Last month, star retail analyst Kristin Bentz shared her excellent framework for picking winners in retail for the holiday season. This morning Kristin followed up with her holiday picks as we head into door-busting Black Friday:
First, I want to note that Ann Taylor (NYSE:ANN) is down over 10% since I raised a red flag about their discounts when we talked last month.
Also, Abercrombie & Fitch (NYSE:ANF) management concurred with my analysis that Aeropastale (NYSE:ARO) is taking market-share from them. Although the stock has risen on short covering in the short term, I think the expectations bar for ANF is slowly rising. As that happens, investors will become increasingly disappointed in the company’s performance. I don’t care how many stores they open in Milan if you can’t fix your business here in the US.
This is a shift in consumer behaviour for the teen market. ARO has now had 26 consecutive months of beating American Eagle Outfitters (NYSE:AEO) and ANF in same store sales. Although, the beats are narrowing and that is something to watch. I believe that of all the teen players, ARO is the best positioned for the holidays in terms of pricing and inventory. Consumers will definitely look for the best deals out there. However, I am a bit cautious as their same store sales gains are contracting a bit.
Disclosure: No positions/No Conflicts.
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