Update Nov. 26, 2008: See all 2008 Black Friday deals.

This week, some apparel and accessory producers and retailers offer a look at how they've been doing between early summer's economic stimulus spending and the coming holiday season. While Polo Ralph Lauren Corp. (NYSE: RL) reported higher earnings last week, Coldwater Creek Inc. (NASDAQ: CWTR), Eddie Bauer Holdings Inc. (NASDAQ: EBHI), Kenneth Cole Productions Inc. (NYSE: KCP), and K-Swiss Inc. (NASDAQ: KSWS) all reported net losses as consumers pulled back on spending over the summer due to higher fuel prices and other economic worries. The expectations of analysts surveyed by Thomson Financial for such companies scheduled to report this week don't look much different; i.e., a bright spot or two among lower expectations overall.

Hip retailer Urban Outfitters Inc. (NASDAQ: URBN) is expected to post earnings 22.9% higher than a year ago, to $0.35 per share, on revenue of $475.9 million (+26.4%). The Philadelphia-based company already said that same-store sales in the quarter were 10% higher. Urban Outfitters has beat expectations in recent quarters, by 11.5% in the previous quarter, and analysts on average recommend buying URBN. Shares fell to a 52-week low of $16.61 per share on Friday, and are down 29.5% from a year ago. Other companies expected to report more modest earnings growth in the coming week include watch and accessory maker Fossil Inc. (NASDAQ: FOSL), retail giant Wal-Mart Stores Inc. (NYSE: WMT), and TJX Companies Inc. (NYSE: TJX), parent of such discount retail chains as T.J. Maxx and Marshalls. These three companies have tended to top analysts estimates in recent quarters, and Fossil and TJX ended the week near their 52-week lows.

While Los Angeles-based American Apparel Inc. (AMEX: APP) had a strong second quarter, the casual wear maker is expected to report $0.13 per share earnings for the third quarter, the same as in the year-ago period. And analysts anticipate that Kohl's Corp. (NYSE: KSS) will report that profits fell 16.4% to $0.51 per share on revenue of $3.9 billion (+1.9%). Though same-store sales for October fell 9%, the Menomonee Falls, Wis.-based company reaffirmed its third-quarter forecast. Kohl's has offered positive surprises in recent quarters, topping estimates by 5.6% in the previous quarter. The consensus recommendation remains to buy KSS. Shares have been climbing after reaching a 52-week low in late October, but are still down 32.8% from a year ago.

Shares of companies like Coach (NYSE: COH) were flying high when more people than ever were flocking to waste their money on stuff they couldn't afford.

Right at the top of the market, predictably, all the lower-end retailers thought they'd get into the act. Gap (NYSE: GPS)'s Banana Republic introduced a high-end line, and so did Coldwater Creek (NASDAQ: CWTR), Cache (NASDAQ: CACH) and AnnTaylor (NYSE: ANN). According to the Wall Street Journal (subscription required), the economic downturn gave the companies a strong rebuke. Cache is closing some of its Cache Luxe stores and Coldwater Creek is giving up on its high-end aspirations.

But I don't think it's the economic downturn that doomed these product launches. Luxury clothing is in a tough spot, but it's certainly fared a lot better than upper-middle market companies like Liz Claiborne (NYSE: LIZ) and Coldwater Creek. Rather, I think companies are using a pretty familiar tactic: blame failed strategies on the economy and minimize the impact of tactical errors made by seven-figure executives.

Here's why the strategy failed: taking a brand and raising the quality/price-point is extremely difficult. The reverse is easy, but trying to convince people to pay Coach-like prices for Banana Republic clothing -- even if it's of similar quality -- is a strategy that's destined to fail. Banana Republic has established itself at a certain price point and while people would be thrilled to get the brand at a lower price, most people willing to pay more will want a bona fide luxury label.

MOST NOTEWORTHY: BEA Systems, Nokia, Medco Health, Quest Diagnostics and PetSmart were today's noteworthy downgrades:

• Citigroup downgraded shares of BEA Systems (NASDAQ: BEAS) to Hold from Buy on valuation following the $17/share offer by Oracle (NASDAQ: ORCL) as they think a public bidding war for the company is unlikely.
  
• ABN Amro downgraded shares of Nokia Corporation (NYSE: NOK) to Hold from Buy on valuation and believes above consensus Q3 results are already priced into shares.
  
• Wachovia downgraded Medco Health Solutions (NYSE: MHS) to Market Perform from Outperform on valuation.
  
