Apparel Retailers Sales Rise in March

123jump.com Staff
12 Apr, 2007
New York City

Stocks pushed higher as investors looked past warnings of lackluster retail sales and a greater-than-expected increase in weekly jobless claims. apparel retailers showed a better than expected same store sales growth. Mothers Work, Abercrombie & Fitch, Pacific Sunwear, and United Retail reported rising same store sales. Nordstrom reported 15% rise in same store sales. Wal-Mart sales rose 4%. Warm weather and early Easter helped retailers

[R]2:30PM NY, U.S. Market Movers[/R]

Abercrombie & Fitch Co. ((ANF)) said its same-store sales grew 7% in March, easily beating analysts'' expectations. Year-to-date, same-store sales are up 1%, while total sales are ahead 20% to $537.8 million from $449.5 million. Shares climbed 5.05%.

Chico''s FAS Inc. ((CHS)) reported that its March sales number for the five-week period ended April 7, 2007, increased 22% to $191.2 million from $156.8 million reported for the five-week period ended April 1, 2006. Shares climbed 5.20%.

Pacific Sunwear ((PSUN)) sales surged 14.1%. Wall Street expected a 3.4% rise. Shares climbed 5.73%.

Advanced Magnetics Inc. ((AMAG)) reported positive results from two additional late-stage trials of its intravenous iron-replacement therapy in patients with chronic kidney disease. Shares of the company rose 9%.

Apogee Enterprises ((APOG)), designer and maker of glass for windows, said its fourth-quarter net income increased 81% to $9.68 million, or 34 cents per shares compared with $5.35 million, or 19 cents per share a year earlier. Revenue climbed 17% to $206.2 million versus $175.6 million in the same period a year earlier. For fiscal 2008 the company expects revenue to grow 9% to 12%. The company raised its 2008 continuing operations per-share earnings guidance to a range of $1.27 to $1.37 from a range of $1.20 to $1.30. Shares climbed 10.9%.

ClickSoftware Technologies ((CKSW)) said it''s signed an agreement with an undisclosed document management company. Shares climbed 13.6%.

Collegiate Pacific Inc. ((BOO)) forecast third-quarter revenue that was in line with analysts'' estimates. For the period, the company said it expects revenue of about $63 million. Shares of the company rose 12.9%.

Fastenal Co. ((FAST)), which operates stores that sell industrial and construction supplies, said its fiscal first-quarter profit rose 13% on an equal increase in revenue. For the quarter Fastenal earned $54 million, or 36 cents per share, compared with $47.9 million, or 32 cents per share, for the same quarter in 2006. Revenue increased 13% to $489.2 million versus $431.7 million in the year-ago period. Shares climbed 10.2%.

Mobius Management Systems Inc. ((MOBI)) agreed to be acquired by Allen Systems Group Inc., an enterprise software provider, for $10.05 a share in cash. The company said upon completion of the transaction, it will be a unit of ASG. The transaction is expected to close in the second or third calendar quarter. Mobius said it expects a fiscal third-quarter loss of 8 to 10 cents per share on revenue of $18.7 million to $19.2 million. Shares jumped 31.5%.

Mothers Work Inc. ((MWRK)) said sales at its stores open at least a year rose 3.6% in March, driven by an extra Saturday and the earlier timing of Easter. The company said March net sales rose 4.2% to $59.1 million due to an increase in same-store sales, and increased sales from its licensed relationship and marketing partnerships. Second-quarter net sales fell 0.5% to $143.9 million, as sales were hurt by significantly colder weather than last year in January and February, which hurt early sales of Spring merchandise. Shares climbed 9.6%.

United Retail Group Inc. ((URGI)), specialty retailer of large-size women''s fashions, said that its same-store sales climbed 11% in March due to a shift in the Easter holiday and a variety of merchandise. Shares climbed 6.8%.

American Oil & Gas Inc. ((AEZ)) said it will raise about $28.5 million in gross proceeds through offering about 6 million common shares. The oil and natural gas company said it would use the net proceeds of about $27 million to fund its drilling program and for general corporate purposes. Shares fell 12.5%.

ECtel Ltd. ((ECTX)) plunged 28.9% after it warned that first-quarter revenue would be well below expectations. The company sees revenue of $3.4 million to $3.6 million. The company said that revenue was lower than its internal work plan following both a delay in the receipt of previously anticipated orders and a delay in receiving acceptance for certain customer projects that are part of our backlog.

