Jefferies Previews Same-Same-Sales (GPS)

Jefferies & Co. is previewing March 2011 same-store-sales, which are happening on April 7, from companies like Gap GPS. In a note to clients, Jefferies writes, "March Looks to Be in Line. We expect March results to be largely in line with low expectations in light of the Easter shift. Looking forward, April results should be stronger taking into account the benefit of Easter vs. last year. We think planned promotions and some pent up demand have helped retailers begin selling spring merchandise. But High Cotton Prices Remain a Headwind. Following a lower than expected prospective cotton plantings number and drought conditions in key cotton growing states such as Texas, we expect prices to remain elevated (currently up 35% YoY). We estimate 30-50% of the cost of a garment is from raw materials and see potentially damaging ramifications for gross margins, which are at a cyclical peak in the industry." Shares of GPS gained 1 cent yesterday to close at $22.53.