Polo Ralph Lauren Corporation (NYSE: RL) is engaged in the design, marketing, and distribution of apparel, accessories, home furnishings and fragrances. These are offered under such brand names as Polo Ralph Lauren, Safari, Black Label, Club Monaco and Rugby. The company operates over 300 Ralph Lauren, Club Monaco, and Rugby retail stores, as well as a pair of e-commerce sites. Its products are also carried by upscale and mid-tier department stores. Macy's (NYSE: M) and Dillard's (NYSE: DDS) account for more than a third of all wholesale revenue. Jones Apparel Group (NYSE: JNY) and Liz Claiborne (NYSE: LIZ) are competitors.

The company pleased investors late last month, when it reported fiscal Q4 EPS of $1.00 and revenues of $1.24 billion. Analysts had been looking for 65 cents and $1.15 billion. Management also guided FY09 EPS to $3.95-$4.05 ($3.97 consensus). Needham subsequently reiterated its "buy" rating on the shares and boosted its price target to $79.

The stock popped on the news and then moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Altogether, brokers recommend the issue with four "buys", eight "holds" and one "sell". Analysts see a 15% growth rate, through the next year. The RL P/E ratio (16.26), PEG ratio (1.03), Price to Sales ratio (1.32), Price to Book ratio (2.70), Price to Cash Flow ratio (10.36), Price to Free Cash Flow ratio (14.06), Sales Growth rate (20.32%), EPS Growth rate (47.06%), Return on Assets (10.34%) and Return on Investment (12.77%) compare favorably with industry, sector and S&P 500 averages. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $50.51 and $102.58. A stop-loss of $57.00 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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MOST NOTEWORTHY:

• ComScore (NASDAQ: SCOR) was upgraded to Outperform from Perform at Oppenheimer to reflect the strong Q1 report and strong customer additions.
  
• Duke Realty (NYSE: DRE) was upgraded to Outperform from Market Perform at Wachovia upgraded based on valuation.
  
• Nordstrom (NYSE: JWN) was upgraded to Outperform from Neutral at Credit Suisse.
  
• Sun Healthcare (NASDAQ: SUNH) was upgraded to Outperform from Market Perform at Friedman Billings based on valuation and notes the Medicare rate cuts will be as drastic as feared.

• MedAssets (NASDAQ: MDAS) was upgraded to Buy from Neutral at Piper, which thinks the company's acquisition of Accuro will strengthen its revenue cycle management offering, and the firm believes the tight credit markets make the company's MedAssets a compelling product in the short-term. In addition, Piper notes that the company has recently had success with large hospital systems.
  
• Jones Apparel (NYSE: JNY) was upgraded to Buy from Neutral at Merrill citing sales expectations for the l.e.i. brand at Wal-Mart (NYSE: WMT) and margin improvements from leaner inventories.
  
• Affiliated Computer (NYSE: ACS) was upgraded to Buy from Hold at Jefferies based on valuation and expectations for better bookings.

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So I'm looking at Liz Claiborne (NYSE: LIZ) and its latest earnings report. I don't currently have a retailer in my portfolio, so I'm thinking to myself, hey, maybe I'll want to buy Liz after I check out its latest numbers. Well, that didn't happen.

Net sales (excluding discontinued operations) dropped 3% for the fourth quarter, and adjusted net income declined dramatically, coming in at $0.20 per diluted share -- last year at this time, the metric was over four times as big at $0.94. For the year, net sales dropped over 1% (excluding discontinued operations), and adjusted net income was $1.30 per diluted share -- yet another huge drop, considering that Liz Claiborne took in $2.99 per diluted share of adjusted net income in 2006. Oh, and there are other things here that will make any prospective investor shudder -- operational cash flow was down, the dividend was stagnant, and the margins weren't anything to write home about. And comps at some of the company's stores have been challenged (Juicy Couture, however, did report a strong 25% increase in comparable sales in the fourth quarter).