Nitches Inc. ((NICH)), apparel company, recorded a second-quarter net loss of $511,000, or 10 cents per share, compared with net earnings of $45,000, or a penny per share, in the same period a year earlier. Revenue climbed to $14.3 million against $12.3 million in the same period a year ago. In the latest quarter the company had unfilled customer orders of $28.1 million, compared with $22.4 million at the same time last year.


[R]1:00AM NY, 5:00 PM Frankfurt European stocks closed little changed.[/R]
European stock markets finished slightly lower on Thursday amid weakness in the shares of automakers Renault and DaimlerChrysler, pressured by higher oil prices. Merger news, involving food group Nestle and Nordic exchange operator OMX, failed to lift sentiment. European Central Bank provided some relief by leaving interest rates unchanged. Shares of Renault fell 0.8% after it said that vehicle sales declined 5.6% in March. DaimlerChrysler slipped 1.2% after WestLB disclosed that it holds 14% stake in the company for trading purposes and expects to cut this stake to below 3%.

In merger-and-acquisition news, Nordic stock-exchange operator OMX climbed 10% in Stockholm after it said that it''s in exploratory talks with several exchanges regarding possible forms of cooperation. In other deal news, Nestle, the world''s largest food company, slipped 1.1% after it agreed to buy the U.S. Gerber baby-food business from Swiss drug maker Novartis AG for $5.5 billion in cash. In the telecom sector, shares of Spanish carrier Telefonica lost 0.7% amid reports that it could launch a counterbid for the stake in Telecom Italia held by Pirelli''s holding company Olimpia. The U.K.''s FTSE 100 closed virtually flat at 6,416.40, while the German DAX 30 declined 0.1% at 7,142.95 and the French CAC-40 slipped 0.1% at 5,748.94.


[R]11:30AM U.S. market averages rebounded on bargain hunting.[/R]
U.S. stocks reversed from early losses, as investors turned to bargain hunting, looking past warnings of lighter retail sales in April, losses for Research in Motion and rising oil prices. The major averages benefited from significant strength among biotechnology, housing and chemical stocks. A leading gainer among biotech stocks and on the Nasdaq was MedImmune ((MEDI)) which surged 12% on news that it is considering a sale of the company. The Dow Jones Industrial was led higher by gains in Honeywell Inc. ((HON)), up 1.1%, Pfizer Inc. ((PFE)), up 1.2% and Dupont ((DD)), up 1%.

Utility and airline stocks continued to post declines, helping to limit the upside for the major averages. The notable increase by the price of oil contributed to some weakness in the oil-sensitive airline sector. AMR ((AMR)) fell 2.2% and JetBlue ((JBLU)) slipped 1.8%. Some computer hardware stocks also came under pressure, with shares of Research in Motion ((RIMM)), falling 9%. The Dow Jones industrial average rose 6.83, or 0.05%, to 12,491.45. The Standard & Poor''s 500 index rose 1.26, or 0.09%, to 1,440.13, and the Nasdaq composite index rose 7.12, or 0.29%, to 2,466.43. Bonds advanced amid concerns of weaker corporate profits. The yield on the benchmark 10-year Treasury note fell to 4.72% from 4.74% late Wednesday.

[R]Import and export prices rose sharply in March.[/R]
The Department of Labor released its report on import and export prices in the month of March on Thursday, showing that import prices rose sharply amid a significant increase in petroleum import prices. Export prices also increased compared to the previous month. The report showed that import prices surged up 1.7 percent in March following a revised 0.1 percent increase in February. This marked the biggest increase in import prices since May of 2006 and was largely due to a 9.0 increase in petroleum import prices. The Labor Department also said that export prices rose 0.7 percent in March, matching the increase that was seen in the previous month. The increase in export prices was due in large part to a 2.1 percent increase in agricultural export prices.

[R]Initial jobless claims steeply rose.[/R]
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended April 7, showing that jobless claims unexpectedly showed a notable increase compared to the previous week. The report showed that jobless claims rose to 342,000 from the previous week''s revised figure of 323,000. Economists had expected jobless claims to edged down to 320,000 compared to the 321,000 originally reported for the previous week.


