Mixed August Sales Numbers From Buckle, The Gap, And L Brands

August delivered some mixed numbers for retailers Buckle Inc BKE, Gap Inc GPS and L Brands Inc LB. In a new report, Wedbush analyst Morry Brown discussed August sales numbers for the three retailers.

In terms of same-store sales (SSS), L Brands came in slightly ahead of expectations for the month, while Gap fell slightly below expectations. Buckle, on the other hand, reported a -14.8 percent comp in August, well short of consensus expectations of -8.8 percent.

“We believe the shift in fashion away from embellishment-heavy items (higher AUR) toward simple styles (lower AUR) will continue to pressure top and bottom line results,” Brown said of Buckle.

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In light of the disappointing numbers, Wedbush dialed back its 2016/2017/2018 EPS estimates for Buckle from $2.45/$2.46/$2.47 to $2.33/$2.32/$2.33. In addition, the firm lowered its price target for the stock from $22 to $21.

Brown also noted that the new price target for Buckle represents only a 9x multiple on forward 24-month EPS projections because of the company’s slowing sales trends and margin uncertainty.

Wedbush maintains its $25 price target for Gap and its $65 price target for L Brands and did not adjust earnings estimates through 2018. The firm has a Neutral rating on all three stocks.

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