TJX gets upgrade, GIII soars while Abercrombie struggles

Shares of US apparel and home goods company TJX Cos. (TJX) climbed up by 1.35 percent to 66.12 US dollars yesterday after the discount retailer was added to the "conviction" buy list at Goldman Sachs and upgraded to "buy" from "neutral" this morning.

Despite a weak third quarter, which analysts see as an abberation, TJX has seen good revenue growth and is in a solid financial position with reasonable debt levels. It witnessed an increase in stock price during the past year and notable return on equity. According to Goldman Sachs, TJX has an "under-appreciated international presence" and has raised its price target on shares from 71 US dollars to 78 US dollars.

After posting upbeat results for the third quarter, New York-based sportswear maker GIII Apparel Group (GIII) soared on Wednesday, trading at 95.43 US dollars in the afternoon, up by 13 percent, after which Wunderlich Securities raised its price target from 100 US dollars to 105 US dollars and maintained a "buy" rating.

US teen retailer Abercrombie & Fitch (ANF) saw sales decline by 11.5 percent on Wednesday to 911.5 million US dollars, thus under the 916 million US dollars analysts were expecting. Third-quarter earnings fell by 19 percent to 42 cents per share, which was still higher than analysts' expectation of 41 cents.

The company lowered its full-year earnings outlook to 1.50 to 1.65 US dollars per share, down from its previous guidance of 2.15 to 2.35 US dollars. Analysts are expecting 1.75 US dollars. Abercrombie and fellow young apparel retailers American Eagle Outfitters (AEO) and Aeropostale (ARO) are struggling to compete with fast fashion from European chains like H&M and Zara as "teens want unique trendy pieces, not T-shirts with large logos" according to Investor's Business Daily.

Last but not least, Intel Corp. announced its "multiyear R&D collaboration" with Luxottica Group SpA on Wednesday to produce smart eyewear, which is another foray of the semiconductor giant into wearable tech. The first product is supposed to be launched in 2015.

This news is particular interesting in view of the report by the Wall Street Journal a few days ago that Google is planning to use Intel chips in its next version of Google Glass. If Intel is working with both Google and Luxoticca, then the future could be Google Glass in a range of stylish frames.