Cowen analysts say there is growth potential at the 48-store Bebe Sport, which is slated to have 59 stores by the end of the retailer's fiscal year. They also expect more openings of the company's 189-store namesake chain, as well as expansions of units in that chain to accommodate a larger product assortment.
Cowen's upgrade was given despite Bebe's slower-than-expected recent sales. Same-store sales rose 4% in December year over year due to a slowdown in the final weeks of the month.
The firm is optimistic about Bebe's growing consumer-loyalty program, and its extension multi-channel sales as well. Additionally, Cowen likes the rollout of the higher-priced Collection Bebe in more stores as well as a growing intimates line.
Analysts are also optimistic about the retailer's spring season. "We believe January clearance initiatives have been successful to date and expect that early reads on new spring collections, which have been flowing into stores, have been favorable," Cowen's report says.
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