Billabong International Recommendation change Billabong’s largest customer, US retailer Pacific Sunwear, announced sales for July of US$83.7m, up 24.0% on the previous corresponding period. Same store sales grew 14.4%. This was another month of very strong sales growth for Pacific Sunwear, underlining the current strength of the surfwear category in the US. We are forecasting 2004 financial year US sales growth for Billabong of 25% in originating currency, 10% after translating to A$. Early last week we reduced our short term recommendation on Billabong to Hold. Since then, the stock had fallen more than 8%. Therefore, with a $7.00 per share valuation, we have lifted our short term recommendation back to Buy. The US surfwear market clearly remains strong, which s hould address investor concerns regarding the growth momentum for this market. ASX Code: BBG Share Price: $6.37 Short term: Buy Long term: Buy Volatility index: High
BBG Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held