Most Recent Articles In Financial
Latest Financial Articles
- China’s PMI Falls, Asian Stocks Suffer
- Dow Plunges at Open, European Stocks Slide
- Myer Sees Profit Slide, Unveils Turnaround Plan
More Articles By
J.C. Penney Co. Inc.’s stock fell 19.7 percent to $26.75 Wednesday as investors balked at the company’s $163 million first-quarter loss and the elimination of its dividend.
That’s the stock’s worst day in more than 30 years of trading.
A day earlier, chief executive officer Ron Johnson had acknowledged that his turnaround efforts took a greater financial toll than expected, but maintained that his reinvention of the massive chain was ahead of schedule. In addition to switching up the company’s pricing model and eliminating coupons, the rejiggering is setting the company on a more fashionable path, with looks from Marchesa’s Georgina Chapman and William Rast set to be added.
Also logging a dramatic decline in its share price Wednesday was Abercrombie & Fitch Co., which fell 13 percent to $39.50 after reporting a drop in first-quarter profits and weakness in Europe.
Abercrombie’s net income dwindled to $3 million, or 3 cents a diluted share, from $25.1 million, or 27 cents, a year earlier. And sales for the three months ended April 28 rose 10.1 percent to $921.2 million from $836.7 million on a 5 percent comparable-store sales drop.
“While we are disappointed that European sales trends remain challenging in a very difficult macroeconomic environment, we are largely satisfied with our overall performance for the quarter in that context,” said Mike Jeffries, chairman and ceo of Abercrombie.
“Our U.S. business, including direct-to-consumer, increased 4 percent on a comparable basis, on top of a strong performance last year,” he said. “Our international business comped negatively, but the economics remain strong and we delivered overall international sales growth of 42 percent including a strong performance in direct-to-consumer.”
For the full year, Abercrombie continues to project earnings per share of $3.50 to $3.75. Same-store sales are now projected to drop by a percentage in the midsingle digits.
Limited Brands Inc. late Wednesday exceeded analysts’ expectations for first-quarter earnings but projected second-quarter results below Wall Street’s view.
Net income declined 24.6 percent to $124.6 million, or 41 cents a share, 1 cent above the consensus estimate, from $165.2 million, or 50 cents, in the 2011 quarter. Excluding nonrecurring items, year-ago EPS was 40 cents.
Sales in the quarter pulled back 2.9 percent to $2.15 billion from $2.22 billion and rose 7 percent on a same-store basis. Eliminating $214 million in year-ago sales from a sourcing business sold in November, sales were up 7.5 percent.
Limited, which will hold a conference call today, projected second-quarter EPS of 40 to 45 cents, below the current 50-cent analyst estimate. The top of its full-year guidance for EPS of $2.63 to $2.83 matched Wall Street’s expectations. Shares retreated 3.6 percent in the first hour of after-hours trading, to $46.25, after closing at $47.96, down 9 cents, or 0.2 percent.
Additionally, Chico’s FAS Inc. said first-quarter profits rose 16.8 percent to $53.6 million, or 32 cents a diluted share, from $45.9 million, or 26 cents, a year earlier. Sales for the three months ended April 28 jumped 21.2 percent to $650.8 million from $537.2 million.
This year, the company is looking for comps to grow at a midsingle-digit clip. Investors pushed the retailer’s stock up 3.8 percent to $15.21.
The overall market was caught in the doldrums Wednesday, with the S&P Retail Index slipping 0.1 percent, or 0.89 points, to 615.12, as the Dow Jones Industrial Average dipped 0.3 percent, or 33.45 points, to 12,598.55.