2142 GMT [Dow Jones] The U.S. retail slowdown hurt surfwear...

2142 GMT [Dow Jones] The U.S. retail slowdown hurt surfwear retailer Billabong International (BBG.AU) in the first half of its financial year, but there were enough positives in the result for Canaccord Genuity to upgrade its earnings outlook for FY16 and FY17.

Sales of the company's three main brands--Billabong, RVCA and Element--increased in all regions, suggesting that inventory and planning improvements are having an effect. Also, Canaccord noted that the cost of doing business as a percentage of revenue was 160 basis points better in 1H, partly cushioning the impact of lower margins.

"The key changes to our forecasts are revenue up 3.1% in FY16 and a 3.5% increase in ebitda for FY16," Canaccord says. "In FY17, revenue is 2.3% higher and ebitda has been increased 0.9%, with Europe and Australia offsetting a slightly lower Americas contribution."

Canaccord lifts its price target by 9.1% to A$2.99/share, and retains a buy call.

While UBS have cut their target for BBG to $1.65