Investors’ worst fears about retailers’ first-quarter earnings weren’t realized, sending the sectors shares up despite ample evidence of difficult conditions in the sector.
The S&P 500 Retailing Industry Group logged a 0.5 percent increase to end the day, better than either the Dow Jones Industrial Average’s 0.1 percent upward move to 16,543.08 or the S&P 500’s 0.2 percent uptick to 1,892.49.
Despite a wider first-quarter loss, Sears Holdings Corp.’s shares moved ahead 4.2 percent to $38.10, most likely on moderate in the improvement in U.S. same-store sales, which dropped 1 percent. Shares of The Bon-Ton Stores Inc. rose 5.3 percent to $11.20 as its loss for the quarter expanded while it reaffirmed full-year guidance. Stein Mart Inc. profits matched analysts’ consensus estimates on higher net and same-store sales, sending its shares up 5.2 percent to $13.70.
Gap Inc. reported a 21.9 percent decline in profits for the quarter, but that was enough to beat estimates by 1 cent as it reported results after the close of the equity markets. Shares added 0.7 percent to close at $40.86 but added another 0.4 percent in after-hours trading following the earnings report.
However, Aéropostale Inc., arguably the hardest hit of stores in the troubled teen sector, reported double-digit declines in net and comp sales despite reporting a wider loss that was smaller than analysts had projected. Shares gained 1.8 percent to $4.52 prior to the closing bell but tumbled 16.2 percent to $3.79 following the post-market earnings report, which also provided guidance below Wall Street’s view.
The strongest gain among the U.S.-based fashion, retail and beauty stocks tracked by WWD came from Perry Ellis International Inc., shares of which gained 15.3 percent to $17.05. Quarterly results exceeded consensus views and the company raised its expectations for the full year.
Among 18 companies in the WWD sample with declines, the largest belonged to Zale Corp., off 3.8 percent to $21.83, after Institutional Shareholder Services recommended that stockholders vote in favor of its acquisition, for $21 a share, by Signet Jewelers Inc. Signet, the sole retail stock in the WWD sample to report improved earnings and sales prior to the market’s opening, saw its shares rise 5 percent to $104.65.
In Europe, the FTSE MIB in Milan receded 1.1 percent to 20,372.68, followed by the FTSE 100 in London, which edged down 0.01 percent to 6,820.56. The CAC 40 in Paris and the DAX in Frankfurt were both on the rise, each climbing 0.2 percent to 4,478.21 and 9,720.91, respectively.
A number of fashion, luxury and retail stocks managed strong gains, including French Connection, up 3.2 percent to 77 pence; Mulberry, which gained 2.3 percent to 7.16 pounds; Compagnie Financiere Richemont, up 1.4 percent to 93.45 Swiss francs, and Asos.com, which notched a 6.4 percent gain to 43.42 pounds.
Among those in decline were a number of Milan-listed stocks, including Tod’s, which lost 2.3 percent to 95.40 euros; Yoox Group, which fell 2.1 percent to 22.05 euros; Brunello Cucinelli, down 5.7 percent to 17.91 euros, and Aeffe, which slipped 2.2 percent to 1.14 euros.
The euro traded for $1.37 against the U.S. dollar, while the pound changed hands for $1.69 and the Swiss franc for $1.12.