By Andria Cheng
Most retail stocks were lower Thursday, although Guess Inc.
(GES) and Genesco Inc. (GCO) shares traded higher after the
companies reported better than expected second-quarter financial
results.
Setting the trading tone, economic data from the Labor
Department showed that initial U.S. jobless claims declined last
week, in line with economists' expectations that the labor market
seems to be slowly stabilizing. Separately, the latest reading of
U.S. gross domestic product from the Commerce Department confirmed
that the economy contracted less than expected in the second
quarter.
Job growth remains key to spurring consumer spending and
sentiment, analysts said.
Against this backdrop, the S&P Retail Index was down nearly
1% to 367.10 recently.
Shares of American Eagle Outfitters Inc. (AEO) fell 1.8% to
$14.33 after the company's second-quarter profit came in 1 cent shy
of estimates, according to FactSet Research, and its earnings
outlook may also fall short of expectations.
The teen-clothing retailer reported a profit of $28.6 million,
or 14 cents a share, down from $59.8 million, or 29 cents, earned
in the year-earlier second quarter.
Sales in the three months ended Aug. 1 fell to $657.6 million
from $688.8 million. Comparable-store sales dropped 10%.
American Eagle expects a profit of 22 cents to 25 cents a share
in the third quarter, a projection that includes a 5-cent tax
benefit. American Eagle had been expected to earn 15 cents a share,
on average, in the second quarter and is pegged to show a profit of
24 cents for the third quarter, according to estimates compiled by
FactSet.
Shares of Genesco jumped 11.8% to $23.26. The shoe retailer's
second-quarter loss narrowed to $2.7 million, or 13 cents a share,
from $10.8 million, or 58 cents, a year earlier. Excluding
asset-impairment charges and other unusual items, the company said
it would have lost 2 cents a share.
Analysts had estimated the owner of Journeys and Johnston &
Murphy stores would lose 4 cents a share, according to analysts
reporting to FactSet.
Genesco's sales in the quarter ended Aug. 1 fell to $334.7
million from $353.1 million. Comparable-store sales fell 8%.
However, the company said business has improved in August, with
comparable sales through Aug. 24 down by 4%. It also sees positive
same-store sales in the fourth quarter.
Genesco said it's maintaining a profit forecast of $1.70 to
$1.80 a share for the year.
Shares of Guess rose 8.3% to $34.83. The clothing retailer said
late Wednesday that its board has approved a 25% increase in its
quarterly dividend to 12.5 cents a share, payable on Sept. 25 to
shareholders of record as of Sept. 9.
Second-quarter profit rose to $59.6 million, or 64 cents a
share, from $53.8 million or 56 cents, in the year-earlier period.
Revenue including royalties increased 1.4% to $522.4 million.
Earnings for Guess were aided by business in Europe, the company
said. The quarterly profit per share topped expectations of 43
cents, according to a FactSet survey of analysts' forecasts.
Trading lower, shares of Sears Holdings Corp. (SHLD) fell 1.2%
to $64.56.
The department-store operator, which also owns Kmart discount
stores, said it's debuting beauty departments, selling items from
cosmetics to fragrance, in 13 retail mall locations in Chicago, Los
Angeles and New York.
-Andria Cheng; 415-439-6400; AskNewswires@dowjones.com