Liz Claiborne shares soar on analyst's forecast
Claiborne's shares soar after analyst says overhaul, leaner inventories leading to recovery
On Monday May 4, 2009, 3:47 pm EDT
Buzz up! Print Related:Jones Apparel Group, Inc., Liz Claiborne Inc.
NEW YORK (AP) -- Liz Claiborne Inc. shares soared Monday after a Goldman Sachs retail analyst upgraded them to a "buy" rating and raised his target price, saying a significant recovery is at hand, fueled by leaner inventories, debt reduction and the overhaul of its namesake brand.
Related Quotes
Symbol Price Change
JNY 9.47 0.00
LIZ 6.30 0.00
{"s" : "jny,liz","k" : "c10,l10,p20,t10","o" : "","j" : ""} Goldman Sachs retail analyst Benjamin H. Rowbotham wrote Monday that, "after a tough 2008, we believe fundamental change is afoot." He predicted the company's first-quarter results, to be released later this month, will serve as a "a positive inflection point" -- the trough in deterioration of the company's earnings before interest, taxes, depreciation and amortization.
"We see this as the last 'incrementally bad' fundamental quarter," Rowbotham said. He expects a loss of 25 cents per share in the first quarter, matching Wall Street estimates.
Liz Claiborne shares rose $1.46, or 30.4 percent, to $6.26 during trading Monday afternoon. Over the past 52 weeks, they have traded at $1.46 to $20.14.
Rowbotham noted that recent data suggest that inventory declines at department store and apparel suppliers have finally begun to translate into profit. He noted that J.C. Penney, Jones Apparel Group Inc. and children's clothing maker Carter's Inc. have either raised their profit outlook or posted results that beat Wall Street estimates.
He expects New York-based Liz Claiborne to follow this trend over the medium term because of its cost-cutting efforts.
Executives forecast that Claiborne's selling, general and administrative expenses will fall 12 percent this year to $1.6 billion.
Rowbotham noted that the company's relaunch of its namesake label, with goods designed by Isaac Mizrahi, is off to a strong start. While the label accounts for only 17 percent of the company's consolidated revenue, it made up for almost half of its partnered brands division, which includes such labels as its licensed DKNY jeans and Dana Buchman clothing line.
As a result, Goldman Sachs is raising its earnings forecast for fiscal 2009 to profit of 15 cents, up from a loss of 23 cents, and it's increasing its earnings-per-share estimate for Liz Claiborne to 45 cents from breaking even.
Analysts surveyed by Thomson Reuters on average forecast earnings of 7 cents per share for the current fiscal year, and profit of 27 cents for 2010.
Rowbotham expects positive same-store sales comparisons in 2010, which assumes an improving economy. Same-store sales, or sales at stores that have been open at least a year, is considered a key indicator of a retailer's health.
Rowbotham raised his price target for Liz Claiborne shares to $7.20 from $3.30 in the next 12 months
Claiborne's shares soar after analyst says overhaul, leaner inventories leading to recovery
On Monday May 4, 2009, 3:47 pm EDT
Buzz up! Print Related:Jones Apparel Group, Inc., Liz Claiborne Inc.
NEW YORK (AP) -- Liz Claiborne Inc. shares soared Monday after a Goldman Sachs retail analyst upgraded them to a "buy" rating and raised his target price, saying a significant recovery is at hand, fueled by leaner inventories, debt reduction and the overhaul of its namesake brand.
Related Quotes
Symbol Price Change
JNY 9.47 0.00
LIZ 6.30 0.00
{"s" : "jny,liz","k" : "c10,l10,p20,t10","o" : "","j" : ""} Goldman Sachs retail analyst Benjamin H. Rowbotham wrote Monday that, "after a tough 2008, we believe fundamental change is afoot." He predicted the company's first-quarter results, to be released later this month, will serve as a "a positive inflection point" -- the trough in deterioration of the company's earnings before interest, taxes, depreciation and amortization.
"We see this as the last 'incrementally bad' fundamental quarter," Rowbotham said. He expects a loss of 25 cents per share in the first quarter, matching Wall Street estimates.
Liz Claiborne shares rose $1.46, or 30.4 percent, to $6.26 during trading Monday afternoon. Over the past 52 weeks, they have traded at $1.46 to $20.14.
Rowbotham noted that recent data suggest that inventory declines at department store and apparel suppliers have finally begun to translate into profit. He noted that J.C. Penney, Jones Apparel Group Inc. and children's clothing maker Carter's Inc. have either raised their profit outlook or posted results that beat Wall Street estimates.
He expects New York-based Liz Claiborne to follow this trend over the medium term because of its cost-cutting efforts.
