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Brian Sozzi
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Biography CEO & Chief Equities Strategist of Belus Capital Advisors. In this capacity, responsible for researching and developing an equities portfolio of mid and large-cap positions for clients, in addition to leading the firm’s digital content and broader research initiatives. Belus... More
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Wall Street Strategies Inc.
  • March 2010 Media Citations to Date 0 comments
    Mar 19, 2010 1:10 PM | about stocks: WMT, TGT, GES, COST, BJ, ZQK, HOTT, NKE, ARO, AEO, PSUN, GE, GYMB, TLB, TJX, ROST, AZO

    La-Z-Boy Shares Are Not Sitting Around

    Barron’s

    In recent years, investing in living-room furniture makers like La-Z-Boy often resembled the easy chair you never parted with: shopworn and definitely out of fashion.

    When the furniture concern reported its fiscal third-quarter results last month, it recorded the first year-over-year sales gain in 18 quarters, says Brian Sozzi, an analyst at Wall Street Strategies.

    Link to full article: http://online.barrons.com/article/SB126814305757358587.html?mod=BOL_hpp_highlight

    UPDATE 2-Movado sees wider-than-expected Q4 loss; shares fall

    Reuters

    Movado Group Inc forecast a wider-than-expected fourth-quarter loss as retailers tightened inventory control, sending the watchmaker's shares down 9 percent in trading after the bell.

    The company is struggling with retail inventory destocking, and discounting in the industry, Wall Street Strategies analyst Brian Sozzi said by phone.
    "Many retailers that carried their line of products are no more in business, and those that are in business, are discounting their products heavily," Sozzi said.

    Link to full article:
    http://in.reuters.com/article/governmentFilingsNews/idINSGE62E0TX20100315

    US retail sales show surprise rise in February

    Financial Times

    US retail sales recorded a surprise rise in February as consumers lifted recovery hopes by braving winter storms to show renewed interest in spending.
    But separate consumer sentiment figures suggested that while spending habits might be loosening, the state of the labour market continues to darken spirits.
    “What we may be encountering at the moment is the release of pent-up demand from less dire economic conditions and consumer mindsets,” said Brian Sozzi, a retail analyst at Wall Street Strategies.

    Link to full article: http://www.ft.com/cms/s/0/113b2db8-2de2-11df-a971-00144feabdc0.html

    UPDATE: Quiksilver Up, PacSun Down As Cos Try Turnarounds

    The Wall Street Journal

    Quiksilver Inc. (NYSE:ZQK) and Pacific Sunwear of California Inc. (NASDAQ:PSUN) shares took divergent paths Friday, highlighting the differences between the two casual-apparel retailers as Quiksilver moves toward a turnaround and Pacific Sunwear struggles to find its identity.

    Though the companies sell some similar products, Quiksilver has exposure to the wholesale channel - selling its goods in department stores and even PacSun stores - and has stronger ties to the communities it serves, Wall Street Strategies analyst Brian Sozzi said. The company has strong ties to skateboarders with its DC Shoes brand and sponsors skateboarding and surfing events, as well as sponsoring athletes to wear its products, he said.

    Link to full article: http://online.wsj.com/article/BT-CO-20100312-710146.html

    Schaeffer's Daily Contrarian

    Schaeffer’s Research


    On Friday morning last week, Ann Taylor Stores (NYSE:ANN) reported a profit as "sales showed signs of stabilizing," notes this Barron's article. The shares slipped following the report, and the author believes that there is more downside in the works for ANN, citing valuation and the lack of a blowout quarter.

    Given the stock's more than 530% gain during the prior 12 months, ANN now trades at 27.5 times forward earnings, the article states. For comparison, the author notes that Chico's FAS (NYSE:CHS), Nordstrom Inc. (NYSE:JWN), and J.Crew Group (JCG) all trade with forward P/E ratios in the mid-teens. What's more, the Street is anticipating that revenue will shrink year-over-year in 2011.

    Analysts agree with this dour outlook, with Wedbush Morgan noting that "the company is in the early stages of a comp and margin recovery," making its 530% gain difficult to justify. Furthermore, Wall Street Strategies analyst Brian Sozzi believes that Ann Taylor may have pricing problems when it returns "to full-price business longer-term." Finally, Sozzi also takes issue with ANN's recent run-up, calling it "the richest multiples...within our specialty apparel sector coverage."