[R]9:45AM U.S. markets opened lower on warnings of weaker retail sales in April.[/R]
Wall Street opened in the negative despite strong retail sales in March. The negative sentiment was generated by warnings of lackluster sales in the month of April. Wal-Mart ((WMT)) fell 0.7% following a stronger-than-expected results but a tepid outlook for April. Pier 1 Imports ((PIR)) lost 1% after reporting a decline in Q1 same-store sales and a larger year-over-year-quarterly loss. The retailer said that Q4 loss widened to 67 cents a share, from 11 cents a share. Among other retailers releasing monthly sales, Costco Wholesale Corp. ((COST)) posted 6% rise in comparable-store sales, topping estimates of 4.7% increase. Total sales rose 11% to $5.94 billion. The stock gained 1%. American Eagle Outfitters ((AEO)) rose 1.1% after the retailer said same-store sales jumped 20% in March, well ahead of the 11.1% expected by analysts. Abercrombie & Fitch ((ANF)) added 2.3% after posting 7% growth in March same-store sales, while Pacific Sunwear ((PSUN)) surged 7% as its March same-store sales rose 14%.

Technology stocks posted weakness, dragged by Research in Motion ((RIMM)) which fell 9.2% after the company said sales jumped 66% during the quarter but released disappointing Q1 forecast. The strong sales were contributed to strong demand for the company''s BlackBerry devices. The company also said that SEC started a formal investigation into the company''s stock option granting practices. Financial stocks moved to the upside, helped by subprime mortgage lender NovaStar Financial ((NFI)). The stock climbed 7% after it said it is considering new strategic alternatives and is open to buyout offers. Similarly, MedImmune Inc. ((MEDI)) surged 12% after it said it''s considering alternatives. In the first hour of trading, the Dow Jones industrial average fell 28.93, or 0.23%, to 12,455.69. The Standard & Poor''s 500 index slipped 1.57, or 0.11%, to 1,437.30, and the Nasdaq composite index fell 3.56, or 0.14%, to 2,455.75. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.72% from 4.74% late Wednesday.


[R]9:30AM FTSE 100 declines in mid-day trade on lack of fresh bid developments.[/R]
The UK market was lower in mid-day trading. The FTSE 100 fell 0.4 % to 6,387.4, a decline of 25 points.

Advancers

SABMiller rose 1.5% on news of strong lager volume growth. The group posted full year trading in line with expectations, but added that lager volumes grew 23% during the period, including organic growth of some 10%, which pleased the market.

Another strong performer was Vodafone, up 0.8%, after analysts at Deutsche Bank raised their rating on the stock to buy from hold.

Mid-cap JJB Sports gained 2.2% after its annual profit missed forecasts, but not by as much as some had feared in the run-up to the numbers.

Decliners

Scottish & Newcastle declined 3.4% after SABMiller seemed to reject speculation that it could bid for the brewer of John Smith bitter and Newcastle Brown Ale. J Sainsbury continued to fall, down a further 1% after CVC abandoned offer for the supermarket chain.

Hammerson, down 2.1% and also linked with possible bid interest from private equity, was hit by a broker downgrade. Lehman Brothers cut its rating on the stock to equal weight from overweight and reduced its price target

Companies exposed to the US suffered losses. Man Group, the world’s largest listed hedge fund, was 0.9% weaker. Wolseley, the plumbing goods supplier highly active in America, fell 0.8% to. Experian, the credit quality data provider, was 1.4% lower.


[R]9:00AM U.S. stock futures declined. Research in Motion weighed.[/R]
U.S. stock futures turned lower on Thursday, as investors digested warnings of weak retail sales and data showing higher-than-expected rise in jobless claims. First-time filings for state unemployment benefits rose 19,000 to 342,000 last week, reaching the highest level in two months. In another economic report, the Labor Department said U.S. import prices rose 1.7% in March, the biggest gain in 10 months, and above the average economist estimate of a 0.6% increase. Research In Motion ((RIMM)) also weighed on sentiment after it reported lower-than-anticipated quarterly results and gave a disappointing profit outlook. The stock dropped 6.8% in the pre-open. Further on the earnings news front, Genentech ((DNA)) said Q1 profit surged 68%.

Many companies reporting same-store sales figures before the opening bell exceeded expectations because of an earlier Easter holiday this year. At the same time, there were warnings that sales will be light during April. Wal-Mart ((WMT)) said Thursday its March same-store sales rose 4%, exceeding expectations of 1.6% increase. Total sales for the five-week period rose 11.7% to $34.26 billion. The company expects April same-store sales in the U.S. to be flat to down 2%, due to the earlier Easter holiday. Sales for the combined March/April reporting period are estimated to be between 1% and 2%.

