When you put a brand new flat-screen in your living room or bedroom, the old furniture becomes outdated. A lot of people are updating their furniture and decor to match the TV itself. We think is helping to fuel home furnishing sales.
In terms of market dynamics, there are many hands in the market share grab. Wal-Mart, Target and department store chains like J.C. Penney and Kohl's will see incremental dollars coming into home furnishing as well.
In the belief that this purveyor of authentic brands and unique styles will continue to deliver annual earnings growth of at least 30% helped by comp growth, new-store expansion, and operating margin gains, we reiterate our 'outperform' rating.
It is clear to us that a sale of the company is likely to occur in 2006. With business having improved on the margin, we believe Jill shares could likely command a slight premium to Liz Claiborne's original $18 offer.
Retailers may have struggled to clear through certain cold-weather seasonal items, perhaps resulting in deeper markdowns on those items.
We think 'home' fundamentals are tied to product cycles and not the housing cycles.
