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Strategies & Market Trends : Can you beat 50% per month? -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (7580)	1/25/2005 9:37:04 AM
From: Smiling Bob	Read Replies (1) \| Respond to of 19256

KSS - 46.29 bid - Nat changed his mind? More room down either way Kohl's Space Getting More Cramped By Nat Worden TheStreet.com Staff Reporter 1/14/2005 11:17 AM EST Kohl's (KSS:NYSE - commentary - research) was in focus Friday after several analysts weighed in on different sides of an ongoing debate about the apparel retailer's prospects for 2005 in a crowded field. Shares of off-mall, middle-market Kohl's were recently down 50 cents, or 1%, to $47.40 after J.P. Morgan analyst Shari Schwartzman Eberts downgraded the stock to underweight, saying in a research note that the company's earnings, while in line with estimates for 2004, will likely come in well below consensus estimates in the new year. Ebert forecasts earnings for the retailer of $2.38 a share for 2005, well below Thomson First Call's consensus estimate of $2.54. She expects same-store sales -- stores open at least a year -- to be up 1% to 3% with little to no gross margin expansion. Also, she said its costs will likely rise in line with its real estate growth, up around 15%. "Competition in the moderate apparel space has also intensified," Eberts said. (She does not own a position in shares of Kohl's, but her firm does have a banking relationship with the company.) "J.C. Penney's (JCP:NYSE - commentary - research) gradual expansion off-the-mall will likely pose additional challenges for Kohl's over time, while an off-the-mall Sears (S:NYSE - commentary - research) would also hurt; improved apparel at Wal-Mart (WMT:NYSE - commentary - research) could also steal share over time." On Monday, Moody's Investor Services predicted that Wal-Mart, the world's largest retailer, was in the process of setting its sights on the apparel segment the same way it set out to dominate the grocery business. "Wal-Mart's growth in apparel could lead to a shakeout in that sector that eclipses by a wide margin the one in groceries when Wal-Mart's expanded in that area," wrote Charles O'Shea, Moody's senior analyst, in a research report. In groceries, Wal-Mart has doubled its market share in the last three years to reach sales of $100 billion this year. Its success shook up the traditional food-selling sector, where grocery store chains across the country suffered large sales declines and heated labor disputes as they tried to compete with Wal-Mart's low-cost business model and supply-chain advantages.