Banc of America Lowers Kenneth Cole Opinion

Analyst Susan Silverstein blames slower department store sales for the upscale shoe maker's lower-than-expected earnings

Banc of America downgraded Kenneth Cole (KCP ) to market performer from buy.

Analyst Susan Silverstein says she's surprised by the extent of the shortfall. She cut the $1.85 2001 EPS to $1.22, and cut the $2.15 2002 to $1.40. She believes these issues are pressuring results: 1) department store footwear business is slow; 2) larger, newer stores are not seeing a sales ramp, which is causing operating leverage pressure; 3) moderated licensing business given the slow department store traffic; 4) signs for the back-half turn are not encouraging.

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