By  on August 6, 2007

Hefty, company-specific problems compounded with macro factors are weighing down retail stocks.

An analysis of 46 retail companies tracked by WWD shows that 74 percent of the stocks are trading down year-to-date as of market close on July 31 — with an average decline of 8.6 percent for the year so far.

That marks a sharp sell-off from the prior month, when the majority of the same retail stocks, or 58.7 percent, were posting year-to-date gains as of market close June 29 — with an average increase of 3.5 percent.

"The retailers have been hit lately I think with a lot of issues that are very specific to the companies," said Nollenberger Capital Partners Inc. analyst Ann Poole. "A lot of them, it's their own fault, the main reason being not having the right product."

Children's Place Retail Stores Inc. took the hardest hit, losing 44.9 percent of its value from Jan. 3 to July 31.

CIBC World Markets analyst Dorothy Lakner said the children's apparel retailer faced significant merchandising and inventory issues, where the company did not order enough key merchandise to meet demand.

"That turned out to be an issue in the first quarter and bled into the second quarter," Lakner said.

Consistency issues plagued Caché Inc., shares of which traded down 31.2 percent by July's close.

"They just can't seem to get that momentum and sustain it," said Poole, who pointed to the retailer's unpredictable same-store sales and earnings results over the past several months.

However, B. Riley & Co. analyst Jeff Van Sinderen sees Caché in the early stages of a turnaround, driven by its new merchant Adrienne Victoria Designs, announced last month.

Meanwhile, Lakner called American Eagle Outfitters Inc.'s stock performance "inexplicable." Shares of AEO lost 25.4 percent from Jan. 3 to July 31.

"There's something wrong in not seeing the value there because they've continued to post solid sales and comps," Lakner said.

Poole agreed, and said the stock "has pulled back a little more than it should which definitely creates a buying opportunity."Among the gainers in the year-to-date period, Guess Inc. came in on top, up 47.2 percent as of July 31.

Needham & Co. analyst Christine Chen said Guess consistently executed on every channel of their business thus far this year.

"And more importantly, what investors don't focus on, is that their international growth is off the chart and that's seen as a big driver of upside," Chen said.


THE BIG PLUNGE
COMPANY
June YTD
July YTD
DECLINERS
Childrens Place Retail Stores Inc. (PLCE)
-16.6%

-44.9%

Charlotte Russe Holding Inc. (CHIC)
-16.2%
-44.6%
Mothers Work Inc. (MWRK)
-19.5%
-42.8%
Hot Topic Inc. (HOTT)
-19.7%
-33.5%
Caché Inc. (CACH)
-46.5%
-31.2%
Bon-Ton Stores Inc. (BONT)
9.5%
-30.1%
Gottschalks Inc. (GOT)
5.6%
-29.5%
Wet Seal Inc. (WTSLA)
-7.8%
-28.5%
Charming Shoppes Inc. (CHRS)
-21.1%
-28.0%
Bebe Stores Inc. (BEBE)
-15.9%
-26.9%
American Eagle Outfitters Inc. (AEO)
-21.1%
-25.4%
Dress Barn Inc. (DBRN)
-14.0%
-23.8%
Stein Mart Inc. (SMRT)
-9.0%
-20.1%
Limited Brands Inc. (LTD)
-6.2%
-18.4%
Sears Holding Corp. (SHLD)
1.3%
-18.2%
Citi Trends (CTRN)
-5.4%
-18.0%
Quiksilver Inc. (ZQK)
8.7%
-17.1%
Urban Outfitters Inc. (URBN)
1.3%
-15.4%
Foot Locker Inc. (FL)
-0.3%
-14.6%
Pacific Sunwear of California Inc. (PSUN)
6.0%
-13.2%
Dillard’s Inc. (DDS)
4.8%
-12.9%
J.C. Penney Co. Inc. (JCP)
-6.8%
-12.2%
Gap Inc. (GPS)
-0.6%
-10.1%
Cato Corp. (CTR)
-4.4%
-9.9%
Kohl’s Corp. (KSS)
5.9%
-9.4%
Tween Brands Inc. (TWB)
7.2%
-8.1%
Nordstrom Inc. (JWN)
0.0%
-7.0%
Chico’s FAS Inc. (CHS)
17.2%
-6.7%
AnnTaylor Stores Corp. (ANN)
8.2%
-4.0%
Macy’s Inc. (M)
6.7%
-3.2%
TJX Companies Inc. (TJX)
-3.5%
-2.7%
Wal-Mart Stores Inc. (WMT)
2.1%
-2.4%
Abercrombie & Fitch Co. (ANF)
2.7%
-1.6%
Talbots Inc. (TLB)
8.3%
-0.6%
 
GAINERS
Guess Inc. (GES)
48.9%
47.2%
J. Crew Group Inc. (JCG)
43.6%
33.5%
Eddie Bauer Holdings Inc. (EBHI)
41.5%
32.8%
Tiffany & Co. (TIF)
35.3%
23.1%
True Religion Apparel Inc. (TRLG)
33.0%
20.1%
Zumiez Inc. (ZUMZ)
21.7%
19.1%
Aéropostale Inc. (ARO)
30.3%
19.0%
Gymboree Corp. (GYMB)
0.1%
9.3%
Target Corp. (TGT)
11.7%
6.4%
Coach Inc. (COH)
8.2%
3.7%
Saks Inc. (SKS)
18.6%
2.8%
Deb Shops Inc. (DEBS)
6.6%
0.4%
 
Average % Change:
3.5%
-8.6%

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