Brean Capital On Retailers: Downside Risk To April Comps Possible - Buckle (NYSE:BKE)

In a report published Wednesday, Brean Capital analyst Liz Pierce commented on the retailing space, noting that the sector has already priced in a disappointing April but it is "premature to throw in the towel" for the group. Pierce stated that she had "relatively low expectations" for April comps given a difficult compare due to the Easter shift, it is possible that comps could come in worse than expected given a late arrival of Spring weather and continued West Coast port troubles. The analyst added that based on channel checks in regions not impacted by weather, traffic was "decent" during the bottom half of April but conversion and sales were negatively impacted by merchandise delays. However, consistent with the past few months, promotional activity (which was up slightly year over year) on athleisure and festival looks remained a primary traffic and conversion driver.

Company Specific Outlook:

Pierce offered the following comp expectations for several retailers under her coverage:

Buckle Inc BKE is expected to report a comps decline three percent to five percent, versus +0.8 percent last year.
L Brands Inc LB is expected to report a comps in a range of negative one percent to plus one percent, versus a "tough" one-year and two-year stacked compare of plus eight percent and plus ten percent, respectively.
Zumiez Inc. ZUMZ is expected to report a comps decline between two percent to four percent, versus "tough" compares of +8.2 percent and +12.8 percent on a one and two-year stacked basis, respectively.

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