This was an easy one for me -- I'll stay away from Liz Claiborne. The company, which competes with the likes of Jones Apparel Group (NYSE: JNY) and Polo Ralph Lauren (NYSE: RL), currently exists in the land of strategic reviews, cost reductions, and discontinued operations. I don't want to travel to such a land with this particular business.

Disclosure: Steven Mallas owns none of the companies mentioned.

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Here are some highlights of this past week's earnings coverage from BloggingStocks:

• Applied Materials Inc. (NASDAQ: AMAT) first-quarter profits fell due to market conditions.
• Best Buy Inc. (NYSE: BBY) lowered its earnings forecast on declining sales.
• Campbell Soup Co. (NYSE: CPB) posted unexciting second-quarter results, but shares rose anyway.
• Chipotle Mexican Grill Inc. (NYSE: CMG) posted solid results but fell short of expecations.
• Comcast Corp. (NASDAQ: CMCSA) beat expectations and annouced it first dividend in a decade.
• Denny's Corp. (NASDAQ: DENN) fourth-quarter results were dragged down by the sale of restaurants.
• General Motors Corp. (NYSE: GM) posted a record loss and made a buyout offer to union employees.
• Hasbro Inc. (NYSE: HAS) post better-than-expected fourth-quarter results on popularity of the Transformers.
• Jones Apparel Group Inc. (NYSE: JNY) narrowed its loss in the fourth quarter as restructuring continued.
• Lions Gate Entertainment Corp. (NYSE: LGF) missed earnings estimates despite strong revenue growth.
• Marriott International Inc. (NYSE: MAR) profit fell on losses from discontinued operations.
• Molson Coors Brewing Co. (NYSE: TAP) beat estimates as profits rose 75%.
• PolyOne Corp. (NYSE: POL) beat expectations and raised its guidance.
• Schering-Plough Corp. (NYSE: SGP) beat expectations, excluding a charge for acquistion costs.
• UBS (NYSE: UBS) posted a big loss on write-downs due to the subprime crisis.
• VNUS Medical Technologies Inc. (NASDAQ: VNUS) beat expectations on strength overseas.
• World Wrestling Entertainment (NYSE: WWE) beat expectations despite weakness in its movie business.

Also, Jim Cramer defends his interest in GM after its record loss.

Upcoming results to watch for include Wal-Mart (NYSE: WMT), Hewlett-Packard (NYSE: HPQ), OfficeMax (NYSE: OMX), Whole Foods (NASDAQ: WFMI), MGM Mirage (NYSE: MGM), JCPenney (NYSE: JCP), and Safeway (NYSE: SWY).

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Jones, still executing its restructuring plan, said its fourth-quarter net loss narrowed to $89.8 million, or $1.06 per share, from $269.5 million, or $2.51 per share, last year. Without the gain on the sale of its high-end department-store chain, Barneys New York, and other costs, net income was nine cents per share, beating the seven cents per share analysts had been expecting.

Jones, which exited several lines during the quarter and along with the rest of the market suffered from weak holiday shopping season, posted a 17% decline in revenue to $838.5 million from $1.01 billion last year. Analysts expected revenue of $874.8 million. To get a better feel for the retailer's performance during the quarter, same-store sales fell 4.8%.

While the restructuring should be completed by the end of the year, according the company, and hopefully improve operations, Jones also guided 2008 earning in a wide range of $1.25 to $1.50 a share -- to reflect uncertainty in general economic conditions -- and well below analyst expectations of $1.53.

Jones apparel also announced of an agreement with Wal-Mart Stores Inc. (NYSE: WMT) where the discount retailer will begin carrying the l.e.i. brand for juniors, junior plus and girls in the summer.

