By Andria Cheng
Retail stocks headed higher Thursday after encouraging
government data on housing starts and an unexpected decline in
initial jobless claims.
The S&P Retail Index (RLX) rose 0.6% to 384.59.
Shares of home-improvement retailers Home Depot Inc. (HD) and
Lowe's Cos. (LOW) rose after the Commerce Department reported
construction of new single-family homes and apartments accelerated
in August to the strongest pace in nine months, a further sign of
steady improvement in home building since the beginning of the
year.
However, Home Depot was off 2 cents in recent trading to $28.06,
while Lowe's remained higher, up 0.6% at $21.73.
Meanwhile, the Labor Department reported the number of people
filing for state unemployment benefits for the first time
unexpectedly fell 12,000 to a seasonally adjusted 545,000 last
week, the lowest since mid-July.
Home furnishings retailer Pier 1 Imports Inc. (PIR) shares rose
9.6% to $3.19 after it posted a smaller-than-expected fiscal
second-quarter loss. The company said its net loss narrowed to
$15.8 million, or 17 cents a share, from $30.2 million, or 34 cents
a share, a year earlier. Sales for the quarter ended Aug. 29 fell
10.6% to $286.7 million and comparable sales for the period were
down 7.6%. Analysts polled by FactSet were expecting a loss of 22
cents a share on sales of $281.9 million. The retailer said
merchandise margins improved to 52% from 49% due to reduced
markdown activity. Pier 1 said it's reached rental reduction
agreements on around 30% of its 1,061 stores, which should result
in total savings of around $11 million on a cash basis in fiscal
2010.
Home goods retailer Bed, Bath & Beyond Inc. (BBBY) climbed
3,3%.
Avon Products Inc. (AVP) said Thursday that President Elizabeth
Smith is leaving the direct seller of beauty products, effective
Oct. 30, to pursue her goal of becoming a chief executive. The
global business units reporting to Smith will now report directly
to Chief Executive Andrea Jung. Avon said it has no immediate plans
to replace Smith. Avon shares were down slightly.
-Andria Cheng; 415-439-6400; AskNewswires@dowjones.com
