Fred's Agrees to Buy Rite Aid stores; HD Supply, Hooker Plunge

Mukesh Buch
06 Jun, 2017
New York City

Calavo Growers net surged. Fred''s net swung to a loss but the retailer is committed to acquiring up to 1,200 Rite Aid stores. G-III Apparel lifted fiscal outlook. HD Supply plans to sell its waterworks unit to private equity firms for $2.5 billion. Hooker Furniture net jumped 88%.

[R]2:10 PM New York – Calavo Growers net surged. Fred''s net swung to a loss but the retailer is committed to acquiring up to 1,200 Rite Aid stores. G-III Apparel lifted fiscal outlook. HD Supply plans to sell its waterworks unit to private equity firms for $2.5 billion. Hooker Furniture net jumped 88%.[/R]

Tollbooth Index dropped 32.21 or 0.3% to 12,350.54.

Earnings Review

Calavo Growers, Inc ((CVGW)) soared 6.4% or $4.45 to $73.50 after the fresh food provider said revenues in the second-quarter ending in April jumped 23% from a year ago to $270.2 million.

Net income in the quarter surged 34% to $12.9 million or 74 cents per diluted share from $9.7 million or 56 cents in the same quarter last year.

Calavo Growers reaffirmed in fiscal 2017, revenue to jump by more than 20% and higher gross margin.

Conn''s Inc ((CONN)) tumbled 13.4% or $2.52 to $16.35 after the specialty retailer stated total sales in the first-quarter ending in April declined 12.3% from a year ago to $279.4 million.

Net loss in the quarter narrowed to $2.6 million or 8 cents per diluted share from $9.7 million or 32 cents in the same quarter last year.

The consumer goods retailer forecasted fiscal 2018 same store sales to plummet between 12% and 15% and retail gross margin between 37.75% and 38.25% and provision for bad debts between $52 million and $56 million and finance charges and other revenues between $78 million and $82 million.

Fred''s, Inc ((FRED)) dropped 5.5% or 75 cents to $12.85 after the retail discount stores operator said net sales in the first-quarter ending in April fell 3.1% from a year ago to $532.3 million.

Comparable store sales in the first-quarter declined 1.2%.

Net in the quarter swung to a loss of $36.5 million or 98 cents per diluted share from profit of $1.3 million or 3 cents in the same quarter last year.

Fred said it remains committed to purchasing additional assets, including up to 1,200 Rite Aid stores, and working collaboratively with Walgreens, Rite Aid and the FTC to obtain the approval.

G-III Apparel Group, Ltd ((GIII)) surged 22.3% or $4.44 to $24.33 after the apparel products maker and retailer reported net sales in the first-quarter ending in April soared 16% from a year ago to $529 million.

Comparable store sales in the first-quarter declined 1.2%.

Net in the quarter swung to a loss of $10.4 million or 21 cents per diluted share from profit of $2.8 million or 6 cents in the same quarter last year.

The apparel products maker lifted fiscal 2018 net sales estimated of about $2.76 billion and net income between $52 million and $57 million and diluted earnings per share in the range of $1.04 to $1.14.

Earlier the retailer forecasted net sales of about $2.73 billion and net income between $40 million and $45 million, and diluted earnings per share in the range of 80 cents and 90 cents.

HD Supply Holdings Inc ((HDS)) plunged 15.1% or $6.27 to $35.01 after the industrial products distributor reported net sales in the first-quarter ending in April jumped 5.2% from a year ago to $1.9 billion.

Net in the quarter swung to profit $85 million or 42 cents per diluted share from a loss of $10 million or 7 cents in the same quarter last year.

The industrial products distributor reaffirmed fiscal 2017 net sales between $1.32 billion and $1.37 billion and operating profit in the range of $200 million to $210 million and earnings per share in the range of 60 cents to 65 cents.

Separately today, HD Supply announced that it agreed to sell its Waterworks business unit to Clayton, Dubilier & Rice for a purchase price of $2.5 billion in cash.

The transaction is expected to close in the third-quarter of this year.

Hooker Furniture Corporation ((HOFT)) plummeted 11.5% or $5.10 to $39.05 after the home furnishings supplier stated net sales in the first-quarter ending in April advanced 7.4% from a year ago to $130.9 million.

Net income in the quarter jumped 88% to $4.7 million or 41 cents per diluted share from $2.5 million or 22 cents in the same quarter last year.

Lands'' End, Inc ((LE)) dropped 4.8% or 80 cents to $15.85 after the clothing, accessories and footwear retailer said net revenues in the first-quarter ending in April fell 1.8% from a year ago to $268.4 million.

Net loss in the quarter widened to $7.8 million or 24 cents per diluted share from $5.8 million or 18 cents in the same quarter last year.

Michaels Companies Inc ((MIK)) declined 7.9% or $1.57 to $18.26 after the arts and crafts specialty retailer reported total net sales revenues in the first-quarter ending in April were flat from a year ago to $1.2 billion.

Comparable store sales in the quarter decreased 1.2%.

Net income in the quarter rose 2% to $72.2 million or 38 cents per diluted share from $70.8 million or 34 cents in the same quarter last year.

SYNNEX Corporation ((SNX)) gained 1% or $1.13 to $112.15 after the outsourced services provider agreed to acquire North and Latin American business of Westcon-Comstor from South African information technology firm Datatec Ltd for about $800 million.

The transaction is expected to close in the third-quarter of 2017.