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U.S. Retail Stocks Follow May Sales Down

Retail index suffers biggest decline in more than a month.

Lower — and lower-than-expected — retail sales last month helped send retail shares down for the fourth consecutive day and their biggest drop in over a month.

The S&P 500 Retailing Industry Group closed the trading day at 876.79, down 1.7 percent, the index’s worst showing since a 2.3 percent dip on May 6.

The major U.S. indices weathered lesser damage. The Dow Jones Industrial Average and S&P 500 both slipped 0.7 percent to close at 16,734.19 and 1,930.11, respectively.

Disappointing retail sales contributed to the declines. The Commerce Department reported that sales at apparel and accessories stores were down a seasonally adjusted 0.6 percent last month, to $21 billion, while department store sales were off 1.4 percent to $14 billion. General merchandise stores, a category that includes department stores, fell 0.6 percent to $54.8 billion.

The prospects for disposable income also tightened on news that oil prices had hit nine-month highs as tensions escalated in Iraq with insurgents surrounding the nation’s largest refinery.

Among fewer than a dozen fashion, retail and beauty stocks tracked by WWD to gain value were Lands’ End Inc., up 8.2 percent to $28.81 as first-quarter profits increased 48.1 percent, and Christopher & Banks Corp., ahead 3.3 percent to $7.80 following its improved financial performance reported earlier in the week.

The largest decline in the WWD sample came from Lululemon Athletica Inc., off 15.9 percent to $37.25 after it reported a 59.9 percent drop in first-quarter profits and reduced its guidance for the year.

Also in decline wear Cache Inc., 3.6 percent to $1.63; Tilly’s Inc., 3.3 percent to $8; Quiksilver Inc., 3 percent to $3.89, and Kate Spade & Co., 2.9 percent to $36.16.

Major European markets also came under pressure.

The FSTE MIB in Milan fell the most, losing 0.3 percent to 22,163.49, followed by the DAX in Frankfurt, down 0.1 percent to 9,938.70, and the CAC 40 in Paris, which fell 0.02 percent to 4,554.40. Only the FTSE 100 in London managed to inch up, gaining 0.1 percent to 6,843.11.

It was also a largely downbeat day for fashion, luxury and retail stocks.

Among the losers were Asos, which dipped 3.8 percent to 31.10 pounds; Gemfields, down 1.5 percent to 50 pence; Moncler, which lost 2.4 percent to 12.25 euros, and Koovs, down 1.8 percent to 1.40 pounds.

The few stocks that gained in the day’s trading included online retailer Boohoo.com, which shot up 9.8 percent to 51 pence after the company turned in positive results Thursday in its first report since going public earlier this year. Boohoo.com said in the year to Feb. 28, its profits almost quadrupled to 8.4 million pounds, or $13.4 million, with sales up 63 percent to 109.8 million pounds, or $174.6 million.

Mulberry also gained, rising 1.1 percent to 7.15 pounds, even as the firm reported Thursday that its profits in the year to March 31 fell more than 50 percent to 8.6 million pounds, or $13.7 million, a result of both a dip in sales and one-off costs. But the company’s executive chairman Godfrey Davis said that while he expects the first six months of the current fiscal year to be “difficult,” the second half is expected to produce “improvement” and reiterated the label’s plans to balance its product offer with more accessibly priced bags.

The pound traded for $1.68 against the U.S. dollar Thursday, while the euro went for $1.35.