Sector Snap: Retailers trading mixed

Retailers are mixed as disappointing quarterly reports, forecasts pressure stocks

Associated Press

NEW YORK (AP) -- Shares of retailers were mixed on Friday as a flurry of disappointing quarterly reports and cautious forecasts dampened investor sentiment.

Many retailers had difficulty in the first few months of the year, hurt by poor weather and new economic pressures on its customers, including a rise in the payroll tax.

The latest round of earnings reports included Abercrombie & Fitch Co., which announced a bigger-than-expected first-quarter loss earlier on Friday. The chain's revenue also missed Wall Street's view, and it lowered its full-year earnings forecast.

Shares of Abercrombie, which is still fighting off backlash from some comments CEO Mike Jefferies made seven years ago that recently went viral, dropped $5.23, or 9.6 percent, to $49.14 in midday trading.

Abercrombie's earnings came on the heels of divergent reports from Gap Inc. and Sears Holdings Corp. late Thursday.

Gap, which owns The Gap, Old Navy and Banana Republic clothing chains, posted a 43 percent jump in its fiscal first-quarter net income. Earnings topped analysts' estimates, while revenue matched expectations.

But Gap was cautious going forward, maintaining its full-year earnings outlook of $2.52 per share to $2.60 per share. This is below the $2.72 per share that Wall Street predicts.

The company's stock fell $1.07, or 2.6 percent, to $40.29.

Sears posted a larger-than-expected loss for the first quarter on slumping sales. The company also announced that it is considering selling its protection-agreement business in an ongoing effort to raise cash as it struggles to reverse its fortunes.

Shares of Sears Holdings Corp. declined $8.45, or 14.5 percent, to $49.72.

On Wednesday Target Corp. reported a 29 percent drop in its first-quarter profit. Adjusted earnings topped analysts' expectations, but revenue fell short of estimates. In addition, the Minneapolis company lowered its annual profit guidance.

In midday trading Friday, shares of Target added 86 cents, or 1.3 percent, to $69.63.

Nine days ago Macy's Inc. said that its first-quarter profit climbed 20 percent and beat analysts' expectations. Revenue came in just shy of Wall Street's view. The retailer, which runs its namesake stores and Bloomingdale's, reiterated full-year earnings between $3.90 and $3.95 per share. This is in range of the $3.92 per share that analysts forecast.

Macy's stock gained 13 cents to $49.11 by midday Friday.

A day after Macy's announced its results the world's biggest retailer, Wal-Mart Stores Inc., posted just a slight increase in its first-quarter profit. The discounter also provided a second-quarter profit outlook that came in below Wall Street's projections.

Wal-Mart's stock rose 69 cents to $77.02 by midday Friday.

J.C. Penney Co. also disclosed its quarterly results last week. The struggling department store operator's first-quarter loss widened on a 16 percent decline in revenue. It was the fifth-straight quarter that the company had posted large declines.

J.C. Penney's adjusted loss and revenue fell short of analysts' estimates. Its stock shed 41 cents, or 2 percent, to $18.98 on Friday.

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