Perhaps it was the agreement with Wal-Mart, or perhaps it was the overall sentiment about retail today, but Jones shares rallied in response. After hitting $17.15 earlier today, JNY shares are now (10:30 a.m.) trading around $16.30, up over 5.5%. Still, JNY shares are far off their 52-week high of $34.73 set in April of last year, but have also come off their low of $12.10 set late January.

Despite the share rally, I'd still be very cautious when it come to Jones Apparel. Sure, I myself am old fashioned when it comes to clothes (or maybe I'm just old) and can actually be found at Jones New York and Nine West, but despite the restructuring, I feel the brands are quite mature, representing little -- if any -- growth going forward.

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Doesn't it seem like another day where it is impossible to make money? We have earnings season without any sense that anybody's numbers can be raised. We have an ennui that comes from months of pounding and indecision, and we have stocks that can't seem to go up to save their lives.

Take retail and restaurants. Yet you can't help but wonder whether a Darden (NYSE: DRI) (Cramer's Take) or a Brinker (NYSE: EAT) (Cramer's Take) or a Coach (NYSE: COH) (Cramer's Take) or a Limited (NYSE: LTD) (Cramer's Take) can come back. You can't help but wonder if there's not an Urban Outfitters (NASDAQ: URBN) (Cramer's Take) out there that can turn around or a TJX (NYSE: TJX) (Cramer's Take) that can suddenly hold its own and start rising.

Can Ralph Lauren (NYSE: RL) (Cramer's Take) be that bad? Are J.C. Penney (NYSE: JCP) (Cramer's Take) and Kohl's (NYSE: KSS) (Cramer's Take) never coming back? Did Macy's (NYSE: M) (Cramer's Take) so shoot itself in the foot that it can't recover?

Lowe's (NYSE: LOW) (Cramer's Take)? Saks (NYSE: SKS) (Cramer's Take)? Bed Bath & Beyond (NASDAQ: BBBY) (Cramer's Take)? What about Liz Claiborne (NYSE: LIZ) (Cramer's Take) and Jones NY (NYSE: JNY) (Cramer's Take)?

Does anyone even know how vicious the bear market in these stocks is? Not all of these companies are brain-dead.

Or how about Morton's (NYSE: MRT) (Cramer's Take), Ruth's (NASDAQ: RUTH) (Cramer's Take), Ruby Tuesday (NYSE: RT) (Cramer's Take)? Can't they be worth something?

Ever since the collapse of private equity these stocks have declined pretty relentlessly. They have worn people down like you wouldn't believe.

But what happens in a turn? Shouldn't we think about putting on a basket of these? Maybe that Mortons/Ruth's/Ruby group?

Their balance sheets are almost all really strong. The consumer can come back. The earnings stream is there.

Costco (NASDAQ: COST) (Cramer's Take) isn't the only retailer in this country doing well, give or take Guess (NYSE: GES) (Cramer's Take) and J. Crew (NYSE: JCG) (Cramer's Take), Urban Outfitters (NASDAQ: URBN) (Cramer's Take) and TJX (NYSE: TJX) (Cramer's Take).

But the group has been gaffed and gutted. Somehow I think that some of these can come back. I know it's not gonna happen now. Too many questions. But when? When things turn you won't be able to buy these anywhere near where they are.

Yet, in a world where gasoline seems like it is marching to $4/gallon, where McDonald's (NYSE: MCD) (Cramer's Take), which I own for Action Alerts PLUS, can be crushed in a heartbeat and when gold's going to $1,000, the conventional wisdom of just forgetting this group seems to be playing out perfectly.

Yet, one has to wonder how a solid chain with good financials and good balance sheet simply can't be a buy soon, especially when it is just six months from lapping some really bad numbers.

What really weighs against it besides the consumer? Too many stores and restaurants. Until we see some closings, some trimmings, some shuttings and some bankruptcies, as we saw in 1990, I guess the operative wisdom is "Forget about it."

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long McDonald's.

