Liz Claiborne Shares Soar On Analyst's Forecast

He expects New York-based Liz Claiborne to follow this trend over the medium term because of its cost-cutting efforts.

Executives forecast that Claiborne's selling, general and administrative expenses will fall 12 percent this year to $1.6 billion.

Rowbotham noted that the company's relaunch of its namesake label, with goods designed by Isaac Mizrahi, is off to a strong start. While the label accounts for only 17 percent of the company's consolidated revenue, it made up for almost half of its partnered brands division, which includes such labels as its licensed DKNY jeans and Dana Buchman clothing line.

As a result, Goldman Sachs is raising its earnings forecast for fiscal 2009 to profit of 15 cents, up from a loss of 23 cents, and it's increasing its earnings-per-share estimate for Liz Claiborne to 45 cents from breaking even.

Analysts surveyed by Thomson Reuters on average forecast earnings of 7 cents per share for the current fiscal year, and profit of 27 cents for 2010.

Rowbotham expects positive same-store sales comparisons in 2010, which assumes an improving economy. Same-store sales, or sales at stores that have been open at least a year, is considered a key indicator of a retailer's health.