• The firm also downgraded Quest Diagnostics (NYSE: DGX) to Market Perform from Outperform, as they believe the prospects from stabilizing volumes and cost savings are reflected in valuation and Street estimates.
  
• Credit Suisse downgraded shares of PetSmart (NASDAQ: PETM) to Neutral from Outperform citing aggressive pricing at Petco, accelerating growth initiatives, limited visibility around expense management, and lack of consistent results.

OTHER DOWNGRADES:

• Methanex Corporation (NASDAQ: MEOH) was downgraded to Sector Underperformer from Sector Performer at CIBC.
  
• Rochdale downgraded Heico Corporation (NYSE: HEI) to Neutral from Buy.
  
• JP Morgan downgraded BankUnited Financial Corp (NASDAQ: BKUNA) to Neutral from Outperform and removed Qwest Communications (NYSE: Q) from its Focus List.
  
• Goldman removed MetLife (NYSE: MET) from its Conviction Buy List.
  
• Coldwater Creek (NASDAQ: CWTR) was downgraded to Hold from Buy at Standford and at Stifel.

Women's specialty apparel company Coldwater Creek Inc. (NASDAQ: CWTR) is drowning in bad numbers for its recent 2Q 2007 report. CEO Dennis Pence tried to spin the news by focusing on the fact that net sales were up 17% to $253.5 million. But always remember, it's not how much you sell, it's what you make on what you sell that is more important. By that measure, Coldwater Creek is floundering. Net income declined 27.6%. The company had to discount heavily in order to push sales. Comparable store sales were down 6% and stores reported overall lower count foot traffic. Fewer women are venturing into Coldwater Creek stores but internet sales were up almost 10%. In what seems like a counter-intuitive strategy, Coldwater Creek continues to open new store locations rather than improve the shopping experience for web customers.

In an effort to increase foot traffic and combine the physical store and the catalog marketing channels, Coldwater Creek will pay the shipping charges on any item a customer wants from the catalog but cannot find in a store location if she has the store order the item on her behalf. Once the item arrives at the store, the customer can choose to accept or reject. Again, the company will pay any return shipping charges. In addition to driving foot traffic, this program also helps with inventory control, leading to a 14% inventory decrease in retail locations. In addition to controlling inventory expenses, the company is also keeping a lid on administrative expenses, which increased a mere 1% since 2Q 2006. The increase was driven primarily by expenses related to opening new retail locations.

Coldwater Creek has no short or long-term borrowings. But investors have taken a beating since the beginning of the year when the stock traded at $24.39, reaching a high of $25.67 in June, only to lose 50% of its value so that it is now trading at $12.83. Coldwater Creek offers attractive stores staffed with knowledgeable saleswomen. The clothes are stylish, acceptable in all but very formal offices, reasonably priced and include a range of sizes to fit real women. And yet the stock continues to tank. CEO Pence offered no indication what Coldwater Creek will do to turn numbers around.

MOST NOTEWORTHY: Wal-Mart (WMT), Coldwater Creek (CWTR), Select Comfort (SCSS) and Anadys Pharma (ANDS) were today's noteworthy downgrades:

• Merrill downgraded Wal-Mart (NYSE: WMT) to Sell from Neutral citing expectations of margin erosion.

• Brean Murray cut Coldwater Creek (NASDAQ: CWTR) to Hold from Buy following their disappointing Q2 report and outlook.

• Select Comfort (NASDAQ: SCSS) was cut to Strong Sell from Hold at Matrix based on weak performance and high risk characteristics.

• Anadys Pharma (NASDAQ: ANDS) was downgraded to Neutral from Outperform at Cowen, citing pipeline setbacks over the last 12 months, and lack of near-term catalysts...

OTHER DOWNGRADES:

• Collective Brands (NYSE: PSS) was cut to Hold from Aggressive Buy.

• Sigma Designs (NASDAQ: SIGM) was cut to Hold from Buy at Needham.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: McAfee (MFE), Wabtec Corp (WAB), Pacific Sunwear (PSUN), Aeropostale (ARO) and Amdocs (DOX) were today's noteworthy initiations:

• McAfee Inc (NYSE: MFE) was initiated with an Accumulate rating at ThinkEquity, as the firm is positive on the company's competitive positioning in security, refocused business and streamlined operations.