RELATED LINKS:

• How to Outperform the Market and Manage Risk With ETFs
  
• When Herb Greenberg Guesses, It's Time to Worry
  

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Lots more quarterly reports rolled out this past week, and here are some highlights of earnings coverage from BloggingStocks:

• Alcatel-Lucent (NYSE: ALU) reported more losses and more job cuts.
• Alvarion Ltd.'s (NASDAQ: ALVR) record quarter fuels speculation of a Cisco (NYSE: CSCO) buyout.
• Avon Products Inc.'s (NYSE: AVP) profit rose 61%, buoyed by strength in emerging markets.
• Chevron Corp. (NYSE: CVX) fell short of expectations due to tighter margins.
• CIGNA Corp. (NYSE: CI) had a solid quarter but warned about 2008 earnings.
• Clorox Co. (NYSE: CLX) blamed profit loss on materals costs, and announced acquistion of Burt's Bees.
• Colgate-Palmolive Co. (NYSE: CL) beat estimates by a penny and had strong sales overseas.
• Crocs Inc. (NASDAQ: CROX) beat earnings estimates and revised its full-year forecast.
• Dell Inc. (NASDAQ: DELL) announced it would restate revenues, ahead of its November quarterly report.
• Exxon Mobil Corp. (NYSE: XOM) missed expectations, also due to tighter margins.
• Given Imaging Ltd. (NASDAQ: GIVN) cited FDA approval delays for disappointing results.
• Hertz Global Holdings Inc. (NYSE: HTZ) posted record revenues and appointed a new CFO.
• Humana Inc.'s (NYSE: HUM) positive surprise lifted the share price to a new all-time high.

• IAC/InterActiveCorp (NASDAQ: IACI) fell short of expectations, dragged down by the housing slump.
• International Paper Co.'s (NYSE: IP) revenue beat estimates, while earnings were in line with them.
• Jones Apparel Group Inc.'s (NYSE: JNY) earnings soared on one-time gains.
• KBR Inc. (NYSE: KBR) beat expectations due to one-time gains.
• Kellogg Co. (NYSE: K) beat expectations, in part on the strength of international sales.
• Kraft Foods Inc. (NYSE: KFT) citeed dairy costs and investments in its profit decline.
• MasterCard Inc.'s (NYSE: MA) profit soared 63% on cardholder spending in international markets.
• Newmont Mining Corp. (NYSE: NEM) easily beat estimates, sending the share price to a 52-week high.
• Procter & Gamble Co. (NYSE: PG) beat estimates by a penny and had strong sales overseas.
• Radio Shack Corp. (NYSE: RSH) beat expectations on earnings but not revenue.
• R.R. Donnelley & Sons Co. (NYSE: RRD) beat estimates and revised its guidance.
• Sirius Satellite Radio Inc. (NASDAQ: SIRI) reported a smaller-than-expected loss, strong subscriber growth.
• Sprint Nextel Corp. (NYSE: S) stumbled in Q3 on management and merger issues.
• TEVA Pharmaceutical's (NASDAQ: TEVA) strong margins helped it beat expectations by a penny.
• Toshiba Corp.'s (OTC: TOSBF) profit soared due to increased sales of flash memory chips.
• Trump Entertainment Resorts Inc. (NASDAQ: TRMP) announced higher profit on lower costs.
• Under Armour Inc. (NYSE: UA) beat expectations and offered revised guidance.
• U.S. Steel Corp, (NYSE: X) blamed its poor results on acquisitions costs and Chinese imports.
• Verizon Communications (NYSE: VZ) reported a profit loss, based on tax-related charges.

Jim Cramer isn't buying the excuses that Comcast Corp. (NASDAQ: CMCSA) and Coach Inc. (NYSE: COH) offered in their recent quarterly reports. One expert is more impressed with Intel Corp.'s (NASDAQ: INTC) results than with Microsoft Corp.'s (NASDAQ: MSFT). And Zac Bissonnette points to the importance of questioning too-good-to-be-true results.

