7 Retails Stocks In Focus After September Sales Data Released

Wedbush said in a research note released Friday it believes trends improved modestly versus August due to strength over the Labor Day weekend.

Reviewing the September sales data of soft-line retailers, analyst Morry Brown noted that L Brands Inc LB reported results mostly above the consensus estimates, Zumiez Inc. ZUMZ reported strong upside and Gap Inc GPS was in line, but Buckle Inc BKE reported below-consensus same-store sales.

Move Away From Embellishment-Heavy Items To Pressure Buckle

Analyst noted that September comps fell 15.5 percent, worse than the consensus estimate of a 11 percent drop. Women's comps have been down in double-digits for the eleventh straight month, and men's and footwear sales also fell, with sales as well as price points declining.

The analyst believes the company will be pressured both on top and bottom line by a shift away from embellishment-heavy items and towards simple styles. Accordingly, the analyst lowered his 2016, 2017 and 2018 earnings estimate for the company and the price target by $1 to $20.

Related Link: Retailers Give September Sales Updates

Negative Fishkill Fire Doused By Bright Old Navy

Wedbush noted that Gap reported in line same store sales of a negative 3 percent. However, excluding Fishkill fire, same-store sales were up 400 basis points sequentially. Even as Gap and Banana Republic witnessed comp declines, Old Navy results remained strong.

The firm raised its earnings per share estimates for 2016, 2017 and 2018 modestly but maintained its price target at $25.

L Brands Beats

Wedbush noted that the same-store sales results of L Brands were up 3 percent, above the 0.1 percent consensus estimate. The analyst is of the view merchandise margin suffered due to the exit of beauty and incremental key category promotions in beauty, sport and bralettes to manage inventory.

The management guided October comps to be up low single digits, up from last month's guidance for flat comps.

Other Names

Chico's FAS, Inc. CHS: The firm lowered its 2017 and 2018 earnings per share estimate for Chico's FAS on margin assumptions and timing of outyears. However, the 2016 earnings per share estimate was unchanged. The firm also maintained its $12 price target on the shares of the company.

Coach Inc COH: Wedbush maintains its 2017 and 2018 earnings per share estimate for Coach but lowered its price target to $37 from $42.

Express, Inc. EXPR: Wedbush lowered its third-quarter earnings per share estimate for Express to $0.13 from $0.14, blaming the action on incremental store-wide promotions and lackluster checks. The firm maintained its 2016, 2017 and 2018 earnings per share estimate for the company and its $12 price target was also left unchanged.

Related Link: Are Retailers Right In Blaming The Presidential Election?

Urban Outfitters, Inc. URBN: Wedbush lowered its third-quarter earnings per share estimate for Urban Outfitters by a cent to $0.45, although pointing out that it remained a penny above consensus. The firm lowered its 2016, 2017 and 2018 earnings per share estimate modestly but maintained its $34 price target.

At Last Check ...

• Buckle was down 0.05 percent at $21.23.
• Chico's was up 1.89 percent at $12.42.
• Coach was down 0.22 percent at $36.55.
• Express was up 2.89 percent at $12.98.
• Gap was up 14.38 percent at $26.06.
• L Brands was up 0.89 percent at $71.75.
• Urban Outfitters was up 1.62 percent at $36.44.
• Zumiez was up 3.5 percent at $21.89.

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