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Takeaway: Removing JWN from our long bench with the company guiding flat earnings in 2015 and the stock at 20x P/E.

COMPANY HIGHLIGHTS

JWN - 4Q14 Earnings: Removing From Long Bench

Takeaway: We added JWN to our long bench on 10/16 following our Department Store Black Book. There are a lot of things to like about the name: e-commerce proficiency, brand portfolio, and square footage growth. But, we couldn’t get comfortable with the fact that it was operating in a space that has grown at a -2% CAGR over the past 20 years and needs to see 93mm square feet not just close, but exit the industry all together over the next 5 years. Since that time, the stock is up about 11%, in-line with the S&P. Now the company is guiding the mid-point of the earnings range to flat on 8% revenue growth. Either the company is sandbagging or this name is uninvestable trading up here at 20x next year's earnings. We're removing it from the long bench.

Retail Callouts (2/20): JWN, Ports, ANN, VFC, BBY - 2 20 chart1

Retail Callouts (2/20): JWN, Ports, ANN, VFC, BBY - 2 20 chart2

OTHER NEWS

Report: West Coast ports running at 50%-60% of capacity; retailers stockpile inventory

(http://www.chainstoreage.com/article/report-west-coast-ports-running-50-60-capacity-retailers-stockpile-inventory)

ANN - Ann Taylor Parent Said to Be Working With JPMorgan on Sale

(http://www.wwd.com/retail-news/designer-luxury/ann-taylor-parent-said-to-be-working-with-jpmorgan-on-sale-8209436?module=Business-latest)

VFC - VF Settles ITC Laser Denim Case

(http://www.wwd.com/business-news/government-trade/vf-settles-itc-laser-denim-case-8205968?module=Business-latest)

KORS - Report: Michael Kors joins Snapchat

(http://www.chainstoreage.com/article/report-michael-kors-joins-snapchat)

BBY - Best Buy adds Curbside app service in Bay Area stores

(http://www.chainstoreage.com/article/best-buy-adds-curbside-app-service-bay-area-stores)

H2O Plus Names Joy Chen CEO

(http://www.wwd.com/beauty-industry-news/people/h2o-plus-names-joy-chen-ceo-8205148?module=Business-latest)