RETAIL STOCKS TAKE BEATING AS DOW FALLS

Byline: Thomas J. Ryan

NEW YORK — Retail stocks again took their share of lumps Monday as the Dow Jones Industrial Average traveled another steep downward slope, dropping 199.80 points to 10,167.40.
Retailers have been under pressure from the investment community all year because of concerns about interest rate hikes by the Federal Reserve. The rate increases are intended to slow down the economy, including consumer spending, but they’ve also contributed to declines in apparel and retail stock values. (For more on retailers’ rocky rides with investors, see page 5.)
Among the majors taking hits Monday were Federated Department Stores, 1 11/16 to 34 7/16; May Department Stores, 1 1/16 to 24 1/16; Dillard’s, 1 to 16 9/16; Target, 1 1/4 to 60 1/2; Wal-Mart Stores, 3 to 49 5/8; Tiffany 3 1/16 to 65 7/16; Gap, 1/2 to 45, and Nordstrom, 1/2 to 22.
J.C. Penney gave back 7/16 to 14 7/16, a 52-week low. Standard and Poor’s said it might downgrade the ratings of the firm because of continuing weak same-store sales trends at its department store unit.
Kohl’s Corp., which has been consistently outperforming its department store competition as well as most other retail issues, tacked on 13/16 to 76 13/16 after its board announced a 2-for-1 stock split. The firm also said Wayne Embry, president and chief operating officer of the Cleveland Cavaliers pro basketball team, and Arlene Meier, its chief financial officer, had joined its board of directors.
Shares of Kmart gained 3/16 to close at 8 3/4 after the firm reported fourth-quarter profits exceeded Wall Street estimates. Stein Mart, which added 11/16 to 5 9/16, said its board had authorized the repurchase of another 2.5 million shares.
Continuing its recent slide, Ames dropped 1 1/8 to 16 7/8. The stock’s 52-week high is 48 7/8. The regional discount retailer, based in Rocky Hill, Conn., said last week that it would consider buying back up to $25 million of its stock. Bradlees lost 13/16 to 21 5/8.
Specialty retailers had a more mixed performance. Decliners included Talbots, 2 1/8 to 38 1/8; Zale, 2 1/16 to 38 5/16; Hot Topic, 15/16 to 18 1/4, and Pacific Sunwear, 1 11/16 to 23 3/8. Gainers included Ann Taylor, 7/8 to 21 5/8; Cache, 3/4 to 5, and Brauns Fashions, 5/8 to 16 7/8. Gadzooks, which banged out a 25.5 percent hike in February same-store sales, added 7/8 to 17 3/4.
Among cyberstores, Bluefly added 7/8 to 14, but Fogdog lost 3/4 to 8 1/4. Drugstore.com sank 3 1/4 to 20 5/8.
Vendors generally fared better than their customers.
Gucci Group, which confirmed that it had hired Chantal Roos as president and managing director of Sanofi Beaute, tacked on 1/4 to 85 3/4. Roos had been president and chief executive of Beaute Prestige International since founding the company in 1990. Rival Louis Vuitton Moet Hennessy fell 3 1/16 to 66.
Jones Apparel Group slid 1 1/4 to 25 7/16. Nine West Group Inc., which Jones acquired last year, agreed Monday to pay $34 million to settle charges it engaged in price fixing in violation of federal and state antitrust laws. Banc of America Securities recently cut its rating on Jones because of markdown pressures and weak sales in the department store sector.
Other decliners were Tommy Hilfiger Corp., 7/8 to 13 11/6; Liz Claiborne, 1/2 to 41 1/18; Nike, 7/8 to 28 1/2; Russell Corp., 13/16 to 13 11/16, and VF Corp., 1 9/16 to 22 15/16.
On the plus side, Guess jumped 1 3/16 to 21 7/8. Based on better than expected 1999 earnings, Gruntal & Co. recently raised its earnings estimate for 2000 by 3 cents to $1.48 a share. Guess’s earnings last year rose 109 percent to $1.20. Gruntal also reiterated its “outperform” rating on Guess.
Nautica Enterprises added 1/2 to 11 7/8 after it announced a new program to purchase another two million shares of its stock, or about 6 percent of the outstanding shares. Its 52-week high is 17 5/16.
Gildan Activewear moved up 3/4 to 33 while saying it planned to restructure its T-shirt sewing plant in Montreal, resulting in the elimination of 93 jobs. In a statement, Gildan said it made the decision “due to the realities of today’s global marketplace under NAFTA and other international trade agreements, which have greatly impacted our industry.” Gildan plans to shift the products to its own plants and subcontractors in Honduras, Nicaragua, Mexico, El Salvador and Haiti.
Warnaco Group added 1/16 to 11 1/2 despite being downgraded by ING Barings to “hold” from “buy.” In a report, Barings said it was cutting Warnaco’s 2000 earnings-per-share estimate to $2.25 from $2.35 and projected fiscal year 2001 earnings at $2.50.
Barings also lowered Warnaco’s 2000 growth expectations for the core business to 8 percent from 13 percent.
“Current business trends are mixed and total inventories are high — up 55 percent at yearend, 30 percent excluding acquisitions — and could take at least three more quarters to clear excess,” Barings said.
Other gainers were Kellwood, 13/16 to 16 9/16; Leslie Fay Cos., 11/16 to 6 3/4; Mossimo, 11/16 to 7 3/8, and Timberland Corp., 11/16 to 47 1/2.
In cosmetics, Avon Products gave back 7/8 to 28 3/4 and Estee Lauder lost 11/16 to 45 1/16, but Revlon Products climbed 1 1/4 to 10 3/4.

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