    Link to full article: http://www.schaeffersresearch.com/commentary/content/ann+taylor+stores+looks+to+shake+loose+stubborn+bears/dailycontrarian.aspx?newsid=98544

    UPDATE: Deal Making Heats Up Among Apparel Makers

    The Wall Street Journal

    Perry Ellis International Inc. (NASDAQ:PERY) is also seen in the industry as a potential buyer because of the strength of its balance sheet and brand strength, said Brian Sozzi, an analyst at Wall Street Strategies Inc. In addition, surf-wear maker Quiksilver Inc. (ZQK) has been rumored as a potential target.

    Link to full article: http://online.wsj.com/article/BT-CO-20100315-710431.html

    Parsing the Fed's Statement

    SmartMoney

    Stocks rose following the Fed’s announcement that the benchmark interest rate would stay low “for an extended period.” As expected, that key phrase remained unchanged from previous statements, indicating that the central bank is not yet ready to raise the federal?funds?rate from its record low of between 0.00% and 0.25%.

    The Fed's statement also indicates a stronger view of the prospects for business investment, with the central bank saying that business spending “has risen significantly.” A pickup in business investment will be a crucial factor in creating sustainable economic growth and real improvement in the job market, Brian Sozzi, an analyst at Wall Street Strategies, wrote in a report this afternoon.

    Link to full article: http://www.smartmoney.com/Investing/Economy/Parsing-the-Feds-Statement/

    UPDATE: Guess 4Q Profit Surges 81%; Dividend Raised

    The Wall Street Journal

    Guess--which has historically been conservative with its estimates--expects first-quarter earnings of 46 cents to 48 cents a share on revenue of $495 million to $510 million. Analysts surveyed by Thomson Reuters expected 47 cents a share on revenue of $485 million.

    Following the results, Brian S. Sozzi, an analyst at Wall Street Strategies, said the company’s  return to positive U.S. same-store sales beat Wall Street expectations and said profitability improved behind the company’s trendy G by Guess concept.

    Link to full article: http://online.wsj.com/article/BT-CO-20100317-714718.html?mod=WSJ_earnings_MIDDLETopHeadlines

    J. Crew Bounces Back

    Forbes

    With retailers across the price spectrum clearing the cobwebs from the recession, J. Crew Group topped The Street's estimates with its latest quarterly figures Tuesday.

    “It’s quite depictive of pent-up demand being unleashed, and much in line with the demand trends expressed by the management teams” in quarterly earnings reports, says Brian Sozzi, an analyst with Wall Street Strategies.

    Link to full article: http://www.forbes.com/2010/03/09/jcrew-group-retail-markets-equities-earnings-icsc.html?boxes=financechannelforbes

    American Eagle May Catch Tailwinds

    Barron’s

    Shares of American Eagle Outfitters (ticker: AEO) are back in fashion.
    On Wednesday morning, the teen-apparel retailer reported that fiscal fourth-quarter profits soared 81% on improved sales and growing margins. The company also said it expected that first-quarter profit would be between 15 and 17 cents, ahead of analysts' midpoint expectations of 15 cents.

    A large overhang on the stock, American Eagle's ill-fated Martin+OSA brand, has finally been removed as the company also announced today that it is shuttering these operations. Wall Street Strategies' Brian Sozzi estimates that M&O could have cost the company as much as 15 cents per share in fiscal 2009, so the bounce in the core teen brands dovetails with management's renewed focus on its flagship and Aerie stores.

    Link to full article: http://online.barrons.com/article/SB126817601719859011.html?mod=BOL_hpp_highlight

    UPDATE: Hot Topic 4Q Drops 44% On Lower Margins, Sales

    The Wall Street Journal

    Hot Topic Inc. (NASDAQ:HOTT) fiscal fourth-quarter profit slid 44% because of continued sales weakness and falling margins.

    The teen retailer also projected a first-quarter loss of 2 cents to 5 cents a share, including 2 cents a share in expenses related to the company’s online music site, and based on a high-single-digit decline in same-store sales. Analysts surveyed by Thomson Reuters expected a 2-cent loss.

    For months, Hot Topic’s results were bolstered by merchandise tied to the popular vampire film "Twilight," but sales have slid as the film’s sequel was "much less popular than management had planned for," according to Majestic Research. As a result, the firm sees more markdowns in the months ahead, given the inventory buildup.

    Still, Hot Topic posted a less-than-feared decline in February same-store sales as it benefited from strong results at Torrid and products tied to Tim Burton’s "Alice In Wonderland," according to Brian Sozzi, an analyst at Wall Street Strategies.

