) to neutral from overweight, citing the company's recently announced quarterly results.
Analyst Brian Tunick said the company's deceleration in sales and margins, which began in September, has worsened as October comparables are now expected to be up in the low single digits. Tunick says that after two years of unbelieveably strong trends, the company seems to be the victim of its own success, and is now on the wrong side of his "S" curve. Given the company's higher spending on marketing and more aggressive inventory stance, Tunick thinks the ongoing fashion issue could well result in the company missing Street estimates. He cut his 89 cents fiscal year 2006 (ending June) earnings per share estimate to 76 cents.