (vs. +4.7% LY).
Spring merchandise collections are now fully presented in stores, with several
of the faster-turning retailers already gearing to move from Spring transition
into Spring I collections. February is mostly uneventful, with sales typically
picking up near the end of the month. Most retailers have noted an inconsistent
level of mall traffic during the first two weeks of the month.
We expect the strongest results, up mid-single digits, at Hot Topic (HOTT, $25
.31, Hold) and Talbots (TLB, $50.69, Hold).
We expect the weakest results (negative mid-single digits) at Gap (GPS, $29.44
, Hold) and Intimate Brands (IBI, $16.89, Hold).
We continue to recommend selectivity on the investment front with a bias
towards stocks with still reasonable valuations, as sales and earnings
estimates remain vulnerable in this slower economic environment. We expect to
gain better visibility on 1Q01 when retailers report year-end results beginning
this week.
Our Buy-rated stocks include Abercrombie & Fitch (ANF, $30.34, Buy), Buckle (
BKE, $20.00, Buy), Children's Place (PLCE, $21.38, Buy), Gadzooks (GADZ, $19.
25, Buy), Pacific Sunwear (PSUN, $34.25, Buy), Whitehall Jewellers (JWL, $8.81
, Buy), and Yankee Candle (YCC, $13.30, Buy).
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