Executives forecast that Claiborne's selling, general and administrative expenses will fall 12 percent this year to $1.6 billion.
Rowbotham noted that the company's relaunch of its namesake label, with goods designed by Isaac Mizrahi, is off to a strong start. While the label accounts for only 17 percent of the company's consolidated revenue, it made up for almost half of its partnered brands division, which includes such labels as its licensed DKNY jeans and Dana Buchman clothing line.
As a result, Goldman Sachs is raising its earnings forecast for fiscal 2009 to profit of 15 cents, up from a loss of 23 cents, and it's increasing its earnings-per-share estimate for Liz Claiborne to 45 cents from breaking even.
Analysts surveyed by Thomson Reuters on average forecast earnings of 7 cents per share for the current fiscal year, and profit of 27 cents for 2010.
Rowbotham expects positive same-store sales comparisons in 2010, which assumes an improving economy. Same-store sales, or sales at stores that have been open at least a year, is considered a key indicator of a retailer's health.
Rowbotham raised his price target for Liz Claiborne shares to $7.20 from $3.30 in the next 12 months
5/5 2009 19:58 le 0
10058 U.S. retailers likely regained strength in April
On Tuesday May 5, 2009, 12:26 am EDT
Buzz up! Print Related:Aeropostale Inc., Big Lots Inc., Buckle Inc.
By Martinne Geller
Related Quotes
Symbol Price Change
ARO 35.50 0.00
BIG 28.35 0.00
BKE 38.47 0.00
JCP 32.59 0.00
KSS 43.77 0.00
{"s" : "aro,big,bke,jcp,kss","k" : "c10,l10,p20,t10","o" : "","j" : ""} NEW YORK
(Reuters) - Warmer weather and a later Easter likely spurred many U.S. consumers
to shop in April, and may lead retailers to post only a very modest decline in
monthly sales later this week.
The results will likely provide more fodder for optimists who see signs that
retail's darkest days are behind. Yet they could be clouded by the outbreak of
the H1N1 flu, which might have kept some shoppers away from crowded malls toward
the end of the month.
"It's not very good news, because (trends) are still negative, but it's
definitely a sign of improvement," said Jharonne Martis, senior research analyst
with Thomson Reuters, of the expected April figures.
Analysts expect April sales at stores open at least a year to decline 0.3
percent, according to Thomson Reuters data. Excluding Wal-Mart Stores Inc
(NYSE:WMT - News), which has an outsized impact on the sector, sales are
expected to fall 3.3 percent.
Martis said those declines are smaller than those retailers posted from October
through January.
Positive data points in recent weeks have boosted stocks on rising optimism that
the U.S. economy may be on a path to recovery, helped by a huge government
stimulus package and the Federal Reserve's efforts to prop up the banking
sector.
U.S. consumer confidence, as measured by the Reuters/University of Michigan
survey of consumers, climbed to 65.1 in April from 57.3 in March, reaching its
highest level since September. Meanwhile, a closely watched index of
manufacturing activity also jumped in April.
The Standard & Poor's Retail Index (Chicago Options:^RLX - News) jumped more
than 15 percent in April, outpacing a 9.4 percent rise for the wider S&P 500
Index (^SPX - News).
Despite signs of life, Martis said the month's likely winners would continue to
be those that deliver a sense of value, such as Wal-Mart among discounters,
Kohl's Corp (NYSE:KSS - News) among department stores, TJX Cos Inc (NYSE:TJX -
News) and Ross Stores Inc (NasdaqGS:ROST - News) among clothing chains and
Buckle Inc (NYSE:BKE - News) and Aeropostale Inc (NYSE:ARO - News) among the
teen apparel retailers.
WARMING UP THE WALLET
Retailers are expected to post April results that are better than results in
March, helped by warmer weather and the Easter holiday, which occurred in April
this year versus March last year.
Drugstore operator Walgreen Co (NYSE:WAG - News) posted a 5.7 percent rise in
April sales, blowing past analysts' estimate for a 3.2 percent gain, as the
Easter holiday boosted demand for candy and other holiday-related goods. It also
reported increased demand for items that could help keep flu at bay, such as
hand sanitizers and soaps (ID:nN29450389).
Oppenheimer analyst Robert Samuels said Easter buoyed apparel sales since many
spring breaks from school were timed with the holiday, leading to greater store
traffic. He added that April's warmer weather boosted sales of spring and summer
merchandise that was slow-moving during the cooler March.
"All in, we think April likely comes in ahead of expectations for most of our
names," Samuels said. "The March + April period, how we prefer to analyze the
two months, is likely to show a continued improvement from the January and
February periods."
March same-store sales fell 1.8 percent, according to Thomson Reuters data.
Excluding Wal-Mart, March sales fell 5 percent.
