Susquehanna Maintains a 'Positive' Rating on Tween Brands (TWB), Lowers FY09 Estimates

November 20, 2008 9:14 AM EST

Susquehanna maintains a 'Positive' rating on Tween Brands, Inc. (NYSE: TWB). Price target $10.

Susquehanna analyst says, "Given the weak economic environment and what management described as a lack of customer activity thus far in November, TWB withdrew its previously stated guidance for 2H08. Management also noted it is taking aggressive steps to entice shoppers to spend this holiday season with accelerated promotional strategies. TWB continues to focus on preserving cash, tightly managing inventories, and controlling expenses. The current capex budget for 2009 was reduced to $10 mln-$15 mln, which compares to $65 mln-$70 mln expected this year. Importantly, the planned conversion of all Limited Too stores to the value brand Justice is on track to begin in January 2009, and to be completed by 1Q09-end. Management is highly honed in on effectively communicating the conversion to both brand shoppers, with efforts spanning catazine mailings, web and in-store advertising, as well as a launch party over the Valentine's Day weekend. Taking a more conservative look at 2009, we are reducing our EPS forecast by $0.15 to $1.10, and are adjusting our 12-month price objective to $10."

Tween Brands Inc. (Tween Brands) is an operator of two specialty retailing brands, Limited Too and Justice.

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