Stocks are off to a negative start on Friday morning as China’s markets remain closed for the Dragon Boat Festival and investor George Soros said he was getting out of stocks.
The S&P 500 is down by 17 points to 2,098, the Dow Jones Industrial average is falling by 126 points to 17,859 and the Nasdaq is off by 40 points to 4,473. The S&P Retail ETF is falling by over 1 percent to $41.60 and most retails stocks are selling off.
Urban Outfitters Inc. is falling over 6 percent to $26.06 after the specialty retailer gave a second-quarter same-store sales warning when it filed its 10-Q quarterly report with the Securities and Exchange Commission. The response from the market was swift with investors dumping shares and analysts taking out their pencils and revising numbers. Brian Tunick, an analyst with RBC Capital Markets cut his price target to $29 from $32 and trimmed his earnings estimates. William Blair analyst Amy Noblin also cut her estimates on the news. She cut her second-quarter estimate from 55 cents to 53 cents and her full-year estimate to $1.96 from $1.98. She also reduced her comp estimate from flat to negative 2 percent, but she does expect gross margin improvement at Anthropologie.
Canadian retailer Hudson’s Bay Co. reported better-than-expected revenues for the first quarter, but earnings fell and the stock dropped over 2 percent to $15.36 Canadian dollars, or $12.11. Retail sales increased 59.4 percent to 3.3 billion Canadian dollars, or $2.59 billion, from 2.1 billion Canadian dollars, or $1.65 billion, largely due to the acquisitions of Galeria Kaufhof and Gilt last year and in line with consensus. Comparable sales were up 4.4 percent in the quarter and digital sales were up 7.4 percent.
Ralph Lauren Corp. stock was falling over 2 percent to $96.18 after receiving a strong sell rating from Zacks Investment Research. Zacks made the rating cut following the announcement earlier this week of a major restructuring at the company. The analyst felt that the changes at the company will affect sales and profits as the plan is executed. Separately, Ralph Lauren announced it had hired Coach executive Jane Nielsen as its chief financial officer.
Nike Inc. is down slightly after losing its new employee Dave Dombrow to under Armour. Dombrow left Under Armour in February to go work at Nike, which has been losing ground in the basketball sneaker category. Unfortunately, Dombrow had a non-compete clause that would’ve kept him from working at Nike until 2017. But Dombrow returns to Under Armour with a newly created role of chief design officer.