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It's no small leap to rely, at least partly, on Environment Canada and the Farmer's Almanac, which are both forecasting a relatively warm winter, to make a market call. But Raymond James analyst Andy Nasr downgraded sporting goods retailer Forzani Group Ltd. on the strength of the loonie and climatology, which he says should adversely impact same-store-sales in the third quarter of fiscal 2008 and gross margins during the next 12-to-18 months. He took Forzani down to "market perform" from "outperform," along with his six-to-12 month price target down to $20 from $26. The stock has dropped more than 3 per cent to $17.24 on the TSX Tuesday morning. Macro-economically speaking, though, he figures Forzani will ultimately have to reduce prices due to the strength of the Canadian dollar because nearly 90 per cent of the company's products are purchased from international subsidiaries. Forzani "will bear the impact of price reductions if it is unable to recoup price concessions from its suppliers," he writes. Moreover, with consumers clamouring for lower prices, he has adjusted his estimates to reflect lower margins because of price reductions, which will likely absorb Forzani's "precision retailing and margin improvement initiatives."

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