Barclays on U.S. Retail Hardlines: 2012 Outlook: Expect Fundamental Performance to Remain Polarized

Barclays on U.S. Retail Hardlines: 2012 Outlook: Expect Fundamental Performance to Remain Polarized

Barclays analyst, Alan M. Rifkin, said, "We expect fundamental performance within Hardlines to remain polarized in 2012, continuing a trend that we have seen throughout 2011. On the macro front, we anticipate that the environment, while modestly improved from 2011, will still be challenged, with continued housing weakness and high absolute unemployment weighing on performance. Given the the Hardlines' sector dependence on the healthof housing, and to a lesser extent, the unemployment landscape, we expect 2012 to be another polarized year, with home furnishings and auto parts performing the best, while consumer electronics and office products remaining challenged. We look for continued modest gains within home improvement."

"Reiterate Top Picks: Our top picks - AutoZone (NYSE: AZO), Bed Bath & Beyond (Nasdaq: BBBD), Home Depot (NYSE: HD), O'Reilly (Nasdaq: ORLY) and Tractor Supply (Nasdaq: TSCO) - remain unchanged. With the exception of Tractor Supply (which is the only true and successful "growth" name that we cover in Hardlines), each of these companies has successfully embraced its maturity and focused on growing margins through streamlining operations and growing EPS through aggressive (yet well-timed) share repurchases."

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