Retail Apparel Stocks Flat in June

Retail apparel stocks fared better in June than the overall market, finishing up by a negligible 0.3% compared to a 1.2% decline in the Dow Jones Industrial Average, which fell by 391 points in the month to 17,620.

G-III Apparel Group (GIII) jumped 23.7% to $70.35 after the apparel company, whose brands include Andrew Marc and Jessica Howard, and whose licenses include Calvin Klein, Kenneth Cole, Guess? and Tommy Hilfiger, reported stronger-than-expected first-quarter results. Net income surged more than sixfold to $6.8 million, or $0.15 per share, from $1.1 million, or $0.07 per share, in the year-ago period, topping analyst estimates of $0.08 per share. Revenue grew by more than 18 percent to $433 million from $366.2 million last year. The company also announced that it has formed a joint venture with Karl Lagerfeld Group BV to bring women’s apparel, women’s handbags and men’s outerwear carrying the Lagerfeld brand to North America.

Five Below (FIVE) rose 18.9% to $39.53, as the Philadelphia-based retailer known for its low-priced tween- and teen-oriented products beat Wall Street expectations with first-quarter results. Revenue grew 22 percent to $153.7 million, with same-store sales up by 1.7%. Net income increased 19 percent to $4.3 million, or $0.08 per share, from $3.6 million, or $0.07 per share, topping estimates by a penny. The retailer expects full-year revenue to exceed $820 million, with earnings per share of more than $1.03. The company opened 19 new stores in the quarter, bringing its total to about 385 in 23 states, and is on track to open 70 new stores and enter 6 new states in 2015, and another 85 openings in 2016.

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Cherokee (CHKE) gained 17.9% to $28.18 after the brand licensing company beat Wall Street forecasts with first-quarter results. Revenues increased 3 percent to $10.2 million, compared to expectations of $10 million. Net income was flat at $3.6 million, or $0.41 per share, beating estimates of $0.36 per share. During the quarter, the company ended its partnership with Tesco in the UK, and lost business when Target Canada closed its stores. However, it entered into a long-term license agreement with Sears Canada for the Cherokee and Liz Lange brands, and with Sports Direct for the Tony Hawk Signature apparel brand.

Oxford Industries (OXM) increased by 15.3% to $87.45 after the company posted a revenue increase of 7 percent to $260.4 million in the first quarter, beating estimates of $256.4 million. Sales gains were driven by exceptional performance at Lilly Pulitzer and solid growth in the company’s direct-to-consumer business at Tommy Bahama. Earnings gained 9 percent to $17.3 million. Adjusted for one-time gains and costs, per-share earnings were $1.30, more than the $1.21 per share expected by analysts. The company expects full-year revenue in the range of $970 million to $985 million. The stock is up by more than 58 percent so far this year.

Sears Holdings (SHLD), plunged by 37.8% to $26.40 after the company reported plans to spin off 254 ot its stores into a real estate investment trust (REIT). During the month the retailer also reported first-quarter results that, despite beating analyst expectations, were pretty grim: Revenue fell by $2 billion to $5.88 billion, and the net loss was $2 per share. Comparable store sales fell by almost 11 percent in the quarter, comprised of a 7 percent drop at Kmart and a 14.5% decline at Sears Domestic stores.

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Christopher & Banks (CBK) lost 30.1% to $4.01 after the specialty women’s apparel retailer reported that its first-quarter net income swung from a $2.6 million profit last year to a loss of $1.4 million this year. Total revenue fell by 11 percent from $103.4 million to $91.6 million. Same-store sales declined by 11.7%.

Vince Holdings (VINCE) lost 24.7% to $11.98 despite reporting impressive first-quarter sales and earnings growth. Sales increased 12 percent to $59.8 million, with direct-to-consumer revenue up by almost 34 percent to $21.6 million. Comparable store sales, which include e-commerce, rose by 9.7%. Net income increased by 77 percent to $2.5 million, or $0.06 per share. The company lowered its full fiscal year guidance based on current business and economic trends, however. BofA/Merrill downgraded the company’s stock from “buy” to “neutral.” The stock has lost 54 percent of its value year-to-date.

Francesca’s Holdings (FRAN), owner of Francesca’s Closet boutiques, lost 14 percent to $13.47 after the women’s specialty retailer met Wall Street guidance in the first quarter, but lowered full-year guidance due to a decline in store traffic and transaction count. Total revenue in the period was $95 million, up 11 percent from the prior year due primarily to the opening of 76 new boutiques since the first quarter of 2014, bringing the total store count to 589. Comps decreased 2 percent, however. Net income declined by 15 percent to $7.2 million, or $0.17 per share from $8.6 million, or $0.20 per share, in the prior year period.

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