Barclays Favors Lululemon, The Gap, L Brands Heading In To Earnings

Matthew McClintock of Barclays previewed several Retailers that have yet to report their earnings.“We believe the upcoming release of third-quarter results for companies in our coverage universe should not be too surprising given recent preannouncements,” McClintock wrote in a note to clients on Friday. The analyst adds that “visibility into the holiday season remains highly cloudy and updated guidance should be the key metric to focus on.”The analyst favors companies that offer a differentiated product or experience such as The Gap (NYSE: GPS), Lululemon (NASDAQ: LULU) and L Brands (NYSE: LB)Lululemon and L Brands offer a product differentiation that positions themselves favorable against the broader environment, according to McClintock. The analyst adds that Gap's omnichannel leadership will separate itself from competitors.McClintock believes that investor sentiment surrounding Urban Outfitters (NASDAQ: URBN) is negative and that any “meaningful weakness” after the company reports earnings could be considered an attractive time to acquire shares.McClintock favors Under Armour (NYSE: UA) and VF Corp (NYSE: VFC) as companies that benefit from increased business due to cold weather.Finally, the analyst notes that improving macroeconomic factors have yet resulted in increased consumer demand for lower to middle income focused retailers. In fact, the inverse appears to be occurring according to sales data points.