DailyFinance.com

FedEx Earnings Plummet as Consumers Seek Cheaper Options

The Associated Press — 2013-06-19T09:10:00+00:00

Filed under: Earnings, Transportation & Logistics, Stocks, Investing

Michael Penn/AP

By DAVID KOENIG

DALLAS -- FedEx Corp.'s fourth-quarter profit fell 45 percent as international customers traded down to less-expensive delivery options.

Excluding charges, the results still beat Wall Street expectations. But the company's forecast for the next 12 months was shy of Wall Street forecasts and shares fell in premarket trading.

The world's second-largest package delivery company said Wednesday that it earned $303 million, or 95 cents a share, in the fourth quarter ended May 31. That's down from $550 million, or $1.73 a share, a year ago.

FedEx (FDX) said that excluding restructuring costs and an aircraft write-down, it would have earned $2.13 a share, which beat analyst forecasts of $1.96 a share in adjusted earnings.

Sponsored Links

The company is trying to cut annual spending by $1.7 billion by 2016. The steps include buyouts intended to reduce the work force by at least 10 percent by May 2014.

FedEx said Wednesday that about 3,600 employees who applied for a buyout will leave the company. Of those, 40 percent left on May 31.

Severance and other restructuring costs totaled $496 million, or 98 cents a share, after taxes. The company also took a write-down of $100 million, or 20 cents a share, as it retired 10 airplanes during the quarter.

For the fiscal year that started June 1, the company forecast that adjusted earnings will grow between 7 percent and 13 percent. That would suggest a range of $6.67 to $7.04 a share. Analysts surveyed by FactSet were expecting $7.28 a share in the new year.

Fourth-quarter revenue rose 4 percent to $11.44 billion, just below analyst forecasts of $11.46 billion.

The shares fell 54 cents to $98.94 in premarket trading. Through Tuesday, they had gained 8.5 percent so far in 2013.

Chairman and CEO Fred Smith said the company's ground-services business remained strong and margins improved in the freight business during the fourth quarter.

"These positive developments did not fully offset tepid economic growth and customer preference for less costly international shipping services," Smith said in a statement issued by the company.

FedEx Express plans to further cut delivery capacity between Asia and the United States in July.

FedEx delivers shipments from businesses to consumers and other companies. Because its customers span so many industries, it's often seen as an economic bellwether.

The Memphis, Tenn.-based company has been dealing with a slump in high-end express-delivery services as customers try to save money by picking cheaper but slower shipping options.

%Gallery-187614%

Permalink | Email this | Linking Blogs | Comments

What to Watch on Wall Street: Grocers, Restaurants Provide Food for Thought

Rick Aristotle Munarriz — 2013-06-17T13:25:00+00:00

Filed under: Facebook, Earnings, Walt Disney, Retail, Restaurants

Getty Images

You can never know in advance what news will move the market in a given week, but some things you can see coming. From a mysterious media event unveiling at the world's most popular social networking website to a struggling restaurant operator's latest opportunity to impress investors, here are some of the items that will help shape the week that lies ahead on Wall Street.

1. Facebook Sends a Friend Request: There was no shortage of tech giants with major announcements last week, but now Facebook (FB) wants some time in the spotlight. The world's largest social networking website operator is inviting tech journalists to a press event at its Menlo Park headquarters.

"A small team has been working on a big idea," read the invitation. "Join us for coffee and learn about a new product." Is Facebook introducing its own coffee? If you think that, you probably read the invitation the wrong way. It's always fun to speculate on what Facebook is cooking up, but it's more than likely a new way to monetize its more than a billion active users.

2. When You're Here, You're Family: Things haven't been going so well at Darden Restaurants (DRI).
The parent company of Olive Garden, Red Lobster, and LongHorn Steakhouse has been struggling. Same-restaurant sales of the three flagship chains clocked in 4.6 percent lower than a year earlier in the company's most recent quarter.

Consumers have been moving away from casual dining. They're either trading up to more upscale fare or trading down to the fast casual eateries that provide quality food at lower prices without having to wait. We'll see if Darden is bouncing back on Friday with its next quarterly report.

3. Delivering the Goods: Analysts see Darden posting a decline in profitability this week -- and that's not a surprise -- but it is stunning to see FedEx (FDX) also expecting to post lower earnings this time around.

Sponsored Links

FedEx reports quarterly results on Wednesday, and Wall Street's bracing for net income of $1.96 a share -- surprising given that the speedy delivery service generated a profit of $1.99 a share a year earlier during the same period. Despite the recent decline in fuel costs, FedEx is slipping. Making matters worse, FedEx has actually missed analyst estimates in its two previous quarters, so maybe $1.96 a share is overly ambitious.

4. Monsters Ball: Disney's (DIS) Pixar has been a hit factory in the realm of computer animation, but the last time that the studio went for a sequel -- "Cars 2" -- critics panned the production. "Monsters University" -- a prequel to Pixar's popular "Monsters, Inc." -- opens on Friday. The original movie raked in $562.8 million in ticket sales worldwide.

Disney has already had a successful year at the box office. It has 2013's two highest grossing movies so far in "Iron Man 3" and "Oz The Great and Powerful." Given the way Disney can turn its animated features into merchandising goldmines, it's naturally hoping to land another big winner here that it can exploit through its theme parks, stores, and cable properties.

5. Groceries Check Out: Supermarkets have historically been all-weather investments. In good times and bad times, people have to eat. And when the economy hits those rough patches, more consumers switch to cheaper store-brand generics that actually deliver higher margins for grocers.

However, many supermarket investors have been burned lately. Some grocery store operators have slashed dividends, suspended payouts, and even sold off assets as their financial performances are slipping.

That hasn't been the case with Kroger (KR). The supermarket chain has been able to serve up consistent growth, delivering dividend increases along the way. Kroger reports on Thursday, and analysts see another period of top- and bottom-line growth.

%Gallery-155939%

Motley Fool contributor Rick Munarriz owns shares of Walt Disney. The Motley Fool recommends Facebook, FedEx, and Walt Disney. The Motley Fool owns shares of Darden Restaurants, Facebook, and Walt Disney. Try any of our newsletter services free for 30 days.

Permalink | Email this | Linking Blogs | Comments

As Interest Rates Rise, Banks Face New Stress Tests

CNNMoney — 2013-06-17T09:01:00+00:00

Filed under: Earnings, Federal Reserve, Treasury, Banks, Interest Rates

Justin Sullivan/Getty Images

By Stephen Gandel

Banks have mostly been tight-lipped about what rising interest rates would mean for their bottom lines. They will soon have to open up a little more to regulators and investors.

