"Looking out more medium term, we have less confidence in our forecasts as the visibility is low for a rebound in growth rates and recent earnings revisions have been downward. While the stock is already pricing in some of these challenges, we do not anticipate enough positive catalysts to move the stock meaningfully higher," Kopelman's note said.
Meanwhile, May same-store sales from the 11 companies that still report were generally positive, despite missing consensus estimates. According to the Thomson Reuters Same Store Sales Index, May store sales registered a positive 3.4%, below the estimate of 3.7% for the month.
The company's comparable sales for May 2013 jumped 7% year-over-year, compared to 2% for the May 2012 period and above analysts' expectation of a 4.1% rise in same-store sales. The company's Gap, Banana Republic and Old Navy brands all experienced significant growth. May 2013 comparable sales were compared to the four-week period ended June 2, 2012."We are pleased with the positive customer response to summer product across our brands and the continued momentum in the business," CEO and chairman Glenn Murphy said in a release. The stock was down 0.24% to $40.88 in after-hours trading. American Apparel (APP - Get Report) sales had the biggest upside surprise of 10%, according to Thomson, while Cato (CATO) had the worst sales slide of 2%. Shares of American Apparel popped Thursday afternoon, closing up 7% to $2.13. Shares of Cato closed up 0.6% to $25.51. On the flip side, L Brands (LTD) fell 1.9% to $50.66 on Thursday after the parent company of Victoria's Secret and Bath & Body Works said May comparable store sales rose 3% compared to the year before, slightly below analysts' expectations of 3.2%. Elsewhere, Ann Taylor (ANN - Get Report) shares were rising 1.7% to $31.59, despite declining profit at the women's specialty apparel company. The company said Thursday that first-quarter 2013 earnings were 44 cents a share, beating Wall Street expectations of 42 cents a share, but 24% lower than the year before. Ann Taylor had previously announced weaker-than-expected first-quarter sales. "As previously noted, our first quarter performance reflected the impact of unseasonably cold weather, which negatively affected sales of warm weather product, primarily at LOFT," CEO Kay Krill said in Thursday's earnings release. "As a result, we were more promotional than planned to clear through inventory in advance of second quarter deliveries." However, "the onset of more seasonable weather in May resulted in positive comparable sales performance at both brands and in all channels for the month, and we are on track to achieve higher profitability and positive comp performance at both brands for the second quarter," Krill said. "Looking ahead, we are well-positioned to deliver another consecutive year of profitable growth for ANN INC., driven by the success of our strategic initiatives and strong performance at both brands." Other retail stocks that gained on Thursday: Fifth & Pacific (FNP ) shares rose 2.7% to $21.46 and Macy's (M) rose 2.2% to $48.39. -- Written by Laurie Kulikowski in New York. Follow @LKulikowski To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com. >To submit a news tip, email: firstname.lastname@example.org.
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