The U.S. stock market is opening mixed with limited economic reports. Several retailers delivered earnings this morning, with Francesca’s and Vera Bradley making investors happy, while Lululemon disappointed.
The S&P 500 is up by 2 points to 2,066, the Dow Jones Industrial Average is up 50 points to 17,618 and the Nasdaq is down by 16 points to 5,081.
Lululemon stock is hitting the mat this morning, losing over 5 percent of its value to trade near $49.19. At one point in pre-market trading, the stock sold off over 12 percent after the high-end yoga brand beat analyst estimates for earnings by a penny, but revenue missed expectations and the company lowered its outlook. Revenue was higher than last year at $479 million, but the expectation was $481 million. Income from operations for the quarter fell by 16 percent. Lululemon now expects the fourth quarter earnings to be in the range of $0.75 to $0.78, much lower than the expected $0.85.
Francesca’s delivered inline results for the third quarter, but guided higher for the fourth. The boutique retailer reported that revenues jumped 19.1 percent year-over-year to $103.7 million from $98.85 million, beating the FactSet estimate of $102 million. Earnings per share of $0.16 met expectations. The increase in net sales was driven by a 4 percent in comparable sales, helped by the addition of 81 new stores. Comp sales were up as the average transaction value increased. The stock is popping over 8 percent in early trading to sell near $16.71.
Vera Bradley stock is jumping by 24 percent to sell near $14.50 after the accessory company beat its earnings and revenue estimates for the third quarter and raised guidance. Revenue rose 1.2 percent to $126.7 million, easily beating the FactSet estimate of $121 million. Third quarter earnings per share of $0.27 topped the FactSet estimate of $0.20. Vera issued upside guidance for the fourth quarter for earnings in the range of $0.40 to $0.43. The company managed to do this even as it eliminated hyper promotions and cut back on discount days by 50 percent. The company said shoppers were responding well to its new products.
Yahoo has done an about face and decided not to spin off its stake in Alibaba, but instead may spin off its core business into a separately traded public company. The shares of Alibaba are worth $30 billion. The core Yahoo includes the online media and search businesses that have experienced shrinking revenue and profits as advertisers have shifted to other avenues. Several companies have been suggested as potential suitors including Verizon and AT&T. Yahoo stock, which has fallen 29 percent this year, gained 12 cents in early trading to move to near $35.
Elsewhere, Asian markets ended mostly lower with Japan and Hong Kong down slightly, while the Shanghai Composite rose slightly. The European indices also traded to the downside. Weakness in mining companies helped to pull down these markets.