U.S. stocks are off to a rocky start as June gets under way.
The Dow Jones Industrial Average was falling by 83 points to 17,703, the S&P 500 was sliding by 6 points to 2,090 and the Nasdaq was off by 12 points to 4,934. The S&P Retail ETF was down by 5 cents to $42.26.
Michael Kors Holdings Ltd. managed to gain 4 percent to trade at $44.45 even though it posted lower fourth-quarter and full-year profits — hurt in part by the impact of unfavorable foreign currency exchange rates. For the three months ended April 2, net income fell 3.1 percent to $177 million, or 98 cents a diluted share, from $182.6 million, or 90 cents, a year ago. Total revenues rose 10.9 percent to $1.20 billion from $1.08 billion, which included an 11.9 percent gain in net sales to $1.16 billion from $1.04 billion. For the first quarter of fiscal 2017, the company guided total revenues to be between $940 million to $950 million, which includes a planned reduction in wholesale shipments, and comparable sales to decrease in the midsingle digit range.
Vera Bradley Inc. stock lost 11 cents to sell at $15.21 after delivering first-quarter earnings that beat expectations, but revenues were below estimates. Net income for the quarter was $2.4 million, or 6 cents a diluted share, up from a loss last year of $4.1 million, or 10 cents. This topped the FactSet estimate for earnings per share of 5 cents. Vera Bradley has been in the process of a turnaround and looks as if it is making some progress.
G-III Apparel Group Ltd. gained 2 percent to trade at $39.97 after reporting mixed results in its first-quarter earnings announcement as it beat earnings forecast, missed on revenues and guided below consensus for the second quarter. Net income for the quarter fell to $2.8 million, or 6 cents a diluted share, down from $6.8 million, or 15 cents, a year ago. The FactSet estimate was only for 2 cents per share in the quarter. G-III’s guidance for the second quarter is for net sales of $485 million, which is higher than last year’s $473 million, but lower than the Capital IQ estimate of $509 million.
Lands’ End Inc. stock fell by 2 percent to $16.40 on its first-quarter earnings. Lands’ End, responding to the tough retailing climate with aggressive discounting, reported a net loss of $5.8 million, or 18 cents a diluted share, for the first quarter ended April 29, compared to net income of $1.7 million, or 5 cents a diluted share, in the year-ago period.
Under Armour Inc. is falling by 6 percent to $35.58 after announcing after Tuesday’s market close it was updating its outlook for the full-year 2016 and for the second quarter due to the bankruptcy of Sports Authority. When the athletic giant reported first-quarter earnings, it didn’t believe the company’s exposure to its receivables from the sports retailer would be material and said it would continue to support Sports Authority Inc. as it worked its way through its restructuring. Since then, the bankruptcy court approved of a total liquidation as opposed to a restructuring. Under Armour now expects to recognize an impairment charge of $23 million in the second quarter. In addition, Under Armour had expected $163 million in revenues in 2016 from Sports Authority and now will only get $43 million. The liquidation of Sports Authority also means lost revenue from planned sales.