5 Retail Apparel Stocks to Watch

Apparel retail stocks rose by an average of 2.5% in March, outperforming the Dow Jones Industrial Average, which fell by 2 percent in the month.

Some standout retailers surpassed the sector average in the month by large margins, mostly due to quarterly earnings news that exceeded expectations.

Gordman’s (GMAN) more than doubled in price, rising 111.2% to $8.30 after reporting fiscal fourth quarter earnings of $2.3 million, or $0.12 per share, topping Wall Street expectations of $0.07 per share. The Omaha-based department store posted revenue of $203.9 million in the period. Shares are up by more than 200 percent so far in 2015.

Delta Apparel (DLA) gained 39 percent to $12.30 after announcing it had completed the sale of its The Game branded collegiate headwear and apparel business to MV Sport-owner David Peyser Sportswear for approximately $14.5 million paid in cash at closing and an additional half-million-dollar payment based on contingencies. Delta’s chairman and CEO Robert W. Humphreys said in addition to further strengthening Delta’s balance sheet, the sale will enable the company to focus on areas of its business that are more strategic to its long-term goals.

Oxford Industries (OXM) gained 37.1% to $75.45 after the owner of the Tommy Bahama and Lilly Pulitzer brands posted fiscal fourth-quarter net income of $15.8 million, or $0.96 per share. Adjusted for non-recurring costs, earnings were $1.08 per share, beating Wall Street estimates of $1.04 per share. In the current quarter ending this month, the company expects its per-share earnings to range from $1.15 to $1.25. Analysts were expecting $1.02.

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BonTon Stores (BONT) jumped 25.4% to $6.96 after the York, Pennsylvania-based department store pleasantly surprised analysts with net income of $71.7 million, or $3.55 per share, on revenue of $963.5 million in its fourth fiscal quarter. The operator of BonTon, Bergner’s, Carson’s, and other nameplates declared a cash dividend of $0.05 per share on stock payable to shareholders of record as of April 17, 2015.

Tily’s (TLYS) leaped 24.6% to $15.65 after the Irvine, California-based teen skate retailer posted fiscal fourth-quarter net income of $7.1 million, or $0.25 per share, beating Wall Street expectations of $0.22 per share. Revenue in the period was $152.8 million, beating estimates by a million. For the year, the company reported profit of $14.1 million, or $0.50 per share on revenue of $518.3 million. The retailer’s shares have risen by 61.5% so far this year as turnaround efforts have begun to show signs of success.

The worst-performing industry stocks didn’t generate much industry news in the month.

Stein Mart (SMRT), one of the top performers in February, did an about-face and dropped by 24.3% in March to $12.45 after disappointing investors with fourth-quarter earnings of $12.3 million, or $0.27 per share, on revenues of $387 million, missing estimates. The apparel retailer’s shares have declined by almost 15 percent so far in 2015.

Vince Holdings (VNCE) lost 18.4% to $18.55 after the company, which was spun off from Kellwood in an IPO last year, beat fourth quarter profit forecasts but missed revenue targets and provided bleaker-than-expected guidance for the current fiscal year.

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Aeropostale (ARO), fell 13.9% in March to $3.47. The teen specialty retailer’s fourth-quarter net loss narrowed to $13.5 million, or $0.17 per share, from $70.3 million, or $0.90 per share in the prior year period. On an adjusted basis, earnings of $0.01 per share beat expectations of a $0.03 loss. Revenues of $593.8 million fell slightly short of the expected $595 million, and comps dropped by 9 percent. The retailer expects a loss in the current quarter that is wider than the $0.35 loss Wall Street expected. The Street lowered the stock’s rating to “sell,” citing deteriorating net income, high debt management risk, poor margins and weak cash flow.

Abercrombie & Fitch (ANF) lost 10.9% to $22.04 after posting lower-than-expected fourth-quarter revenue of $1.12 billion, down 14 percent from the prior year period. Analysts had been hoping for $1.17 billion. Comparable store sales fell by 10 percent in the quarter. Net income of $1.15 per share was in line with expectations.

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