• JP Morgan initiated shares of Wabtec Corp (NYSE: WAB) with an Overweight rating, as the firm believes Wabtec's strong market presence should support 22% and 12% EPS growth in 2007 and 2008.

• Nollenberger feels that the core PacSun concept is challenged to re-establish a niche in the competitive teen marketplace, and initiated shares of Pacific Sunwear (NASDAQ: PSUN) with a Neutral rating and $22 target.

• Nollenberger also initiated shares of Aeropostale (NYSE: AEO) with a Buy rating and $49 target and recommends buying the stock into back to school.

• Cantor initiated shares of Amdocs (NYSE: DOX) with a Hold rating and $37 target on valuation...

OTHER INITIATIONS:

• Midas, Inc (NYSE: MDS) and Monro Muffler Brake, Inc (NASDAQ: MNRO) were initiated with Neutral ratings at JP Morgan.

• JP Morgan also initiated shares of Greenbrier (NYSE: GBX) with a Neutral rating.

• Sterne Agee initiated shares of Colwater Creek (NASDAQ: CWTR) with a Buy rating.
  

• Vascular Solutions (NASDAQ: VASC) was initiated with an Outperform rating and $12 target at RBC Capital.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Quickly, now, name three states where upscale women's clothing retailers are headquartered. Was Idaho one of them? No? It should have been.

Coldwater Creek (NASDAQ: CWTR) is a specialty retailer of women's apparel, accessories, jewelry and gift items. The merchandise is directed toward the 35 and over group, through some 250 U.S. retail stores. The Sandpoint, Idaho firm also publishes four catalogs and operates a web site. Competitors include Jones Apparel Group (NYSE: JNY) and Liz Claiborne (NYSE: LIZ).

The firm pleased investors last week, when it reported Q1 EPS of 13 cents and revenues of $281.3 million. Analysts had been looking for 9 cents and $264.5 million. Management also boosted Y07 EPS guidance from 55-63 cents to 61-67 cents and FY07 revenues from $1.23-1.27 billion to $1.26-1.28 billion. Two Wall Street brokerages subsequently declared the stock a "strong buy" and three others called it a "buy".

Main market news here.

Coldwater Creek, Inc. (NASDAQ: CWTR) reported results that beat Wall Street predictions yesterday. For the quarter , Coldwater Creek earned $12 million, or 13 cents per share, compared with $11.6 million, or 12 cents per share, for the same quarter in 2006. Revenue surged 31% to $281.3 million. Analysts polled by Thomson Financial had expected a profit of 8 cents per share on $264.5 million in revenue. Shares are up nearly 12% in pre-market trading (7:43 a.m.).

Microsoft Corp. (NASDAQ: MSFT) unveiled its "Surface" computer, a coffee-table shaped computer that responds to touch and to special bar codes attached to everyday objects. The computers will arrive in November in T-Mobile USA stores and other casino properties. Surface is a Vista PC tucked behind a touchscreen that can respond to more than one touch at a time. Surface costs $5,000 to $10,000 per unit.

The New York Times published a report prepared last year by Wal-Mart Stores Inc.'s (NYSE: WMT) former advertising agency. The report says that some of the retailer's key strengths such as low prices and one-stop shopping were working against it in areas it wanted to grow in such as electronics, apparel, home decor and more.

Ford Motor Co. (NYSE: F) chief sales analyst George Pipas said the company would see an increase in U.S. retail sales in May for the first time in six months. Overall U.S. sales, however, are expected still to decline as a 20% reduction in sales to daily-rental companies would drag them down for a "single-digit" percentage decline.

Pfizer Inc. (NYSE: PFE):
- Nigerian officials have brought criminal charges against Pfizer, claiming the company is reponsible for the deaths of children who received an unapproved drug during a meningitis epidemic.
- After announced a 10,000 job cut in January, the layoffs have started at Pfizer, with the company planning to cut between 50 and 150 people in two-week cycles through the rest of the summer in its R&D facility in Ann Arbor.

Exxon Mobil Corp (NYSE: XOM) faces a shareholder vote on four investor-driven "green" proposals.

Fortune's Brent Schlender thinks that Apple Inc.'s (NASDAQ: AAPL) Apple TV $300 set-top box unveiled last October and shipped in at the end of February is a dud with several problems. This, Schlender says, may not bode well for the iPhone specifically or even Apple in general.

International Business Machines (NYSE: IBM) announced that it repurchased $12.5 billion of its outstanding common stock through accelerated share repurchase agreements, buying back 118.8 million shares, or 8% of the outstanding shares of common stock.

Unphased by a federal probe, Google Inc. (NASDAQ: GOOG) CEO said the company is open to new acquisitions, reiterating hopes to complete the DoubleClikc $3.1 billion purchase by year-end.

Last night after the closing bell, Coldwater Creek (NASDAQ: CWTR) released its earnings for the first quarter. Net income rose 4% at the women's apparel retailer, hitting $12 million, or 13 cents per share. Revenue, meanwhile, spiked 31% to $281.3 million. Both of these figures topped analysts' expectations; the consensus estimate called for per-share results of eight cents on $264.5 million in revenue.

Same-store sales were 7.3% higher, while total sales jumped 44% to $184.9 million. Catalog net sales were off 1.7%, but internet sales jumped up 18.5%.

CWTR shares surged in after-hours trading, jumping more than 13% to overcome the $23.50 mark. Should this move materialize in today's market action, it would effectively lift the stock to a new five-month high, closing the bear gap created in mid-January. A move above the 23 region would also force the shares above their 10-month and 20-month moving averages, trendlines that have acted as technical resistance during the past five months.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

MOST NOTEWORTHY: ColdWater Creek Inc (CWTR), Celadon Group, Inc (CLDN), Berry Petroleum Co (BRY), SiRF Technology Holdings Inc (SIRF) were today's noteworthy initiations:

• Brean Murray started shares of Coldwater Creek (NASDAQ: CWTR) with a Buy rating and $25 target, expecting second-half upside from new merchandise this year.

• Keybanc is positive on Celadon's (NASDAQ: CLDN) disciplined approach to strategic acquisitions and leverage in its operating model, starting shares with a Buy rating and $20 target.

• CRT Capital believes Berry Petroleum (NYSE: BRY) has the ability to continue to deliver double digit percentage production/reserves growth and started shares with a Buy rating and $40 target.

• American Technology believes SiRF Technology Holdings (NASDAQ: SIRF) will continue to be a market leader in GPS chipsets and finds the company's wireless business undervalued, starting shares with a Buy rating and $26 target...

OTHER INITIATIONS:

• Javelin Pharmaceuticals Inc (AMEX: JAV) was initiated with an Outperform rating at Leerink Swann.

• UBS started Arris Group, Inc (NASDAQ: ARRS) with a Buy rating and $18 target.

• Publicis Groupe (NYSE: PUB) was started with a Buy rating at ING.

• Thomas Weisel initiated shares of Ambassadors International (NASDAQ: AMIE) with an Overweight rating and $41 target. Baird started

• Capella Education Co (NASDAQ: CPLA) with an Outperform rating and $46 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Weyerhaeuser Co (WY), Jackson Hewitt Tax Service Inc (JTX), Hewlett-Packard Co (HPQ) and Coldwater Creek Inc (CWTR) were some of today's more noteworthy upgrades:

• UBS upgraded shares of Weyerhaeuser Co (NYSE: WY) to Neutral from Reduce citing the stock's recent weakness.

• Morgan Stanley upgraded shares of Jackson Hewitt Tax Service (NYSE: JTX) to Equal Weight from Underweight on valuation as the firm believes yesterday's sell-off was overdone.

• Hewlett-Packard Co (NYSE: HPQ) was upgraded to buy from Neutral at American Technology on valuation.

• Coldwater Creek (NASDAQ: CWTR) was upgraded to Buy from Neutral at Bank of America based on the company's favorable risk/reward.

OTHER UPGRADES:

• BB&T upgraded shares of Pacer International, Inc (NASDAQ: PACR) to Buy from Hold citing the company's operational changes and new $100M shares' repurchase.

• Goldman upgraded Spherion Corp (NYSE: SFN) to Neutral from Sell.

• SkyWest, Inc (NASDAQ: SKYW) was upgraded to Neutral from Underweight at Prudential.

• Bear Stearns upgraded shares of Sonic Corp (NASDAQ: SONC) to Outperform from Peer Perform on expectations of an acceleration in partner drive-in same store sales and system wide unit expansion.

• Citigroup upgraded Corinthian Colleges, Inc (NASDAQ: COCO) to Buy from Hold after a company visit as the firm believes expectations are finally low enough and recent initiatives are taking hold. Further, Citigroup believes takeover speculation will limit downside as their analysis suggests an LBO could work.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

aQuantive (NASDAQ:AQNT) was started in new coverage as Outperform at Credit Suisse.

