Raymond James Cuts Cost Plus to Market Perform
Raymond James downgraded Cost Plus (CPWM) to market perform from strong buy, after news about the resignation of its Executive Vice President of Merchandising Theresa Strickland.
Analyst Budd Bugatch says Cost Plus could re-establish positive sales, but earnings per share (EPS) direction was predicated, in part, on Strickland's talent as a merchant. He thinks her departure clouds the company's merchandising and strategy. He believes merchandising was among the company's best run functional areas; it needs to improve its marketing and supply chain planning. He cut his $1.22 fiscal year 2008 (ending Jan.) EPS estimate to $1.17, which is due to additional data gleaned from the fourth quarter conference, not to Ms. Strickland's departure.
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