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Media Citations: February 23, 2010 to March 4, 2010

|Includes:AEO, ARO, BEBE, BJ, COST, DDS, HD, JCP, JWN, KATE, KSS, LB, LOW, M, SKS, TGT, TJX, Wal-Mart Stores, Inc. (WMT)

These are but a few of the noteworthy pieces in recent weeks.  In order to view all articles I have appeared in, ranging from The Wall Street Journal to Barron's, please Google my name and click the "news" tab. I have also had two pieces published on Barron's; you may view those by using the search tab on their website. 

As I always, I appreciate the fine work from all of my reporter friends, they are truly best in class and a pleasure to talk with about the markets and retail.

US consumer spending picks up pace
Financial Times
US consumer spending picked up in January for the fourth month running, lifting hopes that consumers could start adding momentum to an economic recovery that so far has been fuelled by manufacturing.
“As long as income growth remains sluggish, in order to propel GDP [gross domestic product] consumers will have to continue to wind down the savings built up in 2009,” said Brian Sozzi, an analyst at Wall Street Strategies. “Whether this happens is an unknown variable given uncertain prospects on jobs and the overall direction of the US economy.”

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Timberland Focuses Boot Sales
The Wall Street Journal
The Timberland Company (NYSE:TBL) is focusing on the growth of its environmentally friendly Earthkeepers boot brand, in its efforts to become "the most famous outdoor brand on Earth."
"The boot trend has not been favorable to Timberland over the past few years, according to Brian Sozzi of Wall Street Strategies.

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Costco Stock a Better Buy Than BJ's
In a battle between the wholesalers, Costc beats out BJ’s.
Granted, both companies do essentially the same thing: sell bulk items and discretionary merchandise at discount prices. But when you dig down, Costco just does it better.
Both retailers missed earnings expectations, sending shares down in pre-market trading. Still Costco has some favorable catalysts going forward.
As a result, Sozzi says he is leaning toward maintaining his buy rating on Costco and reiterating his sell rating on BJ's.

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Costco, BJ's Squeezed By Competition

Bulk savings retailers Costco and BJ's Wholesale Club both reported quarterly earnings that fell short of the Street's expectations Wednesday, despite better sales.

BJ's forecast "paints a story of a company that will have difficulty on the gross margin line that is married to further spending on the technology side of the business," said Brian Sozzi, an analyst for Wall Street Strategies, in a note. He attributes BJ's "lackluster" fourth-quarter turnout to competition in the fresh food department and weak sales in discretionary merchandise.

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Hot Topic Feb comp sales ahead of estimates
Teen clothing retailer Hot Topic Inc's same-store sales came in ahead of estimates, after missing expectations for three straight months, as sales improved sequentially at its namesake division.

The company, which sells rock 'n' roll-inspired clothing as well as music and accessories to teenagers, also forecast a fall in same-store sales in the low teens range this month, as sales of teen vampire flick 'Twilight' peaked in March last year, a spokesman said on a conference call.

Last month, the company decided not to sell DVDs of Twilight sequel 'New Moon'. However, shopping before Easter, which falls on April 4, could boost the results in March.

"I think that comp might be a little conservative just because of the buying that takes place in the lead up to Easter," Wall Street Strategies analyst Brian Sozzi, who expects a same-store sales decline in the high single digit range, said.

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Market Rewards Retailers That Have Big Same-Store-Sales Beats
The Wall Street Journal
The stock market Thursday rewarded retailers that posted strong or unexpected same-store sales increases for February, and this time, even a modest beat was enough to spark a rally in the stocks.

Last month, only those companies that posted the very best results--or raised their guidance--saw any bounce in their shares. Confidence in the retail sector has improved as consumers have started spending again and as a turnaround begins, with sales of big-ticket and other items picking up in recent months.

Retailers now are beyond what appeared to be the toughest month in the first quarter, Wall Street Strategies analyst Brian Sozzi wrote in a note to clients. Previews for the month suggested bad weather on the East Coast "would detract from the generally positive story" in the retail sector, he said, but Thursday results were mostly above consensus estimates as strong demand trends outweighed the impact of winter storms.

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Costco Off 4% on FYQ2 Miss
Shares of Costco (NASDAQ:COST) are down $2.38, or 4%, at $58.98 after the big box chain beat fiscal Q2 revenue estimates by a couple hundred million but missed on the bottom line by two cents.

Revenue of $18.74 billion was 11% higher and ahead of the $18.5 billion estimate, while profit per share of 70 cents missed the 72-cent average estimate.
The culprit was a gross profit margin below analysts’ estimates, at 10.67% versus 10.79% expected, and a a rise in operating expenses of 12%, more than expected, according to a quick note out on the items by Brian Sozzi of Wall Street Strategies this morning. Share count rose, too, writes Sozzi, even though the company was probably buying up its shares during the quarter, he muses.
Sozzi’s keeping his “buy” rating on the stock, pointing out that with $4.1 billion generated in the quarter, he thinks the company’s primed to do some buybacks or boost the dividend.

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Furniture Orders Bode Well For Housing, Economy
The Wall Street Journal

Strong year-to-date orders at furniture companies Ethan Allen Interiors Inc. (NYSE:ETH) and Haverty Furniture Cos. (NYSE:HVT) offer the latest evidence of a turnaround in the home sector and suggest consumers are ready to make bigger purchases again.
Furniture companies and their counterparts, home-improvement retailers, had seen sales slump during the recession as customers cut back on purchases of big items according to Brian Sozzi of Wall Street Strategies.

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Moms Behind Retail Rally
Despite worries that heavy snowfall and rough weather on the East Coast would dampen February retail sales, the latest results show that demand managed to shake off the snow.

“People found their way to the malls and discount centers and once there, bought merchandise,” said Brian Sozzi, an analyst with Wall Street Strategies.

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Now For The Snowstorm Hangover
February saw two of the 25 most significant snowstorms to hit the Northeast United States in the past 50 years, and it wouldn't be a surprise if some lingering snowflakes show up in a pair of key economic gauges due over the next few days.
The storms could also be a major swing point for February's retail sales, and Wall Street Strategies analyst Brian Sozzi recently provided a list of companies that had outsize exposure to inclement weather on the East Coast.

"Just think, mall parking lots needed to be plowed, stores opened late--if at all," Sozzi wrote in a Tuesday note.

Sozzi warned that certain retail chains have a considerable presence in regions where weather is an issue, but one of those, BJ's Wholesale Club, which has 72% of its store base on the East Coast, managed to overcome the challenge of rough weather to post a 7.5% gain in February sales from a year ago.

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Disclosure: We do not own any shares.