JP Morgan's EPS Revisions For Fashion Retail

The Buckle, Inc. BKE reported earnings that were down in 2Q (down 18% to $0.44, compared to $0.52 this time last year) for the firs time since 2Q2006, JP Morgan reports. JP Morgan is lowering EPS estimates for BKE to $2.60 for 2010E and $2.65 for 2011E and is estimating lower cash balances for 2010 year-end of $4/share (compared to $5/share last year). JP Morgan writes that BKE has paid special dividends out the last three out of four years, and is expecting another before 2010 year-end. JP Morgan maintains its Underweight rating and $26 price target. The Buckle, Inc. closed Friday at $23.92. The Wet Seal, Inc. WTSLA has continued to disappoint with 2Q comps down 4.3% on top of the 10.6% already this year, JP Morgan reports. The company is, however, beginning to benefit from recent markdowns and size optimization programs, and WTSLA has plans to open 60 new stores in 2011, making the company one of the few double digit growth stories in the retail fashion space, according to JP Morgan. JP Morgan is lowering 2010 EPS estimates to $0.17, and for 2011 to $0.20. WTSLA announced a $25M share buyback which could prove to be $0.02-0.03 accretive next year. JP Morgan maintains its Overweight rating for The Wet Seal, Inc., which closed Friday at $2.94.