Stocks opened higher as the market digests a slew of company earnings including beauty brand Revlon and children’s apparel brand Carters.
Revlon’s shares are up 4 percent to trade at $35.98 after the beauty company delivered second quarter revenue of $482.4 million and earnings of $26 million, or 55 cents a share. Total company sales for the second quarter were $215.4 million, lower than last year’s $242.7 million. The company’s quarter was hurt by its exit from the Venezuela business. In the U.S., Revlon saw higher sales in Almay Color and Revlon ColorSilk hair color, but lower sales of Sinful Colors color cosmetics. Internationally, Revlon experienced higher net sales of American Crew and Revlon Professional. Revlon stock is up 16 percent for the past year.
Children’s clothing maker Carter’s shares fell over 3 percent to trade at $103.72 after the company delivered second quarter profits of $35.8 million and earnings of 73 cents per share, beating the analyst estimate of 65 cents per share. Carter’s second quarter revenue rose 6.7 percent to $612.8 million. All of Carter’s businesses saw increases with big growth on the e-commerce side and either modest growth or declines for brick-and-mortar stores. Carter’s also raised its guidance projecting that for the full fiscal year of 2015, net sales will rise 5 percent. Carter’s stock is up 36 percent for the past year even as former executives were sentenced in a stock scandal.
Social media companies are grabbing a lot of the earnings attention. Twitter reported its earnings after the market closed on Tuesday and the stock is dropping 11 percent and trading at $32.50. Interim chief executive officer Jack Dorsey in a trademark Silicon Valley hoodie and sporting a lumberman beard gave the analysts some straight talk during the conference call. His frank comments about the company going through a dramatic turnaround that would take considerable time made investors jump ship. Twitter did deliver $502 million in second quarter revenue, which was higher than the expected $481 million and the company added more users. However, the company has yet to post a profit and has lost several key employees.
Yelp is plunging 26 percent and trading at $24.50 after investors gave the earnings a bad review. The online review site reported that its revenues grew 51 percent year over year to $133.9 million, with net income coming in at $9.4 million or $0.12 cents per share. Local advertising jumped 40 percent and reviews increased 35 percent to 83 million. So, it all sounded good until the company gave the guidance for the full year. Last April, Yelp said it would deliver 2015 revenue in the range of $574 million to $579 million, now it’s saying the range will be more like $544 million to $550 million. Analysts were expecting $571 million and it was this big gap they has caused the market to dump the stock.
Internationally, the Chinese stock market once again traded to the downside only to see the government’s “plunge protection” team go into action at the end of the trading session. Government funded funds jumped in at the last hour and went on a buying spree that forced stocks to close higher.
Elsewhere, the market will be watching for the Federal Reserve’s announcement at 2 p.m. EDT regarding interest rates. Many investors are expecting that rates will be hiked in September.