Article Excerpt:
TWST: Let's start with an overview of what you cover.Mr. Cox: I cover a variety of different subsectors of the hardlines retail universe. I cover auto parts retail, pet supply, home improvement, office supply retail, and then residential furniture including retail and the hybrid retail manufacturers, which I think probably fits the consumer durable profile the best.
TWST: If you look back at 2004, what segment did well and what lagged?
Mr. Cox: 2004 was a choppy year for hardlines retail. Retail stocks
overall performed well. Within my categories, pet supply retail was an
outperformer, and office supply retail performed well. Residential
furniture was a disappointing sector in 2004 for a variety of different
reasons, but weak consumer demand is what I would point to as the most
significant.
TWST: Let's start with the residential furniture since it was at the
bottom of the list. What were the key factors that hurt them in 2004?
Mr. Cox: I think the main driver was that demand for residential
furniture remained challenging and spotty at best. We had a strong
period early in the year and that really faded as the year progressed.
Coincidently, consumer confidence faded for the last five months of
2004, and I think consumer confidence has been a very strong indicator
of big ticket consumer durable purchases like residential furniture.
Tickers included in this excerpt: AAP, AZO, ETH, FBN, HVT, ODP, PETC, PETM, SPLS
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