U.S. stocks are trading modestly to the downside as investors are worrying over the drops in the job market.
Weekly initial jobless claims rose to 285,000, while continuing claims fell to 2.255 million from 2.273 million. Labor costs increased, but productivity fell — meaning people are worried that layoffs will start to build. Challenger job cuts moved to a six-month high.
The Nasdaq is down 24 points to 4,479, the S&P 500 is dropping by 7 points to 1,905 and the Dow Jones Industrial Average was falling by only 26 points to 16,310.
Ralph Lauren stock is falling by more than 10 percent to $105.86 after the fashion house disappointed the market with declining sales. Ralph Lauren did beat analyst earnings estimates for the fiscal third quarter with diluted earnings a share of $2.27, versus the expected $2.13, on net income of $193 million. As with other apparel brands, the warm winter and tight-fisted tourists hurt sales. The company is also in a position of transition as Stefan Larsson takes over as chief executive officer, while founder Ralph Lauren remains executive chairman and chief creative officer.
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Kohl’s stock is also getting hammered after the discount chain slashed its 2015 profit forecast from a range of $4.40 to $4.60 a share to $3.95 to $4 a share. Kohl’s blamed weak sales in the holiday quarter and low demand for cold weather clothes. The company also got hit with much lower gross margins as the company was forced to be more promotional, which resulted in higher markdowns on both year-round and seasonal merchandise. The stock is dropping more than 15 percent to $43.40.
Coty beat on its quarterly sales estimates, delivering $1.21 billion versus the FactSet estimate of $1.20 billion. But net income of $89 million was a steep drop from $125.4 million in the same period a year ago. Coty saw growth in its color cosmetics, a flat performance in skin and body care, but declines in fragrances. The company is moving forward with acquisition of beauty brands from Procter & Gamble, which it expects to close in the second half of 2016.
Sally Beauty Holdings delivered solid earnings for the first quarter. The stock is up over 2 percent in trading to $28.75. Sally Beauty reported net sales of $998 million, up 3.5 percent and beating the FactSet estimate of $990 million. Earnings per share came in at 43 cents, which topped the FactSet estimate of 36 cents by 18 percent. Sales growth was driven by same-store sales growth and net new store openings. First-quarter same-store sales growth of 3.9 percent easily topped last year’s growth of 2.3 percent. Sally Beauty took selective price increases in certain parts of the country and fewer discounts in this quarter versus the last quarter
L Brands is dropping over 5 percent to $90.41 after disappointing investors with soft January sales. Same-store sales in January fell 2 percent compared to last year. Thomson Reuters had estimated the company to rise 2 percent. L Brands also reported that fourth-quarter net sales were $4.395 billion, an 8 percent increase over last year. Comparable store sales for the fourth quarter increased 6 percent. L Brands raised guidance for the fourth quarter to $2.05, which is higher than the previous guidance of $1.85 to $1.95.