For the first time this year, the Federal Reserve is requiring nation's 18 largest banks to submit mid-year stress tests showing how they would perform if they were hit with a negative economic shock, like a spike in unemployment or interest rates. The results are due to the Fed on July 5. Unlike the bank stress tests conducted at the beginning of the year, though, the Fed won't run its own test, or publicly critique the results. Still, banks will be required to make the results public at the end of September.

On the eve of the submission, bankers are meeting with Fed officials next week in Boston at a closed-door symposium to discuss the stress tests. There has been some contention over the process in the past. Bank executives have expressed frustration that the Fed won't say how it gets its results. At a similar conference last year, Wells Fargo's (WFC) treasurer Paul Ackerman reportedly drew applause from bankers when he said he still didn't get how the Fed's loss estimates could be so different than his bank's.

Sponsored Links

On the list of topics for this year's meeting are residential loans, corporate loans and so-called counterparty credit risk, which is how much money one bank could lose if one of its trading partners goes bust. Putting a figure on that is one of the fuzziest parts of stress testing. In the past few months, regulators have stepped up scrutiny of corporate lending, questioning whether banks have made too many "covenant-light" and leverage loans.

But rising interest rates are sure to come up at the conference and in the mid-year stress tests. The yield on the 10-year Treasury bond has been rising recently, after being stuck near historic lows ever since the recession. The Fed included a sharp rise in interest rates as one of the shocks banks could face when it calculated potential trading losses in the stress test that were released in March. That was the first time the Fed had done that.

What's more, bankers say the Office of the Comptroller of the Currency has recently been questioning banks about interest rate risk. Last year, the OCC included rising interest rates in its report of top risks for banks.

It's hard to know how much banks would lose. Generally, banks have stuck to positives. Higher interest rates would allow the banks to charge more for loans. That could boost lending revenue and profits. But at the same time higher interest rates, and falling debt prices, have in the past caused big losses for the banks in their bond and loan portfolios. Banks have been less outspoken about that part of the rising interest rate story. But that might be changing.

Last week, at an investor conference, Bank of America's CFO Bruce Thompson indicated that the bank could lose as much as $11 billion in its bond and loan portfolio if interest rates were to rise 1 percent. He said that was as much as three times what Bank of America (BAC) would gain from higher rates in its lending business. But the bank might not have to realize those losses immediately, or ever if it holds the debt and borrowers end up paying. Still, the bank's capital could fall, which is something both investors and regulators have watched closely since the financial crisis, and something that would show up on the bank's stress test.

The best of times, worst of times story banks are telling about rising interest rates could end up being the other way around.

More from CNNMoney

%Gallery-187110%

Permalink | Email this | Linking Blogs | Comments

Lululemon CEO Christine Day Is Stepping Down; Stock Tumbles

Matt Brownell — 2013-06-10T17:15:00+00:00

Filed under: Earnings, Retail, Recalls, Shopping, CEOs

Kevork Djansezian, Getty Images

Lululemon Athletica (LULU) announced today in its quarterly earnings release that longtime CEO Christine Day will be stepping down once the company finds a new chief executive.

"Plans have been laid for the next five years and a vision set for the next ten," said Day in a statement. "Now is the right time to bring in a CEO who will drive the next phase of lululemon's development and growth."

Day has presided over a period of growth for the Canadian yoga apparel company, and this quarter it saw net revenue increase by 21% and same-store sales rise by 7%. Net income for the quarter rose slightly, from $46.6 million to $47.3 million.

That's a solid quarter, but still off the company's usual sales and profit growth results.

The reason, of course, is that the quarter was marred by a voluntary recall of black yoga pants after they were found to be too sheer. That has generated some embarrassing headlines, but the company has won praise for taking responsibility for the fiasco and responding promptly to customer complaints. The company also touted the fact that it replaced the offending pants in stores within 90 days.

Sponsored Links

Day's departure will undoubtedly be linked to the see-through pants scandal, though investors don't seem to be holding her responsible. Shares plunged more than 10% in after-hours trading, and given the quarter's financial results were about in line with what the company projected when the recall was announced in March, it's hard to see the dip as anything but a response to Day's departure.

The good news is that Day says she'll remain on as CEO until the search committee finds her replacement, so Lululemon fans and investors can be assured of a steady hand at the top for the time being.

Permalink | Email this | Linking Blogs | Comments

Market Movers This Week: Wintry Earnings and iRadio Buzz

Rick Aristotle Munarriz — 2013-06-03T11:38:00+00:00

Filed under: Company News, Apple, Earnings, Retail, Apparel, Investing

Getty Images

There's no guessing everything that will move the market this week, but there are some pieces of news we know will break in the coming days, from a fast-growing mattress retailer uncovering its financials to raft of fiscal details from retailers. Let's go over some of the items that will help shape the week that lies ahead on Wall Street.

1. Turn up the iRadio: Apple (AAPL) has been surprisingly absent from the streaming music revolution, but that may be about to change. Investors kicked off the new trading week with reports that Apple finally negotiated a deal with Warner Music, paving the way for the long overdue rollout of Apple's iRadio service.

Initial reports suggest that Apple isn't likely to announce anything this week. It has its annual developers conference next week, and that will likely be the moment when the consumer tech giant makes its streaming music service official.

However, you can probably expect a week of speculation about the service. Will it be free? Will it be only available through a paid subscription? Will Apple be able to strike deals with all of the major labels in time? June is going to be an important month for Apple, and it all starts now.

2. Tuesday Goes for Blackjack: Last week, the Dow Jones Industrial Average closed 1.2 percent lower during the holiday-shortened trading week, but the market still managed to move higher on Tuesday. That's important because it means that the Dow has now closed higher for 20 Tuesdays in a row.

Yes, that's an unusually long streak. You actually have to back to 1968 -- when the Dow moved higher for 24 consecutive Wednesdays -- to find the last time that the market kept closing higher for more weeks on the same weekday.

This week will be a challenging one. The late May selloff and the "sell in May and go away" crowd may be working against the market's favorable momentum. If the popular index that tracks 30 blue chips closes lower on Tuesday it will be the end to a pretty impressive streak that's unlikely to be repeated anytime soon.

3. Getting a Good Night's Sleep: With new home sales up and low refinancing rates motivating homeowners to spruce up their properties, home improvement industries are thriving: So if you're making your house more comfortable in other ways, how about replacing your lumpy old mattress?

Sponsored Links

Mattress Firm (MFRM) is a leading seller of bedding products. As a publicly traded company in a highly fragmented niche, Mattress Firm has been snapping up smaller regional rivals to form an even bigger mattress merchant. It's been paying off. The stock has nearly doubled since Mattress Firm went public at $19 less than two years ago. Analysts see double-digit revenue and earnings growth when Mattress Firm reports on Tuesday.

