Analyst: investors misread Casual Male

A Brean Murray, Carret analyst today said investors misunderstood a Casual Male Retail Group Inc. announcement last month, leading to an unwarranted drop in the stock.

On March 29, the Canton, Mass.-based men's clothing retailer said it expects the profit margin on its merchandise to strengthen by one percentage point. Brean Murray, Carret analyst Gary Giblen said investors mistakenly believe this means the company's gross profit margin will only improve that much.

Since that announcement, the stock has fallen almost 5 percent. But Giblen said merchandise profit margin is not the same thing as profit margin companywide. Casual Male Retail Group, which registered $467.5 million in sales through its retail stores last year, can further bolster profit margin through occupancy leverage from higher sales volume, he said.

Giblen said his $16 price target, which is 40 percent higher than the stock's close at $11.43 Thursday, is "readily attainable." (AP)