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Apparel Stocks Lag Dow in May

Apparel retail stocks fell by an average of 1.4% in May, underperforming the Dow Jones Industrial Average, which gained 1 percent in the month, closing at 18,010.

Ann Inc. (ANN) gained 23.5% to $46.75 after it was reported that the women’s specialty retailer and owner of the Ann Taylor and LOFT brands would be acquired by Ascena Retail, owner of  Dress Barn, Lane Bryant, Justice and other mall-based and e-commerce specialty apparel brands. Several law firms have launched investigations on behalf of shareholders into the fairness of the proposed sale of the company. Six investment banks, including Jeffries, Piper Jaffray, TBC and Janney, downgraded the company’s stock on the basis of first quarter financial results.

Skechers (SKX) gained 17.7% to $105.87, making it the second biggest gainer for the second month in a row.  The casual footwear maker has been gaining momentum since announcing stellar first-quarter results on April 22. According to Big Data supplier NPD, the brand has overtaken Adidas to occupy the distant number two spot in the U.S. sports footwear market, with 5 percent share, after Nike, whose Nike and Jordan brands command a combined 62 percent share.

Crocs (CROX) gained 13.9% to $15.04. The company posted first-quarter sales of $262.2 million, slightly missing analyst expectations, but delivered a better-than-expected first-quarter loss of $2.4 million, or $0.08 per share. The footwear company, which has expanded its offerings beyond its original rubber clogs, is in the midst of a turnaround that attempts to burnish its brand and return the company to profitability and growth. The stock has gained 20 percent so far this year.

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Delta Apparel (DLA) gained 12.9% to $13.85 after the Greenville, South Carolina-based apparel manufacturer and maker of Soffe, Junkfood, Salt Life and Art Gun apparel posted better-than-expected financial results for its second fiscal quarter. Net income was $3.6 million, or $0.46 per share. Adjusted for non-recurring gains, the company lost $0.17 per share, Revenue in the period was $115 million, less than 1 percent ahead of last year.

Tilly’s (TLYS) plunged by 27.7% to $9.64 after the surf-inspired teen retailer posted first-quarter net income of $1.3 million, or $0.05 per share, beating analyst consensus estimates of $0.04 per share. Revenue of $120.2 million fell short of forecasts of $121.2 million.

Michael Kors (KORS), dropped by 24.8% to $46.50 after the company reported its first same-store sales decline since going public in late 2011, worrying investors that the company might have overexpanded, making its products ubiquitous and less desirable. The stock is off by more than 38 percent year-to-date.

Kate Spade (KATE) lost 24.2% to $24.78 despite the fact that the company reported a better-than-expected 14 percent increase in first-quarter sales, to $255.3 million. The handbag and accessories maker posted a net loss of $55.2 million, or $0.43 per share, compared to a profit of $46.2 million, o $0.37 per share, in the prior-year period. Excluding a loss related to discontinued businesses such as Kate Spade Saturday and Jack Spade, earnings were $0.03 per share, beating Wall Street estimates of $0.02. However, grows margin declined by 60 basis points to 60.6% of sales.