Byline: Catherine M. Curan

NEW YORK — Wall Street expects another rocky year for women’s apparel retailers, though they see a handful of moderate department stores and specialty stores coming out ahead.
Analysts expect continued positive performances from Ann Taylor Stores and Talbot’s. They also like the spring offerings at Limited’s Express chain, where a pickup is seen.
Among department stores, Sears, Roebuck & Co. and J.C. Penney Co. are expected to have strong seasons, as well as Nordstrom Inc.
However, analysts also said that men’s wear has been consistently stronger than women’s wear and private-label men’s offerings will help boost sales in the department store group.
According to analysts, retailers have a lot to worry about. Among the reasons:
Consumers remain tightfisted and will not accept price increases.
Companies are still consolidating, yet there are still too many stores.
Margin pressures will intensify as raw-material prices continue to rise and the economy begins to slow down from last year’s torrid pace.
The mood for spring is not upbeat, based on last year’s disappointments. If a massive restructuring charge at Kmart Corp. is excluded, profits last year were relatively flat for 44 retailers in both the fourth quarter and year. Not much improvement is forecast for 1995.
“The women’s apparel picture remains extremely ugly,” Robert Buchanan, an analyst at NatWest Securities, said. Among the difficulties Buchanan cited are the aging baby boomer, who is more interested in purchases for the home than the closet, and overinflated prices of women’s ready-to-wear, which continue to turn off consumers.
Buchanan forecasts a rough 1995 for Charming Shoppes, Deb Shops, Lerner New York and Limited Stores divisions of Limited Inc.
On the positive side, Ann Taylor is expected to earn $1.90 a share, against $1.36, while Talbots should net $1.80 against $1.56. The Gap is expected to net $2.41 to $2.50 against $2.20. Limited’s estimates run from 1.35 to 1.55 versus 1.25.
Terrence McEvoy, Janney Montgomery Scott, Philadelphia, lamented the lack of fashion newness and criticized the trend toward short, tight looks that appeal to only a few customers.
“On the women’s fashion side they seem to be shooting themselves in the foot again for the third year in a row,” he said.
McEvoy said Sears should be helped by its heightened emphasis on private brands, earning $5.40 against $3.16. Penney’s should benefit from its strong private-label brands such as Arizona and should earn $4.35 to $4.40 in 1995 versus $4.05.
Edward Johnson, Johnson Redbook, said off-pricers and outlet stores will continue to be under pressure during 1995 as department stores, chains, and discounters have improved their apparel offerings.
“Consumers feel they get better quality and lower prices at department stores, chains and discounters whereas they used to get them at the off-pricers and outlet stores,” according to Johnson.
Among discounters, Wal-Mart should make $1.35 to $1.40 versus $1.17 while Kmart is expected to post break-even earnings against a severely depressed 63 cents. Caldor should earn $3.25 against $2.65 and Dollar General, $1.30 against $1.07.
Not all analysts are pessimistic, however.
Steven Kernkraut, an analyst at Bear Stearns, said he believes spring is off to an OK start, with some shopper interest in apparel. Kernkraut forecast “a fairly sharp rebound in women’s apparel sometime this year,” fueled in part by pent-up demand.
Kernkraut noted that Nordstrom caters to the more affluent customer while many other retailers are chasing the moderate customer. He estimates Nordstrom will earn 43 cents in the first quarter, against 39 cents, and $3 for the year, against $2.47, with same-store sales growing 5 percent for the year. Federated Department Stores Inc. is expected to net $1.55 against $1.41 as it absorbs R.H. Macy. Earnings are expected bounce back to $2.17 in 1996.
May Department Stores Co. should earn $3.20 to $3.33 versus $2.92. Kohl’s Corp. should earn $2.26 versus $1.87, Dayton Hudson Corp. is expected to net $6.52 versus $5.52, and Dillard Department Stores Inc., $2.43 to $2.46 in 1995 against $2.23.
— Fairchild News Service