U.S. stocks are lower this morning as retailers like Nordstrom Inc. and V.F. Corp. disappointed with an early round of earnings.
The S&P 500 is down by 11 points to 1,906, the Dow Jones Industrial Average is dropping by 93 points to 16,319 and the Nasdaq is lower by 16 points to 4,469. The S&P Retail ETF is dropping by 66 cents to $40.99.
Nordstrom’s stock is tumbling over 10 percent to $47.10 after the department store missed analyst estimates for the fiscal fourth quarter and dramatically reduced guidance. Net earnings for the fourth quarter ended Jan. 31 fell to $180 million from $255 million in the year-ago period. The company forecast that for the first half of fiscal year 2016, earnings per share will decrease by roughly 30 percent. The company is working to reduce expenses by $300 million over the next five years and is looking to improve profitability.
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It isn’t any better over at VF, where fourth-quarter earnings of 95 cents a share missed the FactSet estimate of $1.01 and sales of $3.4 billion were short of the FactSet estimate of $3.6 billion. The stock is tumbling by 6 percent to $57.41. For the fourth quarter, revenue dropped 5 percent, while for the full year revenue was up 1 percent. The warm winter hurt sales of North Face goods, but revenues for the Vans brand were up. The Timberland brand and jeanswear were both down during the quarter. VF said it will spend $1 billion on a share repurchase plan. Looking ahead, VF expects the first half of the year will be flat with the second half increasing at a high single-digit rate.
Following dismal earnings, Bebe Stores Inc. said chief executive officer Jim Wiggett and chief financial officer Liyuan Woo were no longer with the company. Founder Manny Mashouf is now the ceo and Walter Parks has rejoined as president, chief operating officer and interim chief financial officer. Bebe also said that it will eliminate 45 positions across the company representing approximately 14.6 percent of its workforce.
Investors are also focused on the Consumer Price Index numbers for January. Core inflation is rising with shelter and medical costs increasing, while food is flat and energy prices are down. Unadjusted apparel prices dropped 0.5 percent for 12 months ending in January, but were up 0.6 percent sequentially.
Crude oil is back to falling and is now trading near $31 a barrel, while gold is up to $1,229 an ounce.
Elsewhere, Asian markets ended on a lower note as the Nikkei was down dramatically but trimmed its losses to just 1.4 percent for the day. China’s Shanghai Composite Index fell 0.1 percent, but ended the overall week up 3.1 percent. The Hong Kong Hang Seng Index also closed lower by 0.4 percent, but ended the week by gaining 5.3 percent.
The European markets are mostly lower as declines in financial stocks are bringing down the broader markets. Italy’s banks continue to plunge, dragging down the Italian MIB another 1.5 percent.