H&M Drag European Retailers; French Unemployment

Mayank Mehta
24 Sep, 2009
New York City

Retailers in Europe declined after H&M reported weaker than expected earnings rise of 4%. August same store sales fell 11%. Carlsberg A/S declined after Russia lifted duty beginning next year to 2012. France reported 2.55 million people looking for work in August.

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – Retailers in Europe declined after H&M reported weaker than expected earnings rise of 4%. August same store sales fell 11%. Carlsberg A/S declined after Russia increase lifted duty beginning next year to 2012.[/R]

European markets dropped after U.S. home sales decline in August and the talks of U.S. Fed unwinding some of the stimulus program.

In London FTSE 100 Index closed lower 60.10 or 1.17% to 5,079.27, in Paris CAC 40 Index decreased 63.43 or 1.66% to close at 3,758.36, in Frankfurt DAX index lower 96.84 or 1.70% to close at 5,605.21. In Zurich trading SMI decreased 74.39 or 1.17% to close at 6,275.44.

Labor Minister Xavier Darcos estimated an increase of approximately 40,000 people looking for jobs in August and 640,000 additional for 2009. Darcos was interviewed on RMC radio.

After the market close the French labor ministry reported number of people looking for jobs in metropolitan regions at the end of August increased to 2.55 million, 0.7% increase from July and 25.8% increase from a year ago.

For all of France the unemployed increased to 3.7 million, 0.9% increase from July and 20.4% surge from a year ago.

Gainers & Losers

Air France-KLM decreased 3.4% to €12.39 after the airline said the negative trends will reverse only in 2010 and earnings are not likely to recover before the second half of next year.

Audika SA declined 1.0% to €21.76 after the hearing aids distributor was downgraded to “neutral” from “buy” at Goldman Sachs Group Inc.

E.ON AG fell 0.8% to €28.49 on the newspapers reports that the company is close to a swap deal with Electricite de France SA although the company denied plans for a new sale of a 20% stake in British Energy.

Gruppo Coin SpA added 1.4% to €3.79 an apparel retailer said first-half revenues rose 5.6% to €572.4 million from €541.8 million a year ago. Net profit in the first-half rose 125% to €4.5 million compared to net profit of €2 million a year ago.

Hochtief AG the construction company fell 1.7% to €53.62.

H&M declined 4.3% to Skr391after it reported third quarter revenues rose 12.7% to SEK27.6 billion from SEK24.5 billion a year ago. Net profit in the quarter rose 4% to SEK3.46 billion or SEK4.18 per diluted share compared to net profit of SEK3.33 billion or SEK4.02 per share a year ago. Same store sales at locations opened at least a year fell 11% in August, fourth monthly decline in a row.

Hypo Real Estate Holding AG an international real estate financing company closed unchanged €1.52.

Immoeast AG a real estate investment company said first quarter revenues rose 92% to €84.7 million from €162.2 million a year ago. Net profit in the quarter was €110.2 million or 0.13 per diluted share compared to net loss of €52.6 million a year ago.

Interseroh SE the provision of solutions for integrated waste management rose 0.7% to €44.81.

Neurones SA added 3.3% to €6.50 after the computer-services company said it expects revenues of over €210 million and operating margin between 7.5% and 8.5% for fiscal year 2009.

Porsche Automobil Holding SE added 1.4% to €51.64 after the carmaker was upgraded to “buy” from “neutral” at Nomura Holdings Inc.

Rougier SA the tropical-wood trader fell 9.5% to €24.70.

Schneider Electric SA decreased 0.9% to €72.56 after the maker of circuit breakers was downgraded to “reduce” from “add” at AlphaValue.

France based integrated energy company Total SA dropped 0.5% to €41.29.

Vallourec SA fell 1.4% to €121.20 after its fully-owned subsidiary VAM Drilling reached to acquire Dubai-based DPAL FZCO, a supplier of drill pipes, owned by Soconord Group.

DAX Index Movers

Infineon Technologies AG led the decliners in the DAX index of 5.49% followed by losses in Allianz SE of 3.82%, in Commerzbank AG of 3.34%, in Deutsche Bank AG of 3.08%, in Siemens AG of 2.75%.

Fresenius SE led gainers in the DAX index with a rise of 1.34% followed by increase in Merck KGaA of 0.52%, in Linde AG of 0.15%.

CAC-40 Index Movers

Total S.A. led the decliners in the CAC-40 index of 3.36% followed by losses in Bouygues SA of 3.24%, in Alcatel Lucent of 3.00%, in STMicroelectronics N.V. of 2.94%, Schneider Electric SA of 2.57%.

PSA Peugeot Citroen S.A gainers in the CAC-40 index with a rise of 0.10% followed by gainers in LVMH Moet Hennessy Louis Vuitton SA of 0.01%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 13 increased, 87 declined and 2 were unchanged.

Wolseley Plc decliners in the FTSE 100 index with a loss of 4.46% followed by losses in Rexam Plc of 4.28%, in British Airways Plc of 4.22%, in Land Securities Group Plc of 4.00%, in Kazakhmys Plc of 3.81%.

Autonomy Corporation Plc led gainers in the FTSE 100 index with a rise of 3.33% followed by increase in Old Mutual Plc of 3.02%, in Intertek Group Plc of 2.41%, in Carnival Plc of 2.30%, in Imperial Tobacco Group Plc of 1.07%.