J.C. Penney Co. ((JCP)) reported 10.6% increase in March same-store sales, higher than an earlier forecast for a high-single digit increase and a 1% decrease last year. The strong results were contributed by strength in apparel categories, benefiting from an earlier Easter. Analysts had expected its same-store sales to rise 7.5%. Total company sales rose 10.7% to $1.71 billion. S&P 500 futures lost 2.90 points at 1,445.70 and Nasdaq 100 futures dropped 5.00 points at 1,807.75. Dow industrial futures fell 19 points at 12,535.


[R]8:45AM Asian stocks declined on Thursday on weakness in export-related stocks.[/R]
Asian markets ended mostly lower on Thursday. Japanese Nikkei 225 Average closed 0.7% lower at 17,540.42. Export-related stocks were hurt by the FOMC possible future hikes. Investor reaction led to profit-taking in large-caps, including Sony and Advantest. Sony shed 1.2%, Advantest sank 1.6%, Canon slid 2.1% and Toshiba slipped 0.6%.

The Hong Kong Hang Seng Index lost 0.3% to 20,380.21. Declines in China Mobile and Sinopec pushed the benchmark index lower after five straight days of gains. China Mobile fell 1% after rising 2.5% over the past five sessions. Sinopec fell 2% after gaining 12% over the last six trading days.

South Korean Kospi Index rose 0.8% to 1,525.61. The market closed at a record high, supported by strong gains by shipbuilders and KT&G, surging 3.8% on hopes of a higher share valuation after the company planned share buyback. Among shipbuilders, Hyundai Heavy Industries soared 3.7% and Samsung Heavy Industries rose 1.9%.

Taiwan Weighted Price Index slipped 0.1% to 8,075.20 and Australian S&P/ASX 200 advanced 0.1% to 6,142.80, while the Shanghai Composite Index gained 1% to 3,531.02. Hopes of strong corporate earnings drew more retail investors to stock markets, driving the key stock index to its ninth record close in a row.


[R]8:30AM Nestle bid $5.5 billion for nutrition company Gerber.[/R]
The biggest food and drink company in the World Nestle announced Thursday that it agreed to buy Gerber Products from pharmaceutical maker Novartis in a deal valued at $5.5 billion. Gerber is the leading company in the U.S. baby-food market with a 79% share. The deal follows Nestle''s purchases of the U.S. weight control company Jenny Craig and Novartis Medical Nutrition. The acquisition will help the company''s nutrition business generate annual sales of close to $8.2 billion and around $1.95 billion this year. Nestle firstapproached Gerber in 1994, but lost to Sandoz AG, which later merged with Ciba-Geigy to form Novartis. The deal is expected to be completed during the second half of 2007.


[R]8:00AM NY-7:00PM Mumbai Sensex finishes with a loss tracking weak global markets.[/R]
The Sensex on BSE ended 69.43, or 0.53%, lower at 13,113.81. The market-breadth was weak as there were almost three decliners for every two advancers. As 1,090 stocks advanced, 1,466 declined and 74 stocks were unchanged. The turnover on BSE was Rs 3,127 crore compared to Rs 3,952 crore on Wednesday. On NSE, the turnover was Rs 7,078.44 crore, lower than Rs 8,441.09 crore on Wednesday.

Economic news

Jet Airways today cut a deal to buy out Air Sahara for Rs 1,450 crore after clearance by a three-member arbitration panel.

Industrial production advanced 11% in February 2007 from a year earlier, slightly lower than upwardly revised annual growth of 11.4% in January 2007. Manufacturing production, representing more than 75% of industrial output, advanced 12.3% in February from a year earlier, compared with a revised 12.1% annual growth in January.

The GSM subscriber base increased with more than 6.13 million new additional subscribers in March reaching the total base to 121 million. This is the highest ever subscriber addition for the GSM industry since its inception.

Trading highlights

Debutant Orbit Corp was the most-active stock with a turnover of Rs 185 crore followed by Indiabulls Real and Tata Steel.

Advancers

Jet Airways soared over 3% to Rs 629 after the company signed a deal to acquire Air Sahara for Rs 1,450 crore.

Bajaj Auto rallied 3% to Rs 2,349. Infosys surged 2.5% to Rs 2,044. Infosys led gain in IT shares ahead of the announcement of Q4 March 2007 results by the IT large-cap on Friday. Concerns have been raised that the fiscal year 2008 guidance by Infosys may turn out conservative. Satyam Computer also gained 1% to Rs 446.

TCS rose 1.1% to Rs 1,204. Reportedly, Tata Sons is considering a $1 billion-plus overseas equity offering in Tata Consultancy Services to fund acquisitions. The offer may take place in six months and include the sale of new shares.

