Report outlines potential outcomes for companies, industry NEW YORK, Nov. 27 /PRNewswire/ -- With the holidays on the horizon, Standard & Poor's Equity Research Services believes that retail sales will be weighed down by an array of economic concerns on consumers' minds, including continued housing weakness and high energy costs. S&P Equity Research forecasts holiday sales coming in under the 4.0% gains projected by the National Retail Federation (NRF), already down from the 4.6% increase in 2006, and the 4.8% ten-year average. At the same time, S&P says that the $924 per capita spending projected for consumers by the NRF could actually increase as online sales and gift card sales grow. These and other findings are available in S&P Equity Research's 2007 Holiday Retail Outlook and Stock Picks, published by Standard & Poor's, a leading provider of financial market intelligence. Standard & Poor Equity Research Services believes that 2007's numerous high-profile product recalls will hurt companies in the toys sub-industry, and that home furnishing companies may also struggle. However, restaurants may benefit from holiday promotions, and consumers' spending preferences may favor some luxury brands. Standard & Poor's Equity Research identifies many companies that have upside potential, along with stocks that may experience weak performance based on their current market position and exposure in its report. "There are a number of question marks for the economy right now that give us reason for pause in the retail sector," notes Marie Driscoll, Director of the Consumer Discretionary-Retail Group for Standard & Poor's Equity Research Services. "The full impact of declining house values and rising gas prices seems to have not yet reached the consumer. However, with continued business and market uncertainty and slowing economic growth, these issues may become hard to ignore, even for the indomitable American consumer, leading to the further erosion of consumer confidence and a decline in spending." While there appear to be many potential challenges ahead for the retail sector, Standard & Poor's Equity Research believes there are a number of companies well positioned for the upcoming period. Among those companies included in the report on which S&P Equity Research Services currently has a "Strong Buy" (5-STARS out of 5) recommendation entering this Holiday sales season are American Eagle Outfitters (NYSE:AEONYSE:$21), Abercrombie & Fitch (NYSE:ANFNYSE:$76), Best Buy (NYSE:BBYNYSE:$48), Coach (NYSE:COHNYSE:$35), Mattel (NYSE:MATNYSE:$21), McDonald's (NYSE:MCDNYSE:$57), Starbucks (NNM: SBUX, $22) and Tiffany (NYSE:TIFNYSE:$46). Retail analysts generally consider Christmas and Chanukah to be the biggest spending holidays, accounting for approximately 25% of GAFO (general merchandise, apparel, and other store) sales. S&P Economics sees GAFO sales rising 3% to 3.5% in the fourth quarter of 2007. The analyst quoted above is a Standard & Poor's equity analyst. She has no affiliation with any company she covers, nor any ownership interest in any companies she covers. About Standard & Poor's Equity Research Services As the world's largest producer of independent equity research, Standard & Poor's licenses its research to over 1,000 institutions for their investors and advisors, including 19 of the top 20 securities firms, 13 of the top 20 banks, and 11 of the top 20 life insurance companies. Standard & Poor's team of 120 experienced U.S., European and Asian equity analysts use a fundamental, bottom-up approach to assess a global universe of approximately 2,000 equities across more than 120 industries worldwide. Follow Standard & Poor's equity analysts' U.S. market commentary each day at http://www.equityresearch.standardandpoors.com/. The equity research reports and recommendations provided by Standard & Poor's Equity Research Services are performed separately from any other analytic activity of Standard & Poor's. Standard & Poor's Equity Research Services has no access to non-public information received by other units of Standard & Poor's. Standard & Poor's does not trade for its own account. The analytical and ethical conduct of Standard & Poor's equity analysts is governed by the firm's Research Objectivity Policy, a copy of which may also be found at http://www.standardandpoors.com/ or by clicking here. About Standard & Poor's Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 8,500 employees, including wholly owned affiliates, located in 22 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com/. DATASOURCE: Standard & Poor's CONTACT: Jeff Sexton, Communications, +1-212-438-3448, , of Standard & Poor's Web site: http://www.standardandpoors.com/ http://www.equityresearch.standardandpoors.com/

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