Stocks slipped slightly lower this morning as the market digested weak same-store sales for apparel in July. Michael Kors was the big winner for the morning, while beauty companies Elizabeth Arden and Sally Beauty disappointed.
Same-store sales for July in apparel posted a 0.5 percent decline, more than the estimated loss of 0.3 percent, according to the Thomson Reuters Same Store Sales Index. The best performer so far was the Bath & Body Works division of L Brands Inc., up 4 percent, and the worst was The Buckle Inc., which lost 8.1 percent. Gap Inc. reports its same-store sales Monday.
Michael Kors’ stock popped 6.7 percent to $42.20 in early trading after delivering first-quarter earnings of 87 cents a share, 12 cents better than what Wall Street had estimated. Revenues increased 11.2 percent to $986 million, also besting the estimate of $944.3 million. Retail net sales increased 9 percent to $523.3 million and were helped by 107 new net store openings. It wasn’t all rosy, since Kors gave downside guidance for the second quarter with an earnings range of 86 cents to 90 cents and a revenue range of $1.06 billion to $1.08 billion. The Street had planned for earnings of 98 cents and revenues of $1.11 billion.
Elizabeth Arden Inc. did not fare as well, with the stock tumbling 4.4 percent to trade at $9.79 following its fourth-quarter results. The beauty company reported a loss of $1.57 a share, which was 92 cents lower than the analysts’ expectations of a loss of 65 cents. Revenues declined 8.5 percent year-over-year to $175.5 million. Arden faced pain in North America where sales decreased 14 percent, too much to overcome the 4 percent gain in international sales. Arden blamed the decline in sales on non-Elizabeth Arden-branded fragrances. The company also named new leadership in July and plans a new marketing campaign for the fall.
It wasn’t any prettier at Sally Beauty Holdings Inc., where fiscal third-quarter earnings missed estimates. The Denton,Tex.-based company reported earnings of 41 cents a share, but the expectation was for 46 cents. Revenue also came up a bit short at $967.9 million, with analysts estimating it would be $969 million. At least chief executive officer Christian Brickman admitted it by saying in the statement, “We are disappointed in the Q3 results for our Sally business, but not discouraged.” Sally will sponsor the show “Project Runway” in August and is refreshing the look of stores. Investors were clearly disappointed, though, sending the stock lower by 10 percent to trade at $26.64.
Television retailer HSN delivered second-quarter earnings of 81 cents a share, in-line with expectations. Net sales at HSNi increased 4 percent to $885.6 million and HSN’s net sales increased 3 percent to $572 million, with digital sales rising 11 percent. The stock is trading lower at $71.05, down 4.72 percent.
In economic news, initial jobless claims increased to 270,000, just shy of the anticipated 271,000, but still higher than the previous 267,000. Continuing claims fell to 2.255 million from 2.269 million.