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NEW YORK-Alan Rifkin, retail hard-lines analyst with Lehman Bros., based here, is maintaining a bullish outlook for the home goods retailers on his radar.

In a report issued last week, Rifkin has Bed Bath & Beyond, Cost Plus, Pier 1 Imports, Lowe's and Tiffany with "Buy" ratings. Moreover, the analyst tagged Linens 'n Things, Home Depot and Best Buy with "Strong Buy" ratings.

For Bed Bath & Beyond, Rifkin said the retailer "continues to post the strongest sales gain within our specialty retail hard-lines coverage."

Last month, the specialty retailer was added to Lehman Bros.' list of "10 Uncommon Values," which represents the best of the equity firms' stock-picking efforts. And it has done that by beating the "S&P 500 over 70 percent of the time, delivering an annual return of 15.7 percent," said Rifkin.

For the second quarter, the earnings per share consensus is in line with Bed Bath & Beyond's forecast of 18 cents. Rifkin is calling for sustained growth in the long term, which is due to the retailer's plans of growing square footage by 25 percent by 2002.

Over at Cost Plus, Rifkin sees "solid yet manageable square-footage growth." He said in the report he's "confident that having opened 24 stores in 2000 for a 23 percent increase in total square footage, Cost Plus' management team can continue to accelerate square footage in 2001."

For Pier 1 Imports, Rifkin holds a similar view regarding growth as well as the ability of the company to continue adding stores and maintain double-digit return on equity.

At Linens 'n Things, Rifkin reiterated his view that the retailer can significantly benefit from the Chapter 11 and Chapter 7 bankruptcy filings of retailers such as HomePlace, Strouds, Lechters and Wards, which represent a potential revenue gain of $200 million to $250 million.

"In addition, we believe an 8 percent operating margin is achievable longer term, a significant increase from the 6.8 percent in 2000," he said.
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Author:Zaczkiewicz, Arthur
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Date:Aug 13, 2001

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