Sales of BARE Continue To Be Weak

Analysts at Goldman Sachs downgrade Bare Escentuals Inc (NASDAQ: BARE) from “neutral” to “sell,” while reducing their estimates for the company. The target price for BARE has been reduced from $12 to $11.

Goldman Sachs expects BARE to post flat sales for both 4Q09 and 2010. Recent US retail sales data suggests that sales at Bare Escentuals’ key outlets declined during June-August. The weak sales momentum would exacerbate concerns regarding the longevity of the company’s core products, the analysts believe.

Bare Escentuals may find it difficult to sustain its high market share and margins in the long term. Goldman Sachs has reduced its EPS estimates for 2009, 2010 and 2011 from $0.92 to $0.89, from $0.96 to $0.87 and from $1.01 to $0.85, respectively.