4. Retailers on Parade: How did your favorite clothing or department store do last month? Many leading chains will be reporting their same-store sales for the month of May later in the week.

It won't be the only snapshot that we get about the state of retail. Several publicly traded retailers also happen to be reporting their latest quarterly results this week. Quiksilver (ZQK), Dollar General (DG), rue21 (RUE), and Francesca's Holdings (FRAN) are some of the specialty apparel companies reporting this week.

In concert, the reports will provide a fair overview of the retail industry because they do appeal to different demographics. Quiksilver sells outdoor sports apparel to a younger extreme sports crowd. Dollar General is a deep discounter. Francesca's and rue21 target fashion-forward women shoppers. Don't read too much into one hit or miss. Watch for the more important trend of where the chains combined are reporting updated financials that are better or worse than the market is expecting.

5. Hitting the Slopes: We're wrapping up what many ski resorts call mud season. This is the springtime shift as snow starts to melt, and many of the seasonal resorts wait for the slushy mud to turn to inviting lush greens for golfers, hikers, and other summer travelers.

This doesn't mean that investors should ignore Vail Resorts (MTN) when it reports its latest financials on Thursday. This is actually the Colorado ski resort operator's biggest quarter covering the snow-blessed months of February, March and April. Analysts see Vail Resorts posting 42 percent of its revenue and more than double its earnings for the entire fiscal year. Yes, Vail Resorts is expected to post a quarterly profit that is twice as large as its annual profit -- because historically, it has lost money during the two warm-weather quarters.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple and Vail Resorts. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days.

Permalink | Email this | Linking Blogs | Comments

Stocks Slide; Procter & Gamble Is the Dow's Biggest Loser

DailyFinance Staff — 2013-05-31T16:30:00+00:00

Filed under: Earnings, Retail, Market News

Stocks tumble as traders do some profit taking.

The Dow Jones Industrial Average (^DJI) slid 209 points, ending near its lowest level of the day. Most of the selling came in the final 30 minutes of trading. The S&P 500 (^GSPC) lost 23 and the Nasdaq (COMPX) dropped 35.

All three indexes edged lower for the second week in a row -- the first back-to-back weekly losses since last November.

Getty Images

Procter & Gamble (PG) was the biggest loser among the Dow's 30 stocks, leading the consumer staples sector lower. P&G fell more than 2 percent after setting up a four-way race between internal candidates to succeed A.G. Lafley as CEO.

Intel (INTC) added nearly 1 percent on a report that Samsung (SSNLF) will begin making some Android phones with Intel inside.

AIG (AIG), which was kicked out of the Dow a few years back, fell 3 percent. The company's divestiture plan suffered a setback: It did not receive an expected deposit on the sale of its plane-leasing unit to a Chinese group.

Sony (SNE) fell 3 percent even though it retained two investment advisers to help review the demand of an activist shareholder to spin off its entertainment division.

Retail stocks advanced on signs that consumers are growing more confident in the economy. The University of Michigan's index of consumer sentiment rose to its highest level in nearly six years. Shares of Gap (GPS) rose 1.5 percent.

There were a number of big movers on earnings news:

Krispie Kreme Doughnuts (KKD) surged 21 percent.
Omnivision Technologies (OVTI) rallied 19 percent.
Guess? (GES) rallied 8 percent.
Lion's Gate (LGF), the studio behind the "Hunger Games" and "Twilight" hits, rose 3 percent to an all-time high.
But Palo Alto Networks (PANW) slid 12 percent.
And Pall Corp. (PLL), which makes purification equipment, fell 5 percent.

Elsewhere:

Kinder Morgan (KMI) lost ground after cancelling a $2 billion project to build an oil pipeline from Texas to California.
And Netflix (NFLX) gained nearly 2 percent after being added to the Nasdaq 100 index.

-Produced by Drew Trachtenberg

%Gallery-189589%

Permalink | Email this | Linking Blogs | Comments

Weird Week: Tesla's Green Cars Win, Trina's Green Energy Loses

Rick Aristotle Munarriz — 2013-05-31T16:05:00+00:00

Filed under: Netflix, Nokia, Green, Earnings, Market News, Transportation & Logistics

Netflix, F. Scott Schafer, NetflixThe cast of "Arrested Development."

Companies can make brilliant moves, but there are also times when things don't work out quite as planned. From the leading streaming video provider getting promoted to a popular market index to a profitless solar energy company being bid up ahead of a disappointing quarterly report, here's a rundown of the week's best and worst in the business world.

Netflix (NFLX) -- Winner

Netflix may have started out the week receiving mixed reviews for its "Arrested Development" revival, but it wrapped things up with a different form of respect.

NASDAQ announced on Thursday night that Netflix would be added the NASDAQ-100 index that tracks 100 of the most prolific stocks on the exchange. The market gauge may not be as high-profile as the Dow 30 or the S&P 500, but this is a significant win for the reinvigorated dot-com darling.

Shares of Netflix were actually booted from the NASDAQ-100 just five months ago, but the stock has gone on to become one of the market's biggest gainers in that time.

Nokia (NOK) -- Loser

As bad as things have gone for Nokia, at least it always had Finland.

Well, the Finnish company has now lost its spot as the top smartphone seller in its home country. Trend tracker IDC reported this week that South Korea's Samsung overtook Nokia during the first quarter.

Nokia is starting to bounce back on the strength of its Windows-powered Lumia phone line, but apparently even the folks in Finland can't resist that calling of Samsung with its Android-powered phones.

Tesla Motors (TSLA) -- Winner

Tesla's Model S sedans are cool, but they're certainly not cheap. However, relief may be coming for mainstream drivers hoping to bypass the gas pump with a trendy electric car. CEO Elon Musk said this week that Tesla may roll out a cheaper sedan in three to four years that will cost roughly half as much as the $70,000 Model S.

Sponsored Links

That's not the only cool thing that Tesla had shared this week. The maker of electric cars announced on Wednesday that it will be tripling the size of its Supercharger network, the charging stations that allow Model S owners to recharge their cars relatively fast, and for free.

Musk's goal is to take his family from Los Angeles to New York City in a Tesla relying entirely on Supercharger stations. That reality may now be mere months away.

Trina Solar (TSL) -- Loser

Shares of Trina Solar popped 10 percent on Tuesday, ahead of its earnings report on Wednesday morning.

Why would shares of the Chinese solar products maker move higher before earnings? The company is losing money -- a lot of money -- and it had actually posted larger deficits than Wall Street was expecting in each of the previous four quarters. What happened on Wednesday? Well, the company posted a wider than expected loss and, predictably, the stock fell 11 percent.