Wal-Mart said last week it was seeing U.S. customers spend more on discretionary
items like sporting goods and bedding, as payroll taxes and gasoline prices come
down.
J.P. Morgan analyst Charles Grom said other chains, such as J.C. Penney Co Inc
(NYSE:JCP - News) and Big Lots Inc (NYSE:BIG - News), were also seeing strength
in the highly discretionary home category.
"We believe the U.S. consumer is regaining confidence and with the falling
food/energy prices a continued tailwind, we think real consumer spending is
close to bottoming," Grom said.
On Tuesday May 5, 2009, 12:26 am EDT
Buzz up! Print Related:Aeropostale Inc., Big Lots Inc., Buckle Inc.
By Martinne Geller
Related Quotes
Symbol Price Change
ARO 35.50 0.00
BIG 28.35 0.00
BKE 38.47 0.00
JCP 32.59 0.00
KSS 43.77 0.00
{"s" : "aro,big,bke,jcp,kss","k" : "c10,l10,p20,t10","o" : "","j" : ""} NEW YORK
(Reuters) - Warmer weather and a later Easter likely spurred many U.S. consumers
to shop in April, and may lead retailers to post only a very modest decline in
monthly sales later this week.
The results will likely provide more fodder for optimists who see signs that
retail's darkest days are behind. Yet they could be clouded by the outbreak of
the H1N1 flu, which might have kept some shoppers away from crowded malls toward
the end of the month.
"It's not very good news, because (trends) are still negative, but it's
definitely a sign of improvement," said Jharonne Martis, senior research analyst
with Thomson Reuters, of the expected April figures.
Analysts expect April sales at stores open at least a year to decline 0.3
percent, according to Thomson Reuters data. Excluding Wal-Mart Stores Inc
(NYSE:WMT - News), which has an outsized impact on the sector, sales are
expected to fall 3.3 percent.
Martis said those declines are smaller than those retailers posted from October
through January.
Positive data points in recent weeks have boosted stocks on rising optimism that
the U.S. economy may be on a path to recovery, helped by a huge government
stimulus package and the Federal Reserve's efforts to prop up the banking
sector.
U.S. consumer confidence, as measured by the Reuters/University of Michigan
survey of consumers, climbed to 65.1 in April from 57.3 in March, reaching its
highest level since September. Meanwhile, a closely watched index of
manufacturing activity also jumped in April.
The Standard & Poor's Retail Index (Chicago Options:^RLX - News) jumped more
than 15 percent in April, outpacing a 9.4 percent rise for the wider S&P 500
Index (^SPX - News).
Despite signs of life, Martis said the month's likely winners would continue to
be those that deliver a sense of value, such as Wal-Mart among discounters,
Kohl's Corp (NYSE:KSS - News) among department stores, TJX Cos Inc (NYSE:TJX -
News) and Ross Stores Inc (NasdaqGS:ROST - News) among clothing chains and
Buckle Inc (NYSE:BKE - News) and Aeropostale Inc (NYSE:ARO - News) among the
teen apparel retailers.
WARMING UP THE WALLET
Retailers are expected to post April results that are better than results in
March, helped by warmer weather and the Easter holiday, which occurred in April
this year versus March last year.
Drugstore operator Walgreen Co (NYSE:WAG - News) posted a 5.7 percent rise in
April sales, blowing past analysts' estimate for a 3.2 percent gain, as the
Easter holiday boosted demand for candy and other holiday-related goods. It also
reported increased demand for items that could help keep flu at bay, such as
hand sanitizers and soaps (ID:nN29450389).
Oppenheimer analyst Robert Samuels said Easter buoyed apparel sales since many
spring breaks from school were timed with the holiday, leading to greater store
traffic. He added that April's warmer weather boosted sales of spring and summer
merchandise that was slow-moving during the cooler March.
"All in, we think April likely comes in ahead of expectations for most of our
names," Samuels said. "The March + April period, how we prefer to analyze the
two months, is likely to show a continued improvement from the January and
February periods."
March same-store sales fell 1.8 percent, according to Thomson Reuters data.
Excluding Wal-Mart, March sales fell 5 percent.
Wal-Mart said last week it was seeing U.S. customers spend more on discretionary
items like sporting goods and bedding, as payroll taxes and gasoline prices come
down.
J.P. Morgan analyst Charles Grom said other chains, such as J.C. Penney Co Inc
(NYSE:JCP - News) and Big Lots Inc (NYSE:BIG - News), were also seeing strength
in the highly discretionary home category.
"We believe the U.S. consumer is regaining confidence and with the falling
food/energy prices a continued tailwind, we think real consumer spending is
close to bottoming," Grom said.