Upcoming results to watch for include: Archer Daniels Midland Co. (NYSE: ADM), Cisco Systems Inc. (NASDAQ: CSCO), General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F), Time Warner Inc. (NYSE: TWX), News Corp. (NYSE: NWS), Walt Disney Co. (NYSE: DIS), Burger King Holdings Inc. (NYSE: BKC), and Qualcomm Inc. (NASDAQ: QCOM).

Visit AOL Money & Finance for more earnings coverage.

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After hitting a one-year high of $35.54 in January, the stock fell to a 52-week low of $16.73 in August. JNY opened this morning at $22.94. So far today the stock has hit a low of $19.70 and a high of $23.08. As of 10:35, JNY is trading at $20.07, up $0.37 (1.9%). The chart for JNY looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $17.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just 3 months as long as JNY is above $17.50 at January expiration. Jones would have to fall by more than 13% before we would start to lose money.

JNY hasn't been below $17.50 by more than a few cents in the past year and has shown support around $18.50 recently. This trade could be risky if the weakening economy puts a damper on consumer spending through the holiday season, but even if that happens, this position could be protected by strong support it has found around $17, where the stock has bottomed twice in the past 3 months.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: At publication time, Brent neither owns nor controls positions in JNY.

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MOST NOTEWORTHY:

• Radian Group (NYSE: RDN) was downgraded to Hold from Buy with a $23 target at Citigroup on concerns over the company's potential merger with MGIC Investment (MTG).

• Heelys (NASDAQ: HLYS) was downgraded to Neutral from Outperform at Baird, to Hold from Buy at Brean Murray, to Neutral from Overweight at JP Morgan, to Sector Performer from Outperformer at CIBC and to Market Perform from Outperform at Wachovia following the company's FY07 guidance which was well below the consensus.

• Sonus Networks (NASDAQ: SONS) was downgraded to Sell from Neutral at Merriman, as the firm believes there are a number of concerns that are not reflected in shares, including a flat N-T revenue outlook, a cut in 700bp in gross margins and a sharp uptick in receivable days, among other things.

• LeapWireless (NASDAQ: LEAP) and MetroPCS were both downgraded to Hold from Buy at Citigroup, as they believe the break in subscriber momentum will last for 6-9 months. Wachovia downgraded Leap Wireless to Market Perform from Outperform citing mixed Q2 results and weak Q3 guidance.

• UBS removed Coca-Cola (NYSE: KO) and Coach (NYSE: COH) from its Strategic Stock Selection List.

• Jones Apparel (NYSE: JNY) was downgraded to Sell from Neutral at Merrill Lynch.

• CBRE Realty (NYSE: CBF) and Dick's Sporting Goods (NYSE: DKS) were downgraded to Hold from Buy at Citigroup.

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MOST NOTEWORTHY:

• ABN Amro upgraded British Airways (OTC: BAIRY) to Hold from Sell on valuation.

• Friedman Billings believes Symantec's (NASDAQ: SYMC) fundamentals are about to show significant improvement over the next year and upgraded shares to Outperform from Market Perform.

• JP Morgan raised OfficeMax (NYSE: OMX) shares to Overweight from Neutral on valuation.

• Qwest (NYSE: Q) was upgraded to Sector Outperformer from Sector Performer, expecting revenue growth to be driven by the improving enterprise business. JP Morgan added Qwest to its Focus List.
  

• Metlife (NYSE: MET) was upgraded to Buy from Neutral at Merrill, based on valuation...
  

• ValueClick (NASDAQ: VCLK) was upgraded to Sector Perform from Underperform at Pacific Crest.

• Penn West (NYSE: PWE) was upgraded to Sector Perform from Underperform at RBC Capital.

• Friedman Billings upgraded Cubic (AMEX: CUB) to Market Perform from Underperform.

