Retail industry is getting attractive
Today's Financial News - Posted October 8, 2009
The downtrodden retail industry is on the move today. Thanks to good news from companies like Liz Claiborne (NYSE:LIZ) and Wet Seal (NASDAQ:WTSLA), investors are putting some profits in their shopping bags.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): Prepare for the worst. Hope for the best. That’s the motto of the nation’s retail industry these days.
With consumers stitching their wallets shut and retailers slashing their margins in an attempt to attract the few Americans left that are willing to spend, expectations are not high for stores setting up shop in the nation’s malls.
But with low expectations come big surprises.
With the first batter of the latest earnings season, Alcoa (NYSE:AA), hitting a triple last night, optimism is on the rise. Thanks to some better-than-expected same-store sales figures this morning, the high hopes are raising the mood for the retail industry.
The morning’s leader board is filled with the names of clothing sellers once tossed aside to the ravens of Wall Street.
Tandy Leather Factory (AMEX:TLF) is taking its shareholders on a ride to new yearly highs after it announced a September sales figure significantly larger than expected. Compared to last year’s figures, comparable monthly sales rose by 14%.
The surprising action has sent shares of the leather retailer up by double-digit proportions so far today, adding to the triple-digit gains already created as the stock more than doubled in value from its March lows.
Better than nothing
While the news from Wet Seal (NASDAQ:WTSLA) is not quite as positive, word of better-than-expected shares has created a profit opportunity for its shareholders.
As a player in the women’s specialty market, Wet Seal has plenty of competition as it fights for what’s left of the nation’s discretionary spending. That’s why analysts were expecting a sales decline of 7.8% from last September’s figures.
But now that the company tells us the figure was actually a decline of just 4.5%, investors are wondering if this is a good buying opportunity. With shares up by over 5% on the day, its obvious plenty of investors are increasingly bullish.
Finally, while the 30% surge from Liz Claiborne (NYSE:LIZ) has little to do with past sales figures, it has everything to do with the company’s future sales growth.
Shares of the clothing designer and marketer are surging on the news the company has signed an exclusive deal with J.C. Penney (NYSE:JCP). The word is J.C. Penney will have sole access to the Liz Claiborne and Claiborne brands.
The contract is good news for the cash-strapped firm as it includes guaranteed minimum profit sharing, royalty payments and design service fees.
While I am weary of the long-term sustainability of today’s surge forward, there is no denying the surprisingly good figures are a sign that the devastated retail industry still shows signs of life.
A lot of innings remain to be played in the current earnings season. So far, the bulls are ahead. But the game is far from over.
Next Article: Today’s top 3 penny stocks
One Response to “Retail industry is getting attractive”
Your comments are welcome
Follow TFN via RSS or Twitter |
 |
 |
 |
Advertisement
Latest Headlines
- The Big Picture for Sinobiopharma, Inc. (SNBP)
- Beazer Homes USA, Inc. (BZH) and Hovnanian Enterprises, Inc. (HOV) up despite horrid housing news
- The FDA catalyst: 2010 moves in MannKind (MNKD), Roche Holding (RHHBY), Acorda Therapeutics (ACOR) show it still works!
- Steepest drop since Feb. 2009: Here we go again!
- Is the silver run over? Coeur d’Alene Mines (CDE), Silver Wheaton (SLW), Alto Group (ALTO), Hecla Mining (HL), Endeavour Silver (EXK) close down
October 22nd, 2009 at 5:29 pm
Hartmann’s experience as both on-air talent and being a program director back in the 1960s and 1970s – that progressive talk radio could be a profitable format if done right. ,