By  on July 24, 2008

A profit warning from Costco Wholesale Corp., and a double-digit drop in its shares, couldn’t keep retail stocks from their second consecutive day of advances.

With crude oil prices again experiencing a sharp drop Wednesday and settling at below $125 a barrel for the first time this month, the Standard & Poor’s Retail Index gained 8.4 points, or 2.4 percent, to finish the day at 360.98. As on Tuesday, the performance far outstripped advances for the Dow Jones Industrial Average (up 0.3 percent to 11,632.38) and the S&P 500 (up 0.4 percent to 1,282.18).

However, Costco’s warning that higher costs would cause it to miss its fourth-quarter profit estimates pulled its shares down 11.9 percent, to $63.43, and weighed down several of its low-cost competitors. Most notably, BJ’s Wholesale Club Inc.’s shares were off 9.5 percent to $36.89. Wal-Mart Stores Inc., owner of Sam’s Club, saw its stock decline 1.6 percent to $58.09. Off-pricers TJX Cos. Inc. and Ross Stores Inc. were down 2.9 percent and 1.3 percent, respectively, to $34 and $39.18.

Declines were generally relegated to low-cost retailers, who’ve outperformed the overall market throughout the recent months of economic turmoil.

For apparel retailers, however, gainers far outdistanced decliners. The Talbots Inc. saw its shares advance 11.3 percent, to $13.03, after a research note from Buckingham Research Group heaped praise on its holiday assortment, which the retailer has characterized as indicative of its move toward more updated, less dowdy fashion.

The comment helped to propel other specialty stores catering to mature women upward as well. Charming Shoppes Inc. rose 8.4 percent to $5.43; Coldwater Creek Inc. was up 4.4 percent to $7.18; The Dress Barn Inc. was up 4.1 percent to $15.25; Chico’s FAS Inc. rose 3 percent to $6.29; Christopher & Banks Corp. was up 2.6 percent to $8.60, and AnnTaylor Stores Corp. rose 2 percent to $24.65.

In the teen space, Abercrombie & Fitch Co. moved ahead 4.4 percent to $63.09 and Pacific Sunwear of California Inc. increased 4.4 percent to $8.98.�

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