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|  | FEBRUARY 11, 2005
 WORD ON THE STREET Lehman Cuts Sharper Image Estimates Analyst Scott Nesson says the specialty retailer lacks hot products to sustain sales and new products are not expected in stores until August Lehman cuts Sharper Image (SHRP ) estimates. Analyst Scott Nesson says the company's fiscal 2006 (ending January) guidance was well below Street estimates, based on its initial outlook for declining revenues and further margin compression. He says the company is citing lack of hot product assortment to sustain sales, declining Ionic Breeze contribution, gross margin compression, and de-leveraging of cost structure. Nesson doesn't see earnings per share recovery until the fourth quarter, with projected net loss for first 3 quarters of fiscal 2006. New products are in the works but not expected in stores until August. The company had forecast $1.22 fiscal 2006 earnings per share. He now sees 75 cents for fiscal 2006 and 88 cents for fiscal 2007. He rates the company at equal-weight.  All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report. Standard & Poor's Regulatory Disclosure Any advice, analysis, or recommendations contained in articles labeled "Insight from Standard & Poor's" reflect the views of Standard & Poor's, which operates separately from and independently of BusinessWeek Online. It is possible that BWOL may from time to time publish information that is not consistent with advice, analysis, or recommendations that are published by Standard & Poor's. Standard & Poor's and BusinessWeek Online are each units of The McGraw-Hill Companies, Inc.
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