Needham & Company on Retail Apparel: December SSS Review: More Beats than Misses - Sales Surprise at the Expense of Margins
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Up: 8 | Down: 5 | New: 26
Rating Summary:
5 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Needham & Company on Retail Apparel: December SSS Review: Aeropostale (NYSE: ARO), American Eagle (NYSE: AEO), bebe (Nasdaq: BEBE), The Gap (NYSE: GPS), Hot Topic (Nasdaq: HOTT), Urban Outfitters (Nasdaq: URBN), & Zumiez (Nasdaq: ZUMZ)
More Beats than Misses: Sales Surprise at the Expense of Margins
Analyst, Christine Chen, said, "December SSS, for the most part, positively surprised driven by strong traffic & sales momentum the weeks before and after Christmas, after a slow start to the month and as we expected, at the expense of margins. Aggressive promotions (at levels similar to Black Friday weekend) on Super Saturday weekend, Christmas Eve, and the day after Christmas converted customers in malls during peak weeks. The 2nd half of December (super Saturday weekend and beyond) was significantly stronger than the first 2 weeks as consumers seemed to retrench during the lulls. Most retailers took advantage of peak traffic to clear inventory, especially of slower moving cold weather items such as sweaters, outerwear, fleece, and boots, given the warm East Coast winter. Retailers catering to the high-end (luxury department stores) and those with unique fashion products (such as BEBE, URBN, & ZUMZ) saw positive sales surprises while those with more basic, price driven items disappointed (such as ARO & GPS). We expect January sales to be driven by gift card redemptions for new product arrivals and bargain hunting in clearance racks."
More Beats than Misses: Sales Surprise at the Expense of Margins
Analyst, Christine Chen, said, "December SSS, for the most part, positively surprised driven by strong traffic & sales momentum the weeks before and after Christmas, after a slow start to the month and as we expected, at the expense of margins. Aggressive promotions (at levels similar to Black Friday weekend) on Super Saturday weekend, Christmas Eve, and the day after Christmas converted customers in malls during peak weeks. The 2nd half of December (super Saturday weekend and beyond) was significantly stronger than the first 2 weeks as consumers seemed to retrench during the lulls. Most retailers took advantage of peak traffic to clear inventory, especially of slower moving cold weather items such as sweaters, outerwear, fleece, and boots, given the warm East Coast winter. Retailers catering to the high-end (luxury department stores) and those with unique fashion products (such as BEBE, URBN, & ZUMZ) saw positive sales surprises while those with more basic, price driven items disappointed (such as ARO & GPS). We expect January sales to be driven by gift card redemptions for new product arrivals and bargain hunting in clearance racks."
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