• Morgan Stanley upgraded shares of Jones Apparel (NYSE: JNY) to Equal Weight from Underweight.

• Broadcom (NASDAQ: BRCM) was raised to Sector Outperformer from Sector Performer at CIBC.

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The market spent most of the day in the red, but shot up in the last hour to close in the green. The NYSE had volume of 4.1 billion shares with 1,398 shares advancing while 1,906 declined for a gain of 18.55 points to close at 9,573.05. On the NASDAQ, 2.9 billion shares traded, 1,263 advanced and 1,810 declined for a gain of 7.6 to 2,553.87.

Jones Apparel Group (NYSE: JNY) plummeted $3.10 (-12%) to $21.86 after a second quarter net loss. Chipotle Mexican Grill (NYSE: CMG) rose $10.85 (12%) to $99.19 as second quarter profit doubled. Trump Entertainment Resorts (NASDAQ: TRMP) lost $0.48 (-7%) to $6.22. OfficeMax Incorporated (NYSE: OMX) gained $2.23 (7%) to $35.11 on a small increase in net profit.

In options there were 9.0 million puts and 7.2 million calls traded for a put/call open interest ratio of 1.25. Bristol-Myers Squibb (NYSE: BMY) saw heavy volume on the December 32.50 calls (BMYLZ) with over 52,000 options trading. ALCOA Inc. (NYSE: AA) saw heavy volume on the August 47.50 calls (AAHW) with over 35,000 options trading. Valero Energy (NYSE: VLO) saw heavy volume on the August 75 calls (ZPYHO) with over 34,000 options trading. General Motors Corp. (NYSE: GM) saw heavy volume on the September 32.50 puts (GMUZ) with over 53,000 options trading.

The CBOE S&P 500 Volatility Index (NASDAQ: $VIX) saw heavy volume on the August 25 calls (VIXHE) with over 55,000 options trading. The CBOE Volatility Index is a measure of option volatility and effectively a fear index of the market. The VIX jumped from 15.00 area in the beginning of July to a recent reading of 23.67 (see chart). The index being up indicates that there is still fear in the market. The heavy call option activity at the 25 strike represents a bet that fear will increase or a large insurance policy against further market downturns.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

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It has been a tough start of the day for Jones Apparel Group (NYSE: JNY) after reporting an unexpected second quarter loss this morning. The stock fell sharply this morning, setting a new 52-week low.

Analysts had expected a profit of $0.31 per share, and were stunned by the loss of $0.44 per share. Excluding some special items, the company earned $0.17 per share, marking the second straight quarter that the company has failed to meet estimates.

The company blamed its poor performance on a tough retail market, which led to weak same stores sales. The troubles that the retail market created forced Jones to slash many of its prices just to get some of its excess inventory out the door.

Also making news this morning was the company's decision to sell its subsidiary Barneys New York Inc. The company has accepted a $900 million offer from Fast Retailing. Jones bought Barneys New York, a chain of upscale department stores, for $400 million.

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Istithmar has competition in its quest to acquire Barneys from the Jones Apparel Group (NYSE: JNY). Japan's Fast Retailing Co has come forward with a $900 million bid, $75 million more than Jones had agreed to sell the unit for to the Dubai-based investment group.

Jones says it will begin talks with Fast Retailing. According to the Associated Press, "Headquartered in the western prefecture of Yamaguchi, Fast Retailing Co. operates the popular casual clothing chain Uniqlo. The retailer has expanded aggressively overseas, in such markets as Britain and continental Asia, with ambitions to challenge U.S.-based Gap Inc. It opened its global flagship Uniqlo store in New York City last September."

This should be interesting to follow, as investors from Japan and Dubai are battling for Barneys New York. Fast Retailing's offer is about 9% better than the agreement with Istithmar, and could lead to higher valuations for other high-end department stores like Bloomingdales, owned by Macys (NYSE: M).

Shares of Jones New York are up about 5% in pre-market trading.

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