Investors need to respect these trends. They're not always perfect indicators, but if a company disappoints for four consecutive quarters the smart money has to be on that streak stretching to five.

Groupon (GRPN) -- Winner

Groupon is getting some more skin in the credit card processing game. The company is joining American Express (AXP) in investing in SumUp, a fast-growing European company that allows merchants to take debit and credit card payments from their smartphones.

Yes, that's become a crowded market in the U.S. It seems as if everybody has a Square knockoff these days. However, Groupon's in a unique position. It has working relationships with tens of thousands of local merchants, and its thick Rolodex can be put to good use in promoting other merchant services -- it has already moved to offer cheaper credit card processing than traditional providers.

Groupon's flagship model of providing daily deals may have run into some resistance, but it's now cashing in on its valuable merchant relationships.

Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends American Express, Netflix, and Tesla Motors. The Motley Fool owns shares of Netflix and Tesla Motors . Try any of our newsletter services free for 30 days.

Permalink | Email this | Linking Blogs | Comments

Costco Earnings Surge on Higher Sales, Fees

The Associated Press — 2013-05-30T07:50:00+00:00

Filed under: Costco, Earnings, Retail, Stocks, Investing

Kevork Djansezian/Getty Images

ISSAQUAH, Wash. -- Costco's fiscal third-quarter net income climbed 19 percent, bolstered by increased sales and more money from membership fees.

For the three months ended May 12, the wholesale club operator earned $459 million, or $1.04 a share. That's up from $386 million, or 88 cents a share, a year earlier.

Analysts, on average, had predicted earnings of $1.02 a share, according to FactSet.

Revenue for the company, based in Issaquah, Wash., rose 8 percent to $24.08 billion from $22.32 billion. Wall Street predicted $24.09 billion.

Sponsored Links

Revenue from membership fees, which account for much of Costco's profit, increased to $531 million from $475 million.

Revenue from stores open at least a year, a key gauge of a retailer's health, climbed 5 percent. This figure excludes results from stores recently opened or closed.

In the U.S., the metric increased 6 percent. It rose 4 percent overseas.

Excluding changes in gas prices and foreign exchange rates, revenue at stores open at least a year increased 7 percent. It also rose 7 percent in the U.S. and internationally.

Costco Wholesale Corp. (COST) currently runs 627 warehouses, including 449 in the U.S. and Puerto Rico, 85 in Canada, 33 in Mexico, 24 in the U.K., 15 in Japan, nine in Taiwan, nine in Korea and three in Australia.

%Gallery-187720%

Permalink | Email this | Linking Blogs | Comments

5 Things to Watch: Costco, Kors, Krispy Kreme, Retail and Streaks

Rick Aristotle Munarriz — 2013-05-28T13:50:00+00:00

Filed under: Earnings, Retail, Apparel, Wall Street Watch, Investing

Getty Images

From a maker of decadent doughnuts stepping up with its quarterly report to a surprisingly long streak of winning Tuesdays on the line, there will be plenty of news waiting to break in the coming days. Let's go over some of the items that will help shape the week that lies ahead on Wall Street.

1. Tuesday Goes for 20: One of the market's oddest winning streaks will be tested when trading begins after the Memorial Day holiday weekend. The Dow has closed higher for 19 Tuesdays in a row.

It's a lucky fluke. There really hasn't been any rhyme or reason for what is now nearly five months of higher closes for the Dow Jones Industrial Average on Tuesdays. This is the longest streak since the Dow managed 24 consecutive positive closes on Wednesdays in 1968.

It won't be a lock to get to 20. The market itself proved mortal for all of last week. After four straight weeks of higher market closes, all of the major market indices closed lower last week heading into the holiday weekend.

2. Everything Counts in Large Amounts: Costco (COST) made warehouse clubs cool.

Exposed ceilings, stacks of merchandise packed on pallets, and bulk-sized packaging didn't seem very stylish until Costco helped usher in the movement of deep savings on groceries and other wares when packaged in large quantities. Costco is so popular that it was able to push through a 10 percent membership increase two years ago -- bumping its annual basic membership to $55 -- without skipping a beat.

The warehouse club darling also didn't lose a step when longtime CEO Jim Sinegal retired at the beginning of last year. Costco has been a steady producer, and that's exactly what the market expects when the discount retailer reports quarterly results on Thursday. Analysts see revenue clocking 8.5 percent higher for the period with earnings per share climbing twice as fast.

3. Time to Make the Doughnuts: Fans of doughnuts know the drill at Krispy Kreme (KKD). Whenever they see the "Hot Doughnuts Now" neon sign glowing, they can come in to grab some of the chain's signature original glazed treats as they are being made.

Sponsored Links

Investors will be hoping for similarly sweet and tasty rewards when the company reports on Thursday. Wall Street's holding out for a profit of $0.17 a share, well ahead of the $0.14 a share that it posted a year earlier.

There's no denying that Krispy Kreme doughnuts aren't healthy. Trends are favoring healthier lifestyles. However, sweet indulgences of comfort foods may probably never go entirely away. Krispy Kreme certainly hopes that will be the case. There doesn't seem to be any plans to roll out fat-free doughnuts anytime soon.

4. Retailers on Parade: This is going to be a relatively light week on the earnings front, but there will be plenty of retailers stepping up to report their latest financials.

Unlike most companies, which end their fiscal years in December, retailers tend to close out their years in January to allow them to account for post-holiday returns within their most potent quarter.

We already went through the holiday quarter reports three months ago. Now we're dabbling into the fiscal quarters that ended in April for many retailers.

Chico's FAS (CHS), Tilly's (TLYS), DSW (DSW), and Express (EXPR) are some of the notable chains reporting this week. The bad news here is that just one of those four chains -- Chico's -- is expected to post year-over-year improvement in earnings.

5. Plotting a Course for Kors: Most people would never dream of paying as much as $3,500 for a purse, but then again most people aren't the target audience for Michael Kors (KORS).

The maker of luxury handbags and other accessories has given market leader Coach (COH) a run for its money lately. Net sales soared 70 percent at Kors in its previous quarter, proving that shoppers aren't flinching at the high prices in pursuit of the fashionable bags with the "MK" logo.

Kors reports on Wednesday, and Wall Street's betting on more heady growth. They see revenue climbing 44 percent and earnings per share shooting 77 percent higher. I guess that's more money for Kors to stuff into its handbags.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Coach and Costco Wholesale. The Motley Fool owns shares of Coach and Costco Wholesale.

Permalink | Email this | Linking Blogs | Comments

Tiffany Earnings, Sales Shine in Latest Quarter

The Associated Press — 2013-05-28T07:48:00+00:00

Filed under: Earnings, Retail, Stocks

Spencer Platt/Getty Images

NEW YORK -- Tiffany says its first-quarter net income rose 3 percent as sales improved across all regions.

