Shares in Belk soared last month on hopes that the company might be up for sale, while Skechers jumped on better-than-expected market share gains and Iconix tanked on fears of accounting irregularities.
Apparel retail stocks fell by an average of 1.2% in April, lagging the Dow Jones Industrial Average, which edged up by 0.4 percent in the month.
Belk (BLKIB) surged by 48.3% to $73 after it was reported that the company was exploring a possible sale. Reliable sources told Reuters that the family-owned and operated department store chain has hired Goldman Sachs to help it evaluate strategic alternatives. The Charlotte, North Carolina-based company operates 297 stores throughout the southern U.S. Sales in its most recent fiscal year were $4.1 billion. Earnings before interest, taxes and depreciation expense in the current year are expected to total $400 million. The stock is up 53.6% so far this year.
Skechers (SKX) gained 25 percent to $89.92 after reporting first quarter results that surpassed Wall Street expectations. Net income of $56.1 million, or $1.10 per share, beat estimates of $1.01 per share. Sales of $768 million in the period surpassed analyst consensus of $707 million. The company said it was extremely pleased by growth in key markets in the U.S. and around the world, where it is starting to be recognized as a major player in the fashion and athletic footwear segments. Results would have been even higher had currency fluctuations and the unseasonably cold winter not created headwinds. The brand’s efforts to woo teens has proven successful, as evidenced by the online video campaign on YouTube featuring Demi Lovato that has amassed 4.4 million views to-date.
Amazon (AMZN) gained 13.4% to $421.78 after reporting that first quarter earnings, though showing a loss, beat Wall Street expectations. Revenue increased 15 percent to $22.72 billion, with a net loss of $57 million, or $0.12 per share. AWS, the firm’s cloud computing unit, turned an operating profit in the quarter. Sales at the division jumped 49 percent to $1.57 billion, with operating income of $265 million. Amazon’s core North American retail market saw sales rise 24 percent to $13.4 billion in the quarter, with operating profit of $517 million. International revenues fell by 2 percent, hurt by currency fluctuations.
Cherokee (CHKE) jumped 11.4% to $21.70 after the brand management company reported fiscal fourth-quarter earnings that surpassed analyst expectations. The company earned $1.7 million, or $0.19 per share, compared to the $0.17 per share Wall Street expected. Revenue in the period was $7.5 million, above the $7.4 million analysts expected. Full-year revenue was $35 million, and net income $9.8 million, or $1.15 per share. The company announced that following the withdrawal of Target from Canada, it would continue to sell its Liz Lange maternity and sportswear brand in the country through a licensing agreement with Sears Canada. The Liz Lange brand is exclusively sold in the U.S. at Target.
Iconix Brand Group (ICON), dropped by 21.9% in April to $26.31 after the company reported first-quarter earnings of $62.8 million, or $1.21 per share ($0.54 per share, adjusted for non-recurring gains), falling short of Wall Street estimates of $0.69 per share. Revenue for the brand licensing company whose properties include Peanuts, Candie’s, Joe Boxer, Danskin, Lee Cooper and many others, fell 15 percent to $95.4 million in the period, and now expects full-year earnings in the range of $3 to $3.15 per share, on sales of between $490 million and $510 million. COO Seth Horowitz abruptly departed the company, marking the second C-level executive to leave in a month. CFO Jeff Lupinacci resigned in late March. Several law firms have announced they are investigating allegations of irregular accounting practices regarding the booking of joint venture revenues and profits that resulted in alleged overstatement of growth.
Zumiez (VNCE) