NEW YORK — Despite a surge in stocks on Thursday, major indices closed the week on a down note as higher oil prices and worries over the impact of a slowing economy troubled investors. The S&P 500 wrapped up the week down 1 percent, to 1,266.74 from 1,279.41 the prior week. In the retail sector, the S&P Retail Index closed Friday up 0.3 percent from the previous day after gaining 2.2 percent during Thursday's retail stock rally. The WWD Composite Stock Index finished the week down 0.1 percent, to 1,048.81 from 1,050.04.
The surge in retail shares Thursday was fueled by robust earnings from Target Corp., Kohl's and J.C. Penney.
Penney's second-quarter net income soared 36.6 percent, to $179 million, bolstered by strength in its private label business and a rebound in women's apparel sales. Total sales rose 6.5 percent, to $4.24 billion from $3.98 billion.
Myron E. "Mike" Ullman 3rd, chairman and chief executive officer of J.C. Penney Co. Inc., said during a conference call, "We have brands that inspire" and Penney's will "continue to strengthen our brand offering within the context of our lifestyle merchandising."
Ullman told analysts the retailer plans to open 25 stores in the third quarter. On Friday, most analysts' reports praised Penney's financial execution in the second quarter.
Adrianne Shapira, Goldman Sachs equity analyst, said in a research note Friday that the retailer's gross margin rate came in higher than expected. "While we are revising our [third- and fourth-] quarter earnings per share estimates higher due to lower share count (232 million versus 238 million prior), we believe further upside could exist via margin expansion," she wrote.
"As for the stock, we continue to view J.C. Penney as a best-in-class operator, but prefer the shares of Federated, over the medium term, given their lower relative valuation," Shapira said. "However, J.C. Penney stock remains an excellent long-term investment vehicle, given its competitive positioning, superior inventory management and growth outlook."
Shares of the retailer closed the week up 1.4 percent at $65.30.
On the vendor side, The Warnaco Group Inc. said Tuesday that it would restate its previously reported financial statements for the fiscal year ended Dec. 31 and for the first fiscal quarter ended April 1 because of irregularities relating to the accounting for certain returns and vendor allowances. Warnaco said it discovered the errors and irregularities during the company's closing review for its second fiscal quarter ended July 1. The company reports results today.Standard & Poor's Ratings Services said Friday that it revised its outlook on Warnaco ratings to "stable" from "positive." The ratings service also affirmed the company's corporate ratings.
"The financial impact of these restatements will not significantly affect credit-protection measures," the ratings firm said in a statement.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye