The U.S. stock market continues to track oil. If oil lifts, so does the stock market and that seems to be the case this morning. Also, The Gap Inc. deeply disappointed investors, while Duluth Holdings Inc. grabbed earnings by the horns.
Oil is moving back up to $38 a barrel and the S&P 500 is up 13 points to 2,054, the Dow Jones Industrial Average is up by 107 points to 17,649 and the Nasdaq is higher by 25 points to 4,873. The S&P Retail ETF is down by 23 cents to $43.87.
Gap’s stock fell over 9 percent to $25.10 after the retailer reported March sales that missed fairly low expectations. Same-store sales fell 6 percent, worse than the estimate for a decline of 5 percent. Banana Republic sales were especially bad as they slid 14 percent. Gap warned that inventories would be high heading into April, meaning that the company will probably have even more markdowns. To worsen matters, Fitch credit agency said it was very disappointed in Gap’s sales.
As bad as things are over at The Gap, they couldn’t be better at Duluth Holdings. Shares of the workwear brand known for its “ball-room jeans” are rising 15 percent to $20.55 after the company reported fourth-quarter earnings that beat estimates. Net sales for the three months ended Jan. 31 increased 27.5 percent to $140.4 million from $110.1 million a year earlier. The FactSet estimate was for sales of $133 million. For the full year, the company’s net sales rose 31.2 percent to $304.2 million. Looking ahead, the company projected fiscal 2016 sales of $370 million to $380 million. Earnings per share are forecast to be in the range of 66 cents to 70 cents per diluted share.
Ulta Salon, Cosmetics & Fragrance Inc. said it will become a part of the S&P 500 following the market close on April 15. Ulta will replace Tenet Healthcare, a hospital operator. Tenet is moving up to the S&P 400. Ulta stock has climbed 27 percent so far this year and this morning rose another 3 percent to trade at $201.65.
Traders are struggling with determining the right price for Under Armour this morning. The stock is cut in half because it’s splitting two for one, reflecting the issuance of a new Class C nonvoting common stock. The non-voting stock was issued on a one-to-one basis to existing shareholders as a dividend. Unfortunately for traders, the systems pricing the stock are confused. Yahoo is pricing the stock up 97 percent to $43.53, while StockTwits is showing the price to be down 49 percent to $43.55. Good luck trading.