    Link to full article: http://online.wsj.com/article/BT-CO-20100310-715938.html

    American Eagle To Close Martin + Osa Concept; Shares Jump

    The Wall Street Journal


    American Eagle Outfitters Inc. (AEO) announced it would shutter its 28-store Martin + Osa concept, as the apparel retailer management determined the brand wasn’t achieving performance levels that warrant further investment.
    Instead, the company said it would focus its efforts and resources on its namesake brands--which includes its aerie and 77kids.

    Shares, which rose as much as 11% in after-hours trading, were up 6.4% to $18.24.

    Brian Sozzi, an analyst at Wall Street Strategies Inc., said the company’s resources would be better served cultivating the core American Eagle brand and to develop 77kids both online and in malls.

    Link to full article: http://online.wsj.com/article/BT-CO-20100309-715385.html

    American Eagle, Minus Martin + Osa = Buy

    TheStreet.com

    On Tuesday, American Eagle announced that it will shutter its Martin + Osa concept. This highly-anticipated news overshadowed what was a strong fourth-quarter for Eagle.

    The news sent shares of American Eagle climbing 8% to $18.52 in morning trading.

    All 28 Martin + Osa stores will close, as well as its online business -- moves that should be completed by American Eagle by the end of the year.

    This announcement has been a long-time coming, as Martin + Osa has been a drag on American Eagle's business since its inception in 2006. In 2009, Martin + Osa recorded a loss of about $44 million.

    Still, it's unclear why the decision to discontinue the concept was so difficult for American Eagle, Wall Street Strategies analyst Brian Sozzi wrote in a note. He plans on inquiring about the company's review process for underperforming brands.
     
    Link to full article: http://www.thestreet.com/story/10699490/1/american-eagle-minus-martin-osa-buy.html?cm_ven=GOOGLEFI

    The Plus Size Furniture Market May be an Opportunity

    AOL Finance


    The Plus Size Furniture Market May be an Opportunity

    Link to full article: http://www.dailyfinance.com/story/plus-size-furniture-market-expands-as-americans-widen/19388544/

    The Wall Street Journal

    Movado Group Inc’s (NYSE:MOV) bleak forecast and steeper-than-expected fiscal fourth-quarter loss show the watch maker is still struggling while many of its competitors are starting to benefit from improving conditions.

    "When you look at Movado’s products, ranging from Tommy Hilfiger to Hugo Boss, these products are not as fashionable as some of the other products being released," Wall Street Strategies analyst Brian Sozzi said. "There is demand for watches because many customers haven’t been in malls for over a year, but they want products that add value to their assortment and add fashion, like Tag Heuer," which is owned by LVMH Moet Hennessy Louis Vuitton (LVMUY, MC.FR).

    Link to full article: http://online.wsj.com/article/BT-CO-20100316-710734.html?mod=WSJ_latestheadlines

    How does Tiger’s Return Impact Nike?

    AOL Finance

    Link to full article: http://www.dailyfinance.com/story/company-news/no-mention-of-tigers-return-in-nikes-earnings-call/19404263/

    Ready, Set, Shop? Consumers Shift Gears

    SmartMoney

    Stocks in Asia closed higher today, European shares are up, and U.S. futures are pointing to a slightly lower open.

    Meanwhile, the “new reality” that is settling in of not-so-deep consumer pockets is influencing designers and high-end department stores to rethink quality and pricing – lowering them slightly in order to attract consumers and boost sales, says Brian Sozzi, research analyst at Wall Street Strategies.

    Link to full article: http://www.smartmoney.com/investing/stocks/market-update-friday-mar-19-2010-21617/

    Guess Q4 beats estimates, raises dividend

    Reuters

    Apparel brand Guess Inc's (GES.N) fourth-quarter results topped estimates, as fewer discounts helped margins during the holiday quarter, and the fashion house saw demand in Europe rise.

    HOT STOCKS

    Guess also increased its quarterly dividend by 28 percent.

    "More than half of the revenue increase (for the quarter) was driven by business in Europe which posted a 24 percent top line increase," Chief Executive Paul Marciano said on a conference call with analysts.
    Guess, best known for its jeans, also said this year it will reignite plans for growth and invest in retail expansion, and that the company is looking to replicate its success in Europe in Asia.

    "While European expansion is important to their story, the opportunities I see exist in Greater China," analyst Brian Sozzi of Wall Street Strategies said.

    Link to full article: http://www.reuters.com/article/idUSTRE62G4IJ20100317?type=globalMarketsNews


     



    Disclosure: We have no positions in any stocks mentioned.
    Stocks: WMT, TGT, GES, COST, BJ, ZQK, HOTT, NKE, ARO, AEO, PSUN, GE, GYMB, TLB, TJX, ROST, AZO
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