) to hold.
Analyst Stacy Pak says the stock is up 40% since the beginning of year, and has meaningfully outperformed both the market and the retail index. She notes an 11% drop in July same-store sales is well below estimates.
Pak sees significant earnings risk due to a slow start on back-to-school selling, a corresponding markdown, and inventory risks. She notes management lowered the high end of guidance for the second quarter to a range of 10 cents to 11 cents.
Pak cut the $1.25 fiscal 2004 (Jan.) earnings per share estimate to $1.19, and cut the $1.45 fiscal 2005 earnings per share estimate to $1.40. She also cut her $24 target to $19.