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Media Citations: January 12, 2010 to January 25, 2010

|Includes:AAPL, AEO, ANF, ARO, BJ, COST, GE, MSFT, PSUN, SHLD, TGT, Wal-Mart Stores, Inc. (WMT)

Costco Clubs Sam's Club

Wal-Mart doesn't lose a lot of battles in the retail world, but the company has struggled to extend its traditional dominance into the U.S. discount-warehouse arena.

Brian Sozzi, an analyst for Wall Street Strategies says the Sam's Club announcement underlines Costco's success in the warehouse club category. "I think Costco is doing better than Sam's, and Sam's is trying to cut the fat off its expense base," he says.

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Target CFO's $2 Million Sale

After floundering towards the end of 2008, Target (Ticker: TGT) is back on track while turning up the heat on competitor Wal-Mart Stores (NYSE:WMT). But the kitchen may have become too hot for Target's chief financial officer, who sold $2 million in stock.

Brian Sozzi, an analyst at Wall Street Strategies who rates the stock at Buy, says he doesn't think Scovanner's sale is a red flag for the company. Given Scovanner's frequent selling (including at times when the company's stock was trading at much lower prices), the sale probably doesn't presage a fall in the share price, Sozzi says. Also, the company has been particularly positive on recent conference calls and releases.

"I haven't seen anything in the last two-to-three months that would indicate doom ahead," he says.

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Check Out Line: Sam’s Club outsources, sheds 10 percent of jobs

Check out Sam’s Club cutting 11,200 jobs or about 10 percent of its workforce as it outsources in-store product demos and sheds jobs for recruiting new business members to its warehouses.

Sam’s Club’s moves could put extra pressure on rival Costco, which has resisted mass layoffs, said Wall Street Strategies analyst Brian Sozzi in a note on Monday.

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Recession-Friendly Retailers Could Keep Gains
The Wall Street Journal

Despite the economy's gradual improvement, investors eyeing retail stocks await the return of fully-employed customers, flush once again with cash.

"I don't necessarily see the consumer after a year of buying Kirkland's nuts going back to Planter's," said Brian Sozzi, equity research analyst at Wall Street Strategies.

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Target to Spend $1 Billion on Renovations

Target's focus in 2010 will be on store renovations rather than new openings, the company said ahead of its investor meeting on Thursday.

Wall Street Strategies analyst Brian Sozzi says Target could enter Mexico in the next three to five years.

It may also enter Canada or Latin America.

"The combination of these actions should ultimately boost Target's valuation," Sozzi wrote in a note.

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Target Aims for Same-Store Sales Gains Over Expansion

Looking to boost same-store sales, Target says it’s going to focus on polishing up old stores rather than building new ones.

“All in all, we like where the new CEO is steering this ship,” Brian Sozzi, an analyst with Wall Street Strategies, wrote in a research note published today.

Increased overseas sales should help smooth out ups and down in the U.S. market, Sozzi wrote. Target should also see enhanced earnings growth and improved cash flow from investments. Meanwhile, a more diversified revenue stream will reduce the risk Target faces during business declines, Sozzi added.

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Coach North American sales disappoint, shares off

Coach Inc's North American same-store sales fell short of some Wall Street projections, sending shares of the U.S. leather goods company down 6 percent.
Coach, which makes handbags, wallets, shoes and other accessories, expects sales and profit to grow this year, but did not provide a detailed earnings forecast as some may have anticipated.

Also, inventories at the end of the quarter were down about 30 percent from a year earlier, which is "not what one would expect in a business returning to supposed sustainable (comparable sales) growth," said Wall Street Strategies analyst Brian Sozzi.

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Coach Slides Despite Strong 2Q Profit

Coach (NYSE:COH) delivered a better-than-expected second quarter profit last night, but it’s not doing much to help the stock.  Shares of the luxury retailer are sliding today, thanks to what investors deem to be lackluster sales. A 3% growth in same-store sales was below analyst’s more bullish expectations.

Wall Street Strategies analyst Brian Sozzi has a different take and still sees shares as undervalued. He writes: “Once again, we deem this an attractive valuation given Coach’s strong comparative balance sheet ($1.1 billion in cash, minimal debt), growing business in the key Chinese retail market, and U.S. comp trends that, while below historical norms, should generally outperform the sector average.”

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Target Resumes Stock Buyback

Target is resuming its $10 billion share repurchase program, in a good sign that the retail sector is improving.

Wall Street Strategies analyst Brian Sozzi said the repurchase program has the potential to boost earnings per share by $1 over the next two years.

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P&G to Sell Directly to Shoppers

Procter & Gamble is looking to sell its products directly to consumers with a new Web site, according to the Associated Press, putting it in competition with the retailers that currently offer its products.

But this move can be viewed as a push-back on retailers like Target, Wal-Mart and Costco who have spent much of 2009 cutting costs and inventory to keep cash flow within the business, Wall Street Strategies analyst Brian Sozzi said.

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En Garde, Retailers .... P&G Takes Products Direct to Web

The pressure on retailers just got racheted up a notch.

Consumer products giant Procter & Gamble is taking hundreds of its products directly to consumers through a new Web site it is testing. This move will put the manfucturer of products such as Tide detergent, Pampers diapers and Gillette shavers in direct competition with the some of its biggest customers, traditional retailers.

Wall Street Strategies retail industry analyst Brian Sozzi notes that Target  , Wal-Mart and Costco  have been trying to manage their costs by eliminating products that don't sell quickly.

"Target, for example, no longer offers 80-plus kinds of shampoo," Sozzi said. "Wal-Mart's stores no longer pile inventory on top of shelves, saving them money and making the store much more open/easy to shop."

That's been bad news for P&G and other consumers products companies that have long relied on product innovation to stir up consumer demand.
"I see the P&G news as a fight back by a consumer products company who believes every one of their products has a customer need," said Sozzi, who does not cover P&G.

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Disclosure: We do not own shares.