The results beat Wall Street expectations, and its shares rose more than 6 percent in premarket trading. The high-end jewelry company known for its blue boxes earned $83.6 million, or 65 cents a share, for the period ended April 30. That's up from $81.5 million, or 64 cents a share, a year ago.

Excluding costs tied to staff and occupancy cuts, earnings were 70 cents a share. This easily beat the 53 cents a share analyst expected. Revenue for the New York company rose 10 percent to $895.5 million from $819.2 million, topping Wall Street's $855.7 million estimate.

Sponsored Links

Sales increased 9 percent globally to $895 million. The conversion of five Tiffany stores in the United Arab Emirates to company-run stores from independently run stores in July helped other sales triple to $27 million. Sales for the Asia-Pacific region rose 15 percent to $223 million.

In the Americas, sales climbed 6 percent to $408 million. European sales also increased 6 percent to $93 million, while sales in Japan rose 2 percent to $145 million. Tiffany & Co. (TIF) shares rose $4.89, or 6.4 percent, to $81.10 in premarket trading about two hours before the market opening.

For the second quarter, Tiffany anticipates earnings will be equal to the prior-year period's 72 cents a share. Analysts expect 79 cents a share.

But Tiffany reaffirmed its fiscal 2013 earnings forecast of $3.43 to $3.53 a share on Tuesday. Wall Street predicts $3.48 a share. Chairman and CEO Michael Kowalski said in a statement that the chain was sticking with its guidance because of ongoing soft sales in the Americas and the weaker yen.

The company had 275 stores at quarter's end.

%Gallery-179542%

Permalink | Email this | Linking Blogs | Comments

Abercrombie & Fitch Sales Crater in 1Q, Loss Narrows

Reuters — 2013-05-24T10:00:00+00:00

Filed under: Earnings, Retail, Consumer Goods, Stocks

Justin Sullivan/Getty Images

Abercrombie & Fitch reported Friday a steeper-than-expected drop in quarterly comparable sales, in part because of inventory shortages, and the teen clothing retailer's shares fell more than 11 percent.

Sales at stores open at least a year combined with online sales fell 15 percent. The decline was most pronounced at the Hollister chain, the company's largest. But Abercrombie lost business under all its banners, even in its direct-to-consumer operations, which include e-commerce.

Abercrombie & Fitch Co. (ANF) said it expected comparable sales to be slightly down for the remainder of the year.

Overall sales fell 9 percent to $838.8 million in the first quarter ended May 4, well below analyst expectations of $941.3 million, according to Thomson Reuters I/B/E/S.

Sponsored Links

The company said it had more merchandise shortages than expected during the quarter, but Chief Executive Officer Mike Jeffries said in a statement that the issue was "largely" resolved.

Abercrombie joins rivals American Eagle Outfitters Inc. (AEO) and Aeropostale Inc. (ARO) among chains that cater to young shoppers and reported poor first-quarter results this week.

Comparable sales, comprised of same-store sales and online sales, fell 18 percent at Hollister, and 13 percent at the company's namesake chain. Abercrombie got some relief from a jump in sales outside the United States.

The company said its loss narrowed to $7.2 million, or 9 cents a share, in the quarter from $21.3 million, or 25 cents a share, a year earlier. That was 4 cents worse than analysts expected.

Shares of Abercrombie were down 11.2 percent at $$48.26 in trading before the market opened.

%Gallery-187720%

Permalink | Email this | Linking Blogs | Comments

P&G Brings Back Lafley as CEO

The Associated Press — 2013-05-24T06:59:00+00:00

Filed under: Company News, Earnings, Consumer Goods, Stocks

Francis Specker/Bloomberg via Getty ImagesAlan G. Lafley speaks at a 2010 forum in Palm Springs, Calif. Procter & Gamble announced late Thursday that Lafley would be returning to his CEO post at the consumer-products giant.

By MAE ANDERSON

NEW YORK -- Household products giant Procter & Gamble is hoping its former CEO can work his magic once again.

The Cincinnati company said late Thursday that former CEO A.G. Lafley, a 33-year industry veteran, is returning its top post. The surprise move comes as the world's largest consumer-products maker tries to spur growth in the face of stiff global competition.

Lafley, 65, replaces CEO Bob McDonald, effective immediately. McDonald, who will retire June 30 after a transition period, has served as CEO since 2009.

Lafley, who led Procter & Gamble Co. (PG) from 2000 to 2009, also is taking the president and chairman titles.

The 175-year-old company's Tide detergent, Crest toothpaste and other products can be found in 98 percent of American households. But it is struggling to grow.

In his first stint at the helm, Lafley helped right an ailing P&G, emphasizing innovation and a "consumer-is-boss" focus. That included spending more time in personal observation and interviews with consumers.

He also pulled off the blockbuster $57 million acquisition of the Gillette Co. in 2005, expanding P&G's reach into male-oriented products with Gillette's shavers and razors.

"A.G.'s track record and his depth of experience at P&G make him uniquely qualified to lead the company forward at this important time," said board director Jim McNerney.

Sponsored Links

P&G is known for its premium products that cost more than competitors but are perceived by customers to be of higher quality. But growth for the company has slowed in developed markets like North America and Europe.

Like many of its rivals, P&G has been expanding into rapidly growing emerging markets such as Latin America, India and Russia. But there, it has faced tough competition from already entrenched smaller rivals such as Dutch consumer-products maker Unilever and Colgate-Palmolive.

In order to spur growth, P&G has been cutting costs and rolling out new products. The company is in the middle of a belt-tightening plan aimed at saving $10 billion by 2016. And it has introduced new products or brand expansions including Tide Pods single-use laundry pellets, Downy Unstopables, a washer sheet that adds scent to clothes, and a stronger version of Secret deodorant called Clinical Strength.

But investors have been frustrated by the company's slow revenue growth and stagnant market-share gains globally. The pressure stepped up last July, when activist investor William Ackman took a 1 percent stake. He has been vocal about the company's need to streamline operations and improve results.

"It sounds like the board needed a change at the top," said Bernstein analyst Ali Dibadj. "We thought maybe there would be a little bit more of a test runway for current management, but clearly, frustration was very high."

P&G last year acknowledged that it had made missteps in some emerging markets -- which make up nearly 40 percent of its sales -- when it expanded in some product areas too quickly. And it introduced a plan to focus on its 20 biggest new products and its 10 most-profitable emerging markets, which has led to improving market share.

The moves seemed to be working.

In P&G's most recent January-to-March quarter, net income rose 6 percent to $2.57 billion, as revenue inched up 2 percent to $20.6 billion. But that fell slightly short of analyst expectations of $20.72 billion. It had also begun to gain market share in North America. But fourth-quarter guidance was below expectations as the company spent more to market new products.

