The brewing debt troubles in Italy and Spain and the looming threat of a European recession continued to pressure stocks from Milan to New York Thursday and companies weighing in on third-quarter results got hammered whether or not they had bad news for investors.
This story first appeared in the November 18, 2011 issue of WWD. Subscribe Today.
Even Limited Brands Inc., which reported a 54 percent gain in profits late Wednesday, saw its stock drop 3.2 percent to $41.60 on Thursday. The company’s Victoria’s Secret division saw comparable-store sales shoot up 13 percent.
Sharen Turney, president and chief executive officer of Victoria’s Secret, told analysts on a conference call that about 80 percent of the time the chain saw better traffic than the mall at large. She attributed that to “us being able to deliver compelling emotional stories, really staying focused on our core …the higher selling staff and training…the surprise and delight strategy that is tied back into our powerful bra launches.”
Shares of Ross Stores Inc. slipped 1.1 percent to $86.95 even as third-quarter earnings rose 18.6 percent to $144 million, or $1.26 a diluted share, and comps gained 5 percent.
But some of the retailers weighing in on the third quarter did little to help their case with investors.
Shares of Casual Male Retail Group Inc. took a big hit, falling 13.1 percent to $3.26, after the big and tall chain reported an unexpected loss of $1.6 million, or 3 cents a diluted share, in the third quarter.
And The Bon-Ton Stores Inc.’s stock fell 1.3 percent to $3.10 as the department store’s third-quarter losses widened to $22 million, or $1.21 a share, and comp sales slipped 5.9 percent. “Performance in our moderate traditional assortments was soft and customers were not accepting of price increases in these categories, which further pressured sales results,” said Bud Bergren, president and ceo.
On the broader market, the S&P Retail Index fell 1.8 percent, or 9.71 points, to 528.89. Paris’ CAC 40 tumbled 1.8 percent to 3,010.29, and Milan’s FTSE MIB retreated 1.4 percent to 15,198.31