Cowen Analyst "Cautious" On '05

NEW YORK CITY-The home furnishings sector’s dip in performance last year was caused by a “distraction” from a strong fashion cycle, said Lauren Levitan, senior research analyst at SG Cowen & Co. yesterday during her company’s Consumer Conference here at the Westin New York at Times Square hotel. But the strong performance by some specialty apparel chains could also wane, she said.

“The first half is going to be challenging,” Levitan said of the year. Retailers could suffer from higher energy costs, less tax stimulus and higher interest rates. In addition, an ending fashion cycle and strong same-store sales comparisons could hurt the growth of fashion retailers.

Last year fashion retailers covered by Cowen posted an 18.6% jump in earnings per share, while home furnishings chains’ EPS dropped by 15%. A decrease in mortgage refinancing could have caused the fall in the home furnishings sector, Levitan said.