Retailers Post Mixed January Sales

Elena
08 Feb, 2007
New York City

The retailers reporting upbeat results included Limited Brands and Wet Seal, while Costco Wholesale and Bebe Stores posted disappointing sales results. Limited reported an 11% gain in same-store sales, beating the 7.8% forecast. Costco said that January same-store sales rose 2%, missing estimates of 3% increase. Gap Inc. announced flat January same-store, exceeding estimates of a decline of 7.7%. Abercrombie & Fitch reported same-store sales drop of 6%, missing expectations of a drop of 1.9%.

[R]8:30AM Retailers reported mixed January same-store sales.[/R]
The U.S. retailers reported Thursday morning mixed results in January, blaming belated cold winter weather which prevented merchants from clearing out winter inventory. However, the strong sales of holiday gift cards provided a lift. The retailers reporting upbeat results included Limited Brands and Wet Seal Inc. Wal-Mart Stores beat analyst estimates, despite the modest advance. Costco Wholesale and Bebe Stores stood out in the group posting disappointing sales results.

Wal-Mart ((WMT)), the world's largest retailer, posted a modest 2.2% increase rise in same-store sales, beating the 1.8% estimate. Limited Brands ((LTD)) reported an 11% gain in same-store sales, beating the 7.8% forecast. American Eagle Outfitters ((AEOS)) reported a 17% increase in same-store sales, above the 10.9% forecast. Federated Department Stores Inc. ((FD)) said January same-store sales rose 8.6%, beating forecast of 4.6%. Total sales rose 19% to $1.78 billion. The retailer projected Q4 net income of $1.55 a share to $1.60 share, higher than its earlier forecast of $1.40 to $1.50 a share. BJs Wholesale Club Inc. ((BJ)) said January same-store sales rose 3.5%, beating forecast of 1.5% increase. Total sales increased by 8.5% to $724.2 million. Wet Seal ((WTSLA)) reported a 3.6% gain in same-store sales, above the 2.2% estimate.

The Gap Inc. ((GPS), apparel retailer, announced flat January same-store, exceeding estimates of a decline of 7.7% for the month. Net sales rose to $1.19 billion from $955 million in the same period a year earlier. Looking ahead, the company said it expects earnings of 89 to 91 cents a share for 2006. Hot Topic Inc. ((HOTT)), teen retailer, said that its same-store sales dropped 6.6%, slightly above the 6.1% projection.

Among companies releasing lower-than-anticipated results, Costco Wholesale, ((COST)), warehouse retailer, said that January same-store sales rose 2%, missing estimates of 3% increase. Monthly total sales climbed 7%. Bebe ((BEBE)) posted a modest 0.8% gain in same-store sales, below the 1.9% previuosly expected.

Abercrombie & Fitch ((ANF)), clothing retailer, reported January same-store sales drop of 6%, coming in below expectations of a drop of 1.9%. Net sales rose 37% to $252.3 million. The retailer said sales in its fiscal 2006 rose 19% to $3.32 billion from $2.79 billion.


[R]8:00AM Asian stocks finish flat Thursday with Japan unchanged on profit-taking.[/R]
Asian markets ended flat on Thursday. In Japan, Nikkei 225 ended almost unchanged, down 0.1%, at 17,292.48. Tokyo Electric Power Co fell 5.6%, while Kansai Electric Power declined 3.4%. Japanese technology shares advanced on the strong earnings from Cisco Systems, which gained 3% overnight in US. NTT DoCoMo, the largest mobile-phone operator in Japan, rose 4.4%, while shares of KDDI advanced 1.8%. KDDI gained after Merrill Lynch updated its target price on strong subscriber growth. Canon also added 0.8%.

Australia S&P/ASX 200 closed flat at 5899.50. BHP Billiton and Woodside Petroleum both declined weighing on the resources sector after crude oil and other industrial commodities declined in New York. In Australian trading, BHP shed 2%, while Woodside Petroleum was down 1.1%. Hong Kong Hang Seng Index bucked the downtrend and edged 0.3% higher to 20,735.05. Shanghai Composite in China closed also up 0.8% at 2,737.73. However, other major indexes declined including Singapore Straits Times Index down 0.9% to 3,217.76, Taiwan Weighted Price Index off 0.1% to 7,842.22 and Kospi in South Korea 0.2% lower to 1,423.58. The yen lost against the dollar on fading expectations that the Group of Seven finance ministers will take steps to stop the decline of the currency at the summit that starts this Friday.


[R]6:30AM European stocks were flat on Thursday morning on profit-taking.[/R]
European markets were flat on Thursday morning. By mid morning, Frankfurt Xetra Dax was unchanged at 6,914.53, the CAC 40 in Paris inched up to 5,704.11 and London FTSE 100 was 0.2 per cent lower at 6,358.9.

Advancers

ABN Amro gained 1.6% after posting a 7.6% gain in annual net profit that topped market forecasts. The bank intends to raise shareholder returns in 2007 after concentrating on acquisitions and restructuring over the past two years. Julius Baer, Swiss bank, gained 6.1 per cent after reporting a forecast-topping 35 per cent rise in full-year net profit on growth in newly-developed Asian markets. MAN of Germany rose 3.4 per cent after Goldman Sachs updated the stock to buy and JPMorgan raised its price target. Fixed line telecoms groups advanced after After BT Group of Britain announced robust Q3 core earnings and a bright guidance as it continued to add new broadband customers. BT shares gained 3.8 per cent, while Deutsche Telekom gained 1.1 per cent, Hellenic Telecom rose 1.8 per cent and Telekom Austria climbed 1.4 per cent. Renault, the French carmaker, reported its 2006 operating margin declined on last year but that it achieved its 2.5 per cent target through cost cuts and improved quality. Renault shares gained 1.1 per cent.

Decliners

Altadis, the Spanish tobacco company, shed 2.8% after Imperial Tobacco of Britain said it its acquired US group Commonwealth Brands. Altadis had been supposed to be top of Imperial acquisition list - earlier on Thursday UBS had downgraded Imperial on the expectation it would launch a hostile bid. Syngenta, Swiss agrochemicals maker, posted a 12 per cent rise in full-year net profit which missed expectations, as sales declined 1 per cent. Shares fell 2.3 per cent. Dutch office supplies wholesaler Buhrmann plunged 10.1 per cent after falling short of expectations with Q4 underlying profit

Oil and gold

Oil prices recovered toward $58 on Thursday after cold weather cut fuel stocks in United States. U.S. Crude oil futures gained seven cents to $57.78 a barrel in early trade in London. Brent crude gained 20 cents to $57.43. Gold fell for a second straight day on signs supply to refineries is growing faster than demand from investors seeking an alternative to the dollar. Gold for immediate delivery dropped $1.90, or 0.3%, to $649.55 an ounce in early trade in London.

Currencies

The euro declined against the U.S. dollar on Thursday as markets awaited a decision by the European Central Bank on interest rates. The 13-nation euro bought $1.2986 in morning European trading, down from $1.3006 in New York late Wednesday. The British pound fell slightly to $1.9676 from $1.9692. The dollar gained traded at 121.09 Japanese yen, up from 120.66 yen on Wednesday.