Jabil (NYSE:JBL) was downgraded to Sector Perform at CIBC, cut to Peer Perform at Bear Stearns.

EMC (NYSE:EMC) and Network Appliances (NASDAQ:NTAP) were raised to Overweight at J.P.Morgan.

Palm (NASDAQ:PALM) cut to Reduce at UBS, cut to neutral at BofA; stock down 2% after earnings and no buyout.

A.G.Edwards started the video game sector in new coverage: Game makers Activision (NASDAQ:ATVI), Electronic Arts (NASDAQ:ERTS), and THQ Interactive (NASDAQ:THQI) were all started as Buy ratings, while Take-Two Interactive (NASDAQ:TTWO) & Midway (NYSE:MWY) were started as Hold. GameStop (NYSE:GME) was started as a HOLD rating in the retail end.

24/7 Wall St. full research summary.

Goldman Sachs notes: Coldwater Creek (NASDAQ:CWTR), Polo Ralph Lauren (NYSE:RL), and Urban Outfitters (NASDAQ:URBN) were all raised to Buy from Neutral. Liz Claiborne (NYSE:LIZ) was downgraded from Buy to Neutral. Goldman Sachs reiterated its Conviction Buy List on Coach (NYSE:COH) and maintained Buy ratings on Abercombie & Fitch (NYSE:ANF), Aeropostale (NYSE:ARO), and Nike (NYSE:NKE). Here is Goldman Sachs' full research summary.

Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.

MOST NOTEWORTHY: Endo Pharmaceuticals Holdings Inc (ENDP) and Coldwater Creek (CWTR) were today's most notable initiations:

• First Albany initiated Endo Pharmaceuticals Holdings Inc (NASDAQ: ENDP) with a Strong Buy rating and $41.25 target; the firm believes the company's strong balance sheet can be used to strengthen the pipeline through the acquisition of product rights or companies.

• Thomas Weisel started Coldwater Creek Inc (NASDQ: CWTR) with an Underperform rating based on the fourth-quarter miss, and believes appreciation could be limited here.

OTHER INITIATIONS:

• Yamana Gold Inc (NYSE: AUY) was initiated with a Sector Performer rating and $20 target at CIBC, explaining that Yamana's production profile is expected to expand by 150% in the next two years, making it one of the fastest-growing gold companies in North America.

• Oppenheimer considers PF Chang's China Bistro's (NASDAQ: PFCB) valuation attractive and started the restaurant chain with a Buy rating and $53 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Tween Brands (NYSE: TWB) is down over 3% on the day on two pieces of news:

1. Competitor Coldwater Creek (NASDAQ: CWTR) cut its fourth quarter EPS outlook citing slower-than-expected customer traffic throughout holiday season. Wachovia said this is "not" company specific and is indicative of the weaker women's retail environment.
2. Buckingham had cautious/negative comments on Tween Brands this morning. The firm advised remaining Neutral, citing a lack of clarity on the timing of improved apparel trend in the company's Limited TOO stores. January sales have not picked up as expected, prompting an unplanned "Buy 1 Get 1 at 50% off" markdown which could create additional downside to the firm's most recent 4Q06 EPS estimate.

On CNBC's MAD MONEY tonight, Cramer had another "Sell Block," where he reviewed stocks that should be sold. This is where he follows up on his wins and losses.

On Coldwater Creek (NASDAQ:CWTR), he slapped it and said he needs to eat crow. It's down 20% in after-hours because of an earnings warning. Here is what he originally said.

On Guess Inc (NYSE:GES), he thinks the stock deserved a triple-buy before, but it's time to take profits. At $53.95 on October 9, 2006 is where he first started calling it. If you own it, ring the register.

On XM Satellite Radio Holdings (NASDAQ:XMSR), the analyst upped it at $30 and cut it at $11; Cramer thought it was a buy before, but it's time to ring the register -- he thinks that there isn't upside here and the FCC flip-flop means it's time to ring the register. I noted this today because no one was commenting that the FCC could change its rule if it wanted to.

On Interpublic Group (NYSE:IPG), he said they barely skipped a beat on losing Wal-Mart Stores (NYSE:WMT) but it's time to sell it and take the 30% gain even if it can go up.

On Deere & Co (NYSE:DE), he said it was a buy in September, but he thinks it's time to sell. It's been looking secular and deserves the multiple, but they have to beat big-time to go over $108.00.

Jon C. Ogg