Here's All Of CLSA's Ratings On Specialty Retail

Consumers Vibrant

Analyst Rick Patel noted that the U.S. consumers are alive and kicking, with the jobless rate holding steady at a five-year low of 4.9 percent and consumer confidence ticking up for the past five years. Notwithstanding, the analyst noted that savings rate, despite rising modestly in the year-to-date period, is still flat. Gas prices have also pulled back notably, the analyst noted.

Shopping Trends Not Reflecting Vibrancy

CLSA noted that mall traffic has been down year-over-year for several years despite the sound consumer fundamentals. The firm attributed the weakness to increasing shift towards e-commerce amid the mobile commerce revolution. Even after the e-commerce channel is included, the firm noted that most retailers in its coverage universe are experiencing comp declines.

Related Link: 34 Million Americans Have Already Started Holiday Shopping

Off-Price Gained, Specialty Apparel Pained

While suggesting that the companies are seeing sequential weakness, CLSA noted that off-price stores are outperforming. On the other hand, specialty apparel retailers, especially those targeting teens, are going through the most pain.

Sub-Sectors Dissected

• Accessories & handbag retailers have seen their growth slowing from single-digits to flattish trend, as increasing promotion and shift toward smaller, less costly bags weigh. Increased focus on quality of sales, according to CLSA, can help improve average ticket.
• CLSA stated that luxury retailers are facing the heat of a firmer dollar through lower tourism and forex translations.
• Jewelry, though remaining resilient in the past, has slowed to flattish growth in 2015. CLSA expects growth to decline in 2016, with commodity weakness blamed for it.
• Apparel retailers have been the long sufferers as pricing deflation and struggling comps stifle them.

Ratings, Target Prices

• Coach Inc COH: Buy/$45.
• Ralph Lauren Corp RL: Buy/$125.
• G-III Apparel Group, Ltd. GIII: Outperform/$34.
• Kate Spade & Co KATE: Outperform/$21.
• Oxford Industries Inc OXM: Outperform/$78.
• Signet Jewelers Ltd. SIG: Outperform/$87.
• Tiffany & Co. ( TIF: Outperform/$80.
• Carter's, Inc. ( CRI: Underperform/$95.
• Michael Kors Holdings Ltd( KORS: Sell/$45.

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