Grasim gained 1.7% at Rs 2,259. NTPC, Satyam and HLL were up around 1% each at Rs 160, Rs 446 and Rs 207, respectively.

Decliners

Oil exploration large-cap ONGC slumped 3.4% to Rs 853. leading the decliners among 30 Sensex constituents. It will invest over Rs 6700 crore to increase oil and gas output, and establish the first large power plant.

Tata Steel lost 3.2% to Rs 496 on 22.1 lakh shares traded on BSE. Tata Steel announced on Tuesday its board will meet on 17 April 2007, to consider proposals for raising equity funds to finance investment in a special purpose vehicle for the acquisition of steel maker, Corus Group.

ITC dropped 2.7% to Rs 156. HDFC Bank and Hero Honda slipped around 2% each to Rs 958 and Rs 628, respectively. Ranbaxy shed 3% to Rs 335. Ranbaxy Laboratories announced it had received approval from Canadian authorities to sell antibiotic cefprozil tablets and powder in Canada.

Auto shares declined. Car large-cap Maruti Udyog lost 2.9% to Rs 760, Tata Motors lost 1.5% to Rs 710 and Hero Honda shed 1.4% to Rs 631.10.

Banks lost under selling pressure. State Bank of India shed 1.3% to Rs 968.45 and ICICI Bank lost 1.1% to Rs 849. Banking credit growth dropped to 27% in 2006-07 from 29.6% growth a year earlier, as a result of tighter monetary policy since December 2006.

[R]7:00AM European markets were lower on Thursday on a weak US market close overnight.[/R]
European markets were lower on Thursday. By mid morning, Frankfurt Xetra Dax slipped 0.4% to 7,122.27, the CAC 40 in Paris shed 0.5% to 5,720.98 and London FTSE 100 lost 0.4% to 6,390.2. National benchmarks fell in all 18 western European markets.

Advancers

ThyssenKrupp, the German steelmaker, gained 1.8% after saying it expected pre-tax profit growth of at least 4 billion euros in the mid term.

Carrefour, the French retailer, reported after the close on Wednesday a 5.2% rise in first-quarter sales, and reiterated that it may review calls for a sale of some of its property assets. Shares slipped 0.2%.

Carphone Warehouse Group rose 0.5%. Europe largest mobile-phone retailer has withdrawn from the auction for Pipex Communications, a U.K. broadband firm with 600,000 subscribers.

SABMiller gained 1.6% after the brewer of Pilsner Urquell and Miller Lite stated it sold 10% more beer in its past fiscal year, excluding the effects of acquisitions, as demand increased in South America and China.

Decliners

Eiffage, the French construction company, led the decliners on expectations that a large stake in the company will be sold by Spanish rival Sacyr Vallehermoso, which owns 33% of the shares. Eiffage shares fell 6.7%. Shares in Sacyr Vallehermoso fell 2.7% as investors took profits after two days of gains.

DaimlerChrysler dropped 2.2%. Lafarge, the world largest cement maker, decreased 1.3%. The U.S. is the biggest market for Daimler while the Americas account for the second-biggest slice of the sales of Lafarge.

Siemens AG, engineering company, dropped 1.6%. Siemens said the one-month delay for the spinoff of its VDO automotive parts unit won''''t have an impact on the planned initial public offering of the division.

Oil and precious metals

Oil rose for a third day as a report that U.S. refineries were raising production spurred expectations demand for crude will grow. Oil for May delivery rose as much as 41 cents, or 0.7%, to $62.42 a barrel in after-hours electronic trading on the New York Mercantile Exchange and traded at $62.36. Brent crude for May settlement rose as much as 35 cents, or 0.5%, to $68.19 a barrel in electronic trading on the ICE Futures exchange in London.

Gold gained on speculation a decline in the dollar against the euro will increase demand for the metal as an alternative investment. Gold for immediate delivery climbed $1.10, or 0.2%, to $678.40 an ounce. Palladium for immediate delivery rose $6, or 1.6%, to $373 an ounce. Silver dropped 3 cents to $13.835 an ounce and platinum advanced $1.50 to $1,269 an ounce.

Currencies

The euro gained slightly on against the dollar on Thursday, trading around two-year highs as the European Central Bank prepared to deliver its verdict on euro-zone interest rates. The euro bought $1.3449 in morning European trading, up from $1.3427 in New York late Wednesday. The British pound fell slightly to $1.9744 from $1.9753, while the dollar rose to 119.42 Japanese yen from 119.30 yen.