Bank Of America On Specialty Retailers: Performance At Gap A Concern, L Brands Benefited From Fashion Show And Urban Outfitters Still Under Pressure

Lorraine Hutchinson of Bank of America commented in a note on Monday that specialty retailers are likely to post holiday results that are in-line with expectations as weather conditions were mild during the week heading in to Christmas, as opposed to 2013's storms that hurt foot traffic. Hutchinson expects The Gap GPS to report a four percent comp decline during December at the company wide level. Old Navy comps drove outsized profitability at that brand while the Gap stores took a highly promotional stance to drive sales. On the other hand, Hutchinson expects L Brands LB to report a 3.7 percent comp increase for December driven by Victoria Secret's holiday gifting and fashion show that aired on December 9 that drove sales. Finally, Hutchinson expects Urban Outfitters URBN to report a comp gain of 1.4 percent in the fourth quarter driven by a 15 percent comp gain at Free People. The analyst adds that January is the easiest comparison for the company, so the full quarter “should look better” than the November and December data set. The company is still under pressure, but continues to show signs it is “one of the best turnaround stories” for 2015, according to Hutchinson.