Women s retailers could be nearing inflection point
SAN FRANCISCO, Feb. 4, 2008 (Thomson Financial delivered by Newstex) — Women’s specialty retailers, which have experienced flat to declining same-store sales for 10 months, could be nearing an inflection point this summer, an analyst said. If the economic downturn in 2000 to 2001 is any comparison, women’s specialty comps look to again have led us into a recessionary environment, Piper Jaffray (NYSE:PJC) Senior Research Analyst Neely Tamminga wrote in a note to clients Monday.
‘Including our estimates for January’s performance, we are 10 months into a negative-to-flattish same-store sales trends with women’s underperforming teen in seven of the past eight months. We believe this weakness is due in part to women ‘moms’ not wanting to pull back on spending for their teen first; rather, they are willing to pull back on their personal spending in discretionary categories,’ Tamminga wrote.
But the possibility of tax rebates in the spring and an early Easter, as well as new spring fashion trends, could help drive traffic in the spring, she said. ‘Valuation-wise, these stocks are still looking cheap despite the rebound in the S P Retail Index,’ she said. Tamminga said Ann Taylor Stores (NYSE:ANN) Corp. and New York Co. were undervalued and rated the stock of both companies at buy. The S P Retail Index opened at $424.31. The index dropped to $359.63 in early January.
The SPDR S P Retail ETF (XRT) was down 4.1% at $33.30. Among the ETF’s top holdings, J Crew Group Inc. (NYSE:JCG) stock was trading down 5.1% at $44.48, Urban Outfitters Inc. (NASDAQ:URBN) shares fell 4.6% to $27.63, and Gap Inc. (NYSE:GPS) stock dropped 3.1% to $18.74. Ann Taylor shares were down 5.7% at $23.82. Shares of New York Co. were down down 3.9% at $5.47. Brigid Gaffikin Copyright Thomson Financial News Limited 2007. All rights reserved.