Retail stocks fell over 2 percent Thursday as renewed concerns about the housing and finance markets combined to sink the Dow Jones Industrial Average more than 283 points.
Among the biggest decliners was Charlotte Russe Holding Corp., whose shares lost about one-seventh of their value, dropping at one point to a three-year low after the firm was downgraded by Roth Capital to “hold” from “buy.” The company late Wednesday said it expected same-store sales to decline in the low- to midsingle digits during its current fourth quarter, with earnings per share, excluding charges, coming in at 15 to 23 cents, well below the 30 cents initially expected by analysts.
The San Diego-based company’s shares were down 14.8 percent to close at $12.47 and traded as low as $12.05.
While the Dow Jones fell 2.4 percent to 11,349.28, with a drop in existing home sales and Ford Motor Co.’s worst loss in history adding to jitters, the Standard & Poor’s Retail Index was hit by a 2.3 percent drop, ending the day at 352.56.
The retail declines were across the board, strongest in but not limited to specialty stores. Among the sharpest declines were Dillard’s Inc., which fell 10.3 percent to $10.49; Charming Shoppes Inc., which dropped 7.2 percent to $5.04, and Chico’s FAS Inc. and Coldwater Creek Inc., both declining 7 percent to $5.85 and $6.68, respectively. Saks Inc. was off 6.7 percent to $10.71. Among vendors, Liz Claiborne Inc. shares dropped 7 percent to $13.07, Coach Inc. slid 6.6 percent to $27.58, Fossil Inc. was down 6.4 percent to $27.44 and Jones Apparel Group Inc. lost 6.3 percent to $15.25.
Caché Inc. reported better, and better-than-expected, second-quarter earnings and sales, including those of the same-store variety, but still saw its shares sink 3.1 percent to $13.57.
For the 13 weeks ended June 28, the New York-based women’s specialty chain posted net income of $2.1 million, or 16 cents a diluted share, 63.9 percent above the $1.3 million, or 8 cents, reported in the year-ago quarter. Analysts on average expected earnings of 15 cents. Excluding legal settlement costs in the 2007 quarter, profits were up 10.3 percent.
Sales in the quarter were up 4.1 percent, to $74 million from $71 million, and rose 3 percent on a same-store basis against a 1 percent increase in the 2007 period.
Gross margin declined to 46.2 percent of sales from 47.8 percent in last year’s quarter, which the company attributed both to its new pricing strategy and the integration of its in-house design team after the acquisition last year of Adrienne Victoria Designs. Thomas Reinckens, chairman and chief executive officer, said these moves and a new emphasis on collection dressing “are expected to raise sales productivity and operating margins going forward as we benefit from increases in shopping frequency, expansion of our customer base and greater leverage of expenses.”
The ceo noted that inventory per store was down 17 percent from a year ago at the end of the quarter, and that July sales were coming in at plan. The firm, which operates 296 stores under the Caché and Caché Luxe banners, made no changes in its guidance for the remainder of the year. Comparable-store sales are forecast to increase in the low- to midsingle-digit range. Earnings are projected to end the year at 39 to 42 cents a share on a diluted basis.
For the six months to date, Caché had net income of $52,000, or no cents a share, against year-ago profits of $1.4 million, or 9 cents a diluted share. Excluding legal costs last year and 14 cents a share to cover store exit costs and those associated with the departure of Brian Woolf as ceo earlier this year, EPS would have been up to 14 cents a share from 12 cents a year ago.
Revenues moved ahead 4.7 percent to $141.7 million and comps climbed 3 percent.�
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
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With her costume pearl necklace and what-you-see-is-what-you-get style, Barbara Bush, who died Tuesday at age 92, was a straight-shooter from start to finish.
Born Barbara Pierce in New York City, Bush served as the 37th first lady, as well as the country’s second lady from 1981 to 1989. In addition to being part of the longest presidential marriage — 73 years — Bush also had the unlikely distinction of having one son, George W., become the 43rd president and another son, Jeb, run unsuccessfully in 2016. Having served as second lady during the Reagan administration’s two terms and lived all over the world during her own husband’s ascending political career, Barbara Bush made it clear that literacy — not fashion — was her priority. Read more from Rosemary Feitelberg’s obituary on the late First Lady in WWD.com, link in bio. #barbarabush #wwdnews
Western and ’90s trends have influenced denim for fall 2018. Think raw, dark and coated jeans mixed with bold prints and tough leather. #trendtuesdays #wwdfashion (Styled by @thealexbadia;📷: @ryanplett)