Cowen Group's Retail Analyst Discusses Kohl's And L Brands

Most retailers came out with better-than-expected numbers this earnings season and one important factor that fueled that, according to Cowen Group retail analyst Oliver Chen was lower fuel prices.

Chen was on CNBC Thursday to discuss the outlook for the overall retail sector and share his views on Kohl's Corporation (NYSE: KSS) and L Brands Inc (NYSE: LB)

“What we are seeing is traffic is back in the stores, gas prices have positively impacted consumers' pockets and that's coming back,” Chen said.

“So, Wal-Mart, Target – they have had the best traffic in two years, and that's a really great thing as the consumer kind of retraces and comes back to the stores.”

Kohl's

In speaking specifically about Kohl's, Chen said, “They had a great call this morning.”

He continued, “We were just on the phone with Kohl's. Their loyalty program, Beauty, as well as just their focus on national brands and athleticism – it's really working for that company.

“We do have a Market Perform in the stock; we think the value is fair at this level.

“We really acknowledge a lot of their strategy and what they are trying to do with the business in terms of what they call the ‘Greatness Agenda’ are taking hold.”

Related Link: UPDATE: Kohl's Q4 Profit Beats Expectations, Lifts Dividend

L Brands

When discussing L Brands, Chen said, “It's been an exciting story, because intimate apparel is a great category to be in.”

He continued, “They also have Bath & Body Works. So, the market share they have; the global story.

“Also, a big theme for us is giving money back to shareholders – special dividends, free cash flow, repurchases. It's just a legendary team executing with very clean inventories.”