Stocks opened lower as lackluster second-quarter earnings rolled in. The Dow Jones Index and the S&P 500 traded lower, while the Nasdaq opened higher.
Gildan Activewear saw its stock sell off after missing earnings and revenue estimates, plus guiding down on future earnings once again. Gildan was hurt by weakness in its European business after it raised prices, but not all retailers followed through. Gildan was also hit by the weak euro and one European retailer that had trouble taking in stock. Gildan also suffered a destocking event from another major retailer. Gildan stock was down 7 percent to trade near $32.54.
Hanesbrands was also getting slammed, with the stock down 11.4 percent to trade at $30.22 after the company missed revenue expectations after the market close on Thursday. Hanesbrands delivered second-quarter earnings of 50 cents a share and net income of $265 million and revenue of $1.52 billion. Analysts had expected revenue of $1.56 billion. Investors did not like hearing that the full-year sales guidance would be adjusted to $5.9 billion with $15 million to $20 million being blamed on exchange rates. Hanesbrands also said that operating profit growth would be uneven. The company added that a major retailer had reduced inventory.
Urban Outfitters stock dropped 2 percent to trade at $32.30 after being downgraded by BMO Capital. The rating was lowered to market perform from outperform and the price target lowered to $30 from $53. The blame was placed on Anthropologie, which the analyst said, “appears to be struggling to regain traction.” The main Urban division seems to be recovering nicely.
PVH Corp. said that it had a new agreement with Fred Gehring, who will step down from the board and relinquish his role as executive chairman at Tommy Hilfiger. Gehring will continue in his role of vice chairman at PVH. The stock slid roughly 1 percent to trade at $114.91.
Lilly Pulitzer is suing Old Navy for copyright infringement. Lilly Pulitzer claims Old Navy copied two patterns, the “High Tide Design” and the “Sparks Fly Design.” The similarities were noted on various Instagram posts. Apparel designs are not protected, but prints and patterns are covered under intellectual property.