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CNBC PRO Talks

Exclusive PRO Talks: Dana Telsey on the future of retail, her favorite stock ideas

Veteran retail analyst Dana Telsey shared her thoughts on the future of the sector and revealed her favorite stock picks in an exclusive interview for CNBC PRO with Mike Santoli.

On Amazon's affect on the sector: "I think one of the things you can see is that brand names matter. And brands being able to control their own destiny whether through their own online site, whether through their own physical stores can certainly be different than selling to a wholesale customer. Amazon, at the end of the day, is another wholesale customer," Telsey said.

"I think we're going to see a change over the next five years in how they integrate and interact with the retail world," she added.

On off-price apparel retailers: "You're talking about Ross stores, you're talking about Burlington, you're talking TJX. And what have we seen? We saw very good same-store sales out of these players in the second quarter. And their same-store sales are driven by traffic: It's rare these days to see companies having their same-stores sales being driven by traffic."

Telsey also shared her favorite retail stock picks.

"[We] like the LULU story, I think it's men and women, the fact that it's brand-enhancing, that it's sold only in its own store, it's growth online, growing globally, and has a very loyal customer," she said.

"I think on the department store side, Nordstorm and Kohl's are interesting … You've seen improvements at Kohl's, you've seen improvements in the same-store sales, you've seen brands go in their portfolio and now they're taking a look at their store base to optimize and remodel some of their existing stores."

Telsey is the CEO and chief research officer of Telsey Advisory Group. Before founding her firm, she worked at Bear Stearns covering the retail sector as a senior managing director. In 2016, Telsey won the Thomson Reuters award as the top stock picker for multi-line retail. She is a 13-year member of Institutional Investor Magazine's All-America research team, where she was ranked the top specialty stores analyst for seven consecutive years.

She also discusses:

  • The future of malls and anchor stores like Macy's.
  • Second-quarter earnings and stock reactions.
  • The 2017 holiday outlook.

The interview is exclusively for CNBC PRO subscribers.