Specialty retail 1Q16 EPS expectations now low; opportunity for companies with specific drivers; expect cautious 2Q/2016 guidance
FBR & Co is estimating on average 1Q16 EPS in line with the Street, but believe there could be some downside given a soft April. The focus will be on 2Q/2016 trends/guidance, given recent concerns about the overall retail environment. Heading into 1Q16 reports, they believe PLCE (down -16% despite defensive kids business/co initiatives), CHS (down -11% despite upside from cost-cutting in 2016), and ASNA (down -23% already pricing in weaker missy but Justice SSS turn should be a positive) represent the best upside opportunity, while LULU (down just -2.6%) represents the best downside opportunity.