Zacks Analyst Interview Highlights: J.C. Penney, Nordstrom and Saks, Inc

Business Wire, March 22, 2007

CHICAGO -- Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst Rob Plaza, who discusses J.C. Penney (NYSE: JCP), Nordstrom (NYSE: JWN) and Saks, Inc. (NYSE: SKS).

A synopsis of today's Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.

Are you overall more bearish [on the retail industry] than you were, say, six months ago?

Yes. Consider also that this time of year is really the seasonal trough. After the holiday season, you have the January sales bingeing, but right now there isn't really anything going on until Easter. Even after that, things die down a little bit until about mid-summer or so, the back-to-school shopping season.

So this is a weak time, especially for specialty retailers. Specialty retailers are often unprofitable in the first half of the year - some even through the first three quarters of the year.

That said, do you still have some companies you will expect to break free and outperform the overall retail group?

There are a couple names I've upgraded in recent months. One is J.C. Penney (NYSE: JCP), a company I've been a fan of for awhile, but was just waiting for a pullback. It's a solid department store operator that has really improved the shopping experience. They're also diversified enough across the country with the different products that they sell. This company should be able to weather any upcoming weakness, and when things begin to improve, they'll be able to take advantage of that.

Nordstrom (NYSE: JWN) is more of a high-end play. They have excellent service, good retail and managed growth. When you walk into a Nordstrom store, you expect to be taken care of and pointed in the right direction, and you're willing to pay a little bit extra.

Along that same line, I upgraded Saks, Inc. (NYSE: SKS). Saks had really good fourth quarter numbers, and then their February same-store sales were up huge - 24 or 25%. This is a real turnaround story. Quite honestly, I was negative on Saks. Then I upgraded them to a Hold last summer, and now the stock is doing really well. I think they've paid out something like $8 in special dividends, and the stock is trading about where it was during the summer. So that's money in the investors' pockets, and you haven't really lost anything in the stock price.

Read the full interview at http://at.zacks.com/?id=2647.

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