Apparel Retail Stocks Outperform Dow in July

Retail apparel stocks rose 5 percent in July, beating the overall market, which declined slightly in the month. The Dow Jones Industrial Average dipped 0.8%, finishing the month at 17,690.

Here’s what’s been happening at some of the biggest gainers and losers in the past month:

Skechers (SKX) jumped 42.1% to $150.45 after the casual footwear company released quarterly earnings that blew past analyst estimates. Sales in the three months ended June 30 climbed to a record $800.5 million, beating analyst estimates of $736 million. Net income rose to $79.8 million, or $1.55 per share, far exceeding Wall Street expectations of $0.99. The Manhattan Beach, Calif.-based company also announced that Grammy-nominated singer and songwriter Meghan Trainor would appear in its global marketing and social media campaigns through 2017, joining a roster of celebrity spokespersons that includes Demi Lovato, Ringo Starr and Sugar Ray Leonard.

Columbia Sportswear (COLM) rose 27.6% to $71.54, as the Portland, Ore.-based activewear and outerwear company reported better-than-expected quarterly financial results. In the quarter ended June 30, sales increased 17 percent to $380.2 million, beating Wall Street estimates of $346 million. Net income was virtually flat, at a loss of $6.5 million, or $0.09 per share, better than the $0.23 per share loss expected by analysts. The company reported strong sell-thru for Spring 2015, and raised its full-year-earnings guidance. Scott Kerslake, co-founder and former CEO of Athleta, was named interim brand president at Columbia’s Mountain Hardwear division, replacing Topher Gaylord who will retire. Kerslake will continue in his current position as CEO of prAna, the yoga brand the company bought last year. In addition, Lisa Kulok was promoted to the position of SVP global supply chain operations and Steve Woodside was named SVP of global sourcing and manufacturing.

Under Armour (UA) gained 26.7% to $71.54 after the athletic apparel and footwear company reported second-quarter earnings that exceeded investor expectations. Revenue climbed 29 percent to $784 million and net income was $14.8 million, or $0.07 per share, down from $17.7 million, or $0.08 per share, in the prior year period but above Wall Street expectations of $0.05 per share. The company debuted its newest collection of sports bras accompanied by a star-studded roster of spokesmodels dubbed the “Under Armour Women of Will” that includes ski champion Lindsey Vonn, Gisele Bundchen, American Ballet Theater principal dancer Misty Copeland and pro surfer Brianna Cope. The company also announced that former Dallas Mavericks president and CEO Terdema L. Ussery has joined UnderArmour as president of global sports categories. The company opened a new office in Munich last week to support the brand’s aggressive global expansion plans and announced new sponsorship deals with teams including the St. Pauli football club and Germany’s top-ranked male beach volleyball team. The first of four UnderArmour shop-in-shops in SportScheck, Germany’s largest sporting goods retailer, will open in Munich in September.

Amazon (AMZN) increased by 24.9% to $536.15 after the company posted a rare and unexpected quarterly profit. In the company’s second fiscal quarter, revenue rose 20 percent to $23.2 billion, above the $22.4 billion expected by Wall Street, helped by growth in the cloud-computing business and successful initiatives to attract new customers. Net income was $92 million, or $0.19 per share, a huge swing from the $0.14 per share loss analysts expected. It was almost as if the e-commerce retailer, almost legendary for its tendency to eschew short-term profits in favor of reinvestment, decided to take a break from its long-term view and show investors it can make money if it wants to. The news caused a near-frenzy, pushing the stock up to a record price level of over $566, giving it a market capitalization greater than Walmart’s. The stock price subsequently settled down a bit, but still finished the month up by almost 73 percent year-to-date. The company’s first “Prime Day” held in mid-July, garnered tremendous consumer and press attention, and significantly drove up prime memberships.

Sears Holdings (SHLD) was the biggest loser among retail apparel stocks for the second month in a row, plunging 49.8% on top of a 37.8% drop in June, to $21.55 after the company completed the creation of a real estate investment trust (REIT), Seritage Growth Properties (SRG), to which it sold 235 of its stores and received $2.7 billion in return. The move is expected to buy the beleaguered department store retailer two and a half years of liquidity as it transitions to an asset-light membership model. Sears has leased back a majority of the properties it sold to Seritage. The company hired former Gymboree COO Joelle Maher as president and chief member officer.

Vince Holdings (VNCE) lost 38.4% to $9.81 after a series of top-level departures. CEO Jill Granoff announced her resignation in mid-July, three weeks after CFO Lisa Klinger abruptly resigned following the posting of yet another disappointing quarter. President and chief creative officer Karin Gregersen also decided to leave the company. Granoff will remain with Vince until a successor is found. Gregersen will apparently not be replaced.

Francesca’s Holdings (FRAN), owner of Francesca’s Closet boutiques, continued to slide, on top of a 14 percent share decline in June, dropping 22.5% in July to $12.16, bringing its year-to-date drop to 27.2%.

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