Lafley said the board approached him "very recently" after McDonald decided to retire and asked him to reclaim the top spot.

"Frankly, duty called," he said in an interview with The Associated Press. "I'm back, I'm full on."

His first order of business, he said, will be to stay on the strategic course that the company has been implementing, focusing on core developed markets as well as developing markets, introducing new products and cutting costs.

"I spent nearly 33 years at this company," he said, "and the company has got some momentum right now."

%Gallery-185205%

Permalink | Email this | Linking Blogs | Comments

Sears Posts Bigger-Than-Expected Loss, Blames the Weather

The Associated Press — 2013-05-23T17:35:00+00:00

Filed under: Earnings, Retail

Mark Duncan/APAn employee walks through the appliance department at a Sears in North Olmsted, Ohio.

NEW YORK -- Sears Holdings Corp. (SHLD) reported a steeper-than-expected loss for its first quarter with the beleaguered retailer blaming a cooler spring for falling sales.

The operator of Sears and Kmart stores also said it's considering strategic options for its service-agreement business, such as selling it off, to raise cash. Service agreements are when customers pay an extra fee when buying an appliance and the company agrees to fix or replace it if it breaks within a certain time.

The steep loss drove Sears' shares down more than 11 percent in after-hours trading. The news, which comes more than three months after hedge fund billionaire and Sears Chairman Eddie Lampert took over as CEO, sent its shares down almost 13 percent to $50.74.

For the quarter, Sears said sales at stores open at least a year fell 3.6 percent, with the company noting that much of the country experienced a cooler spring than last year. The metric is a key gauge of financial health because it strips out the effect of newly opened and closed locations.

The company, based in Hoffman Estates, Ill., has posted six straight years of declining sales at stores open at least a year. Sears' middle-income shoppers have been hit hard by the economy's woes.

Investors have also feared that the payroll tax increase that took effect in January could hurt results for retailers like Sears. Wal-Mart Stores Inc. (WMT), which reported sales and profits for the first quarter that came in under analysts' expectations, cited the tax changes as a factor in a challenging quarter.

Last year, Sears announced plans to restore profitability by aggressively cutting costs, reducing inventory, selling off some assets and spinning off others. It has also been making changes in stores, such as giving iPads and iPod Touch devices to sales staff to research products and help customers on the sales floor.

But critics have long said the company hasn't done enough to invest in its stores to compete with Walmart, Target and others.

For the quarter, Sears said it lost $279 million, or $2.63 per share. That compares with a profit of $189 million, or $1.78 per share, a year earlier. Not including one-time items, the company said it lost $1.29 per share, worse than the 60 cents per share analysts expected. Revenue fell 9 percent to $8.45 billion, above the $8.37 billion Wall Street expected.

Sears' shares fell $6.42, or 11 percent, to $51.75 in after-hours trading.

Permalink | Email this | Linking Blogs | Comments

HP's Slump Deepens as Earnings Fall 32%

The Associated Press — 2013-05-22T16:50:00+00:00

Filed under: Hewlett-Packard, Earnings, Computer Industry, Electronics

Paul Sakuma/AP

By MICHAEL LIEDTKE

SAN FRANCISCO -- Hewlett-Packard's slump is deepening as the world's largest personal computer maker scrambles to meet the growing demand for more versatile and less expensive mobile devices.

The latest evidence of Hewlett-Packard Co.'s (HPQ) continuing downfall came in a quarterly earnings report released Wednesday. The results included the seventh consecutive decline in HP's quarterly revenue compared with the same period the previous year. HP's 10 percent decrease in revenue during the three months ending in April was the largest drop so far during the slump.

Most of the erosion has occurred under the leadership of Meg Whitman, a former CEO at eBay Inc. (EBAY) and defeated California gubernatorial candidate, who was hired to run HP in September 2011.

Whitman has repeatedly warned that HP's revenue might not start growing at an acceptable rate for another year or two as she cuts costs, overhauls the company's product line and pushes into more profitable niches in business software, data analysis and storage and technology consulting. In a Wednesday statement, she reiterated that the company remains in a "multi-year journey."

"I am encouraged by our performance in the second quarter, and I feel good about the rest of the year," Whitman said.

In a sign of optimism, HP predicted its earnings for the current quarter ending in July will be a slightly better than analysts have been anticipating. Excluding certain items, the Palo Alto, Calif. company forecast earnings ranging from 84 cents to 87 cents a share. Analysts, on average, had projected 83 cents a share, according to FactSet.

Investors seemed to interpret the guidance as a sign that HP's cost-cutting measures imposed by Whitman are starting to pay off, even as the company's sales droop.

Sponsored Links

HP's stock surged $2.70, or nearly 13 percent, to $23.93 in extended trading, after the release of the results.

HP earned $1.1 billion, or 55 cents a share, during its most recently completed quarter. That was down 32 percent from $1.6 billion, or 80 cents a share, last year.

If not for certain items unrelated to its ongoing business, the Palo Alto, Calif., company said it would have earned 87 cents a share in its fiscal second quarter. That figure topped the average estimate of 81 cents a share among analysts surveyed by FactSet.

HP's revenue totaled $27.6 billion -- about $400 million below analyst projections.

The troubles plaguing the company primarily stem from a lack of innovation and misguided acquisitions at a pivotal juncture in technology.

Since the release of Apple Inc.'s (AAPL) iPhone six years ago, consumers and corporate customers have been gravitating toward smartphones and tablet computers equipped with touch-screens and voice recognition technology. As these mobile devices add more features and grow increasingly powerful, their prices are falling, too, making them even more attractive compared with laptop and desktop computers.

Like many other PC makers, HP was slow to respond to the shift and then stumbled trying to catch up with Apple and other manufacturers such as Samsung Electronics that make devices running Google Inc.'s (GOOG) Android operating system.

HP's first foray into tablet computers and smartphones designed for the Palm operating system flopped two years ago. The company is now selling tablets running on Android and a recently introduced version of Windows, but it hasn't re-entered the smartphone market yet.

Meanwhile, PCs remain more difficult to sell, as HP discovered in its latest quarter. The company's revenue in the division that sells PCs fell 20 percent in the latest quarter. Cathie Lesjak, HP's chief financial officer, described the market conditions as "very tough" in an interview.

Printers are also falling out of vogue as mobile devices make it easier to quickly look up data, and services reduce the need for information on paper. HP fared better in the latest quarter than it has in recent periods as its printer revenue fell by just 1 percent.

Whitman believes HP can bounce back by inventing new technologies and packing them into appealing products more quickly, recapturing the spirit the company established as a Silicon Valley pioneer nearly three-quarters of a century ago.

The effectiveness of Whitman's strategy is likely to be tested during the next few months as HP releases another wave of PCs that have touch-screen screens and tablets in different sizes. HP is lowering the prices on its upcoming touch-screen PCs in an effort to lure more consumers.

All the new devices are expected to be on the market in time for the back-to-school season.

Most of HP's devices are running on the latest version of Windows that Microsoft Corp. (MSFT) released seven months ago. The dramatic overhaul of the operating system, called Windows 8, is designed to be controlled both by touch and the traditional method of using a keyboard or mouse. Despite a massive marketing campaign by Microsoft, Windows 8 got off to a slow start, partly because some of its features frustrated and confused longtime users who preferred the old setup.

The backlash prompted Microsoft to fine tune the system in a series of changes that will be rolled out later this year as Windows 8.1. Microsoft still hasn't publicly provided details about what kind of revisions are being made.

%Gallery-185434%

Permalink | Email this | Linking Blogs | Comments

Target Profit Tumbles on Weak Sales

The Associated Press — 2013-05-22T08:46:00+00:00

Filed under: Company News, Earnings, Retail, Target, Stocks

Lynn Watson/Shutterstock

By ANNE D'INNOCENZIO

NEW YORK -- Target reported a 26 percent drop in first-quarter profit as cool temperatures and financial pressures limited customers' appetite for spending.

The company, based in Minneapolis, also cut its annual profit outlook, sending its stock down in premarket trading.

Target Corp. (TGT) is the latest in a string of companies including rival Walmart Stores Inc. (WMT) that underscore how weather and other pressures on lower- to middle-income shoppers hurt business in the first couple months of the year.

Still, Target, whose sales growth has been uneven since the recession, remains confident in its strategies to attract shoppers.

Target has reached out to customers with two big growth initiatives. It has been offering a larger selection of food and also a program, started in 2010, that gives shoppers a 5 percent discount when they pay with Target-branded credit and debit cards.

At the same time, Target continues to team up with new designers for limited-time partnerships. Earlier this month, Target announced its latest designer collaboration, with Phillip Lim. The collection is due out in September.

Last year, Target expanded into urban markets using smaller versions of its big-box stores in Seattle, Los Angeles and Chicago.

Target also started to expand into Canada earlier this year, its first foray outside the U.S. The company is opening the stores in waves that should add up to about 125 stores at locations once owned by Canadian retailer Zellers by the end of the year.

Sponsored Links

"Target's first-quarter earnings were below expectations as a result of softer-than-expected sales, particularly in apparel and other seasonal and weather-sensitive categories," Gregg Steinhafel, chairman, president and CEO of Target, said in a statement. "While we are disappointed in our first-quarter performance, we remain confident in our strategy, and we continue to invest in initiatives, including Canada, our digital channels, and CityTarget, that will drive Target's long-term growth."

Target said it earned $498 million, or 77 cents a share, for the three months ended May 4. That compares with $697 million, or $1.04 a share, a year earlier.

Sales rose 1 percent to $16.71 billion.

Revenue at stores open at least a year slipped 0.6 percent. That's considered an important measure of retail performance because it strips out the effect of stores that open or close during the year.

Analysts had expected earnings of 95 cents a share on revenue of $16.82 billion.

Target expects that adjusted earnings a share will be in a range between $1.09 and $1.19 for the quarter.

For the full year, the company now expects $4.70 a share to $4.90 a share. That's down from its original guidance of $4.85 a share to $5.05 a share.

Analysts had forecast $1.11 a share for the second quarter and $4.63 a share for the year.

Target's stock dropped nearly 2 percent to $69.98 in premarket trading.

%Gallery-187720%

Permalink | Email this | Linking Blogs | Comments

Lowe's Profit Hurt by Cooler Weather, Competition

Reuters — 2013-05-22T08:05:00+00:00

Filed under: Company News, Earnings, Retail, Stocks, Home & Garden

Scott Olson/Getty Images

By Dhanya Skariachan

Lowe's reported a weaker-than-expected quarterly profit on Wednesday, hurt by colder-than-usual weather at the start of the spring selling season and strong competition from larger rival Home Depot.

The results contrasted sharply with those of Home Depot and signaled that Lowe's Cos. (LOW), the world's No. 2 home improvement chain, was still struggling to narrow the performance gap with the industry leader.

Sponsored Links

Lowe's sales fell 0.5 percent to $13.09 billion in the first quarter ended on May 3, missing the analysts' average estimate of $13.45 billion. The company's shares fell 3.3 percent to $42.45 in trading before the market opened.

Sales at stores open at least a year dipped 0.7 percent. It was the 16th straight quarter that Lowe's posted weaker same-store sales than Home Depot.

"The spread between Home Depot and Lowe's [same-store sales] expanded in the first quarter, something we had worried might happen," said Janney Capital Markets analyst David Strasser.

Lowe's stocked more lawn and garden products than Home Depot Inc. (HD) and therefore suffered more from the unfavorable weather, Strasser said. At the same time, he said, Home Depot had more of a presence in California, where housing has made a strong comeback.

While Lowe's has been working to improve product selection and customer service, it has yet to turn around its business.

As part of its makeover, the company has started offering everyday low prices and products targeted to specific geographic markets. It made its stores more appealing with improved signs, television displays that stream videos on how-to-do projects, and lower racks to make items easier to reach.

Lowe's has also increased its assortment of products available online and started mylowes.com, a site that allows shoppers to save their room dimensions, create a shopping list and set reminders to buy items such as air filters and batteries for smoke alarms.

Lowe's, which was also slower than Home Depot to cut costs in the years after the housing collapse, said its first-quarter net earnings rose to $540 million, or 49 cents a share, from $527 million, or 43 cents a share, a year earlier.

Analysts on average expected a profit of 51 cents a share, according to Thomson Reuters I/B/E/S.

%Gallery-187720%

Permalink | Email this | Linking Blogs | Comments

Toll Brothers Profit Rises as Housing Market Rebounds

Reuters — 2013-05-22T07:46:00+00:00

Filed under: Company News, Earnings, Materials & Construction, Economy

Scott Olson/Getty Images

Toll Brothers posted a 46 percent rise in quarterly profit as the largest U.S. luxury homebuilder sold more homes at higher prices, indicating that the housing recovery is spreading across the industry.

Record-low interest rates and rising rents have encouraged people to buy homes. Ground-breaking to build new homes in the United States rose 7 percent in March to the highest level since June 2008.

Toll Brothers Inc. (TOL) said its quarterly orders were the highest in seven years. New orders, a key indicator for builders who don't recognize revenue until they close on a home, rose 36 percent to 1,753 homes.

The value of the orders jumped 57 percent to $1.19 billion.

"Buyers who have been on the sidelines for six years are jumping in," Chief Executive Douglas Yearley said in a statement.

Toll Brothers, which targets high earners, said its average home-sales price increased 3.6 percent in the second quarter to $577,000 compared with a year earlier.

Net income rose to $24.7 million, or 14 cents a share, from $16.9 million, or 10 cents a share, a year earlier. The profit included a pretax gain of $13.2 million.

Revenue rose 38 percent to $516 million.

Toll's shares, which have gained about 11 percent so far this year, closed at $36.01 on the New York Stock Exchange on Tuesday.

%Gallery-187664%

Permalink | Email this | Linking Blogs | Comments

Best Buy Reports 1Q Loss on Restructuring Costs

The Associated Press — 2013-05-21T08:23:00+00:00

Filed under: Earnings, Retail, Best Buy

Spencer Platt/Getty Images

MINNEAPOLIS -- Best Buy on Tuesday reported a loss in its fiscal first quarter as it sold its stake in Best Buy Europe and works on a turnaround plan that includes cutting costs and closing some stores.

Its adjusted earnings beat Wall Street expectations, but revenue fell short as the company faced tough pricing competition during the quarter. Its shares fell in premarket trading.

Best Buy Co. (BBY) has been working on a turnaround plan as it faces increased competition from online retailers and discount stores. The plan includes closing stores, cutting costs and investing in training for its employees. In April it also said it would sell its 50 percent stake in its European joint venture to streamline its business and strengthen its balance sheet.

The electronics retailer says net loss for the three months ended May 4 after paying preferred dividends totaled $81 million, or 24 cents a share. That compares with net income of $158 million, or 46 cents a share, last year.

Excluding restructuring costs and costs related to selling its stake in Best Buy Europe, it earned 36 cents a share. That beat the 24 cents a share that analysts expected, according to FactSet.

Sponsored Links

Revenue fell nearly 10 percent to $9.38 billion, short of expectations of $10.67 billion. Revenue in stores open at least one year fell 1.1 percent. The measure is a key gauge of a retailer's expectations because it excludes stores that open or close during the year.

CEO Hubert Joly said results were hurt by the shift of Super Bowl, which typically drives TV sales, into the prior quarter, and the decision to reduce sales in some non-core businesses.

CFO Sharon McCollam said the company expects the price competitiveness that hurt a share results in the first quarter will continue into the second. She added that adding Samsung store-within-stores and restructuring retail floor space at some stores are expected to hurt some stores as well.

The investments in its turnaround plan, however are expected to be "substantially offset" by the company's cost cutting initiatives.

Best Buy shares fell 48 cents, or 1.8 percent, to $26.33 in premarket trading about 75 minutes ahead of the market opening.

%Gallery-154260%

Permalink | Email this | Linking Blogs | Comments

Housing Recovery Boosts Home Depot's 1Q Profit

The Associated Press — 2013-05-21T07:52:00+00:00

Filed under: Earnings, Housing Market, Stocks, Economy

Elise Amendola/AP

ATLANTA -- Even though the weather was poor, Home Depot posted an 18 percent increase in its net income for the first quarter thanks to the ongoing housing recovery.

Its quarterly results topped Wall Street's view and the world's biggest home improvement chain boosted its full-year earnings and revenue forecasts Tuesday.

Shares climbed 4 percent in premarket trading.

For the three months ended May 5, Home Depot Inc. (HD) earned $1.23 billion, or 83 cents a share. That's up from $1.04 billion, or 68 cents a share, a year earlier. Analysts predicted earnings of 76 cents a share, according to a FactSet survey.

Sponsored Links

"In the first quarter, we saw less favorable weather compared to last year, but we continue to see benefit from a recovering housing market that drove a stronger-than-expected start to the year for our business," Chairman and CEO Frank Blake said in a statement.

Revenue for the Atlanta company rose 7 percent to $19.12 billion from $17.81 billion. Wall Street expected $18.62 billion.

Home Depot's stock gained $3.24, or 4.2 percent, to $80 about three hours before the market open.

Revenue at stores open at least a year, a key gauge of a retailer's health, climbed 4.3 percent. This figure excludes results from stores recently opened or closed.

The chain anticipates fiscal 2013 earnings of $3.52 a share, with revenue up about 2.8 percent. Its prior guidance was for earnings of $3.37 a share, with revenue rising about 2 percent. The revised outlook implies revenue of $76.83 billion, based on 2012's $74.75 billion.

Analysts expect full-year earnings of $3.54 a share on revenue of $76.98 billion.

Home Depot had 2,257 stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico at the first quarter's end.

Permalink | Email this | Linking Blogs | Comments

Home Depot and Lowe's Report in Sandy's Continuing Wake

DailyFinance Staff — 2013-05-20T12:50:00+00:00

Filed under: Earnings, Market News, Home & Garden

Home Depot and Lowe's continue to service, and benefit from, the victims of Hurricane Sandy.

It's been nearly seven months since the storm ravaged many communities along the east coast, and the reconstruction effort continues.

Getty Images

That's expected to help both of the leading home improvement retailers post strong profits when they report quarterly results this week. Home Depot (HD) results are due out tomorrow morning and Lowe's (LOW) reports on Wednesday.

Home Depot opened a smaller store in the hard hit town of Seaside Heights, New Jersey this year. It's been set up to take orders from contractors involved in the rebuilding. There's also a design center for local residents.

The pick-up in orders from contractors isn't just along the path of Hurricane Sandy. The surge in home sales this year has jump-started that side of the business for both Home Depot and Lowe's.

Contractors usually account for more than a quarter of Home Depot's sales.

The resurgent housing market is also prompting new homeowners to spend heavily on landscaping, decorating and do-it-yourself projects. That could help offset the impact of a particularly cool spring that may have limited the sales of gardening and other seasonal items.

According to Briefing.com, Home Depot is expected to post earnings of 76¢ a share, up from 65¢ a year ago.

Lowe's is seen earning 51¢, up from 44¢ a year ago.

Revenue gains for both retailers are expected to be in the two to six percent range.

In general, Home Depot has been outperforming smaller rival Lowe's -- partly, analysts say, because it operated more efficiently. In its previous earnings report back in February, Home Depot posted a 32 percent profit jump and, unlike other retailers, said its customers did not seem to be holding back because of the payroll-tax hike.

But Lowe's has held its own on Wall Street. Its shares have jumped 33 percent so far this year. Over that same time, Home Depot is up 24 percent.

-Produced by Drew Trachtenberg

%Gallery-170201%

Permalink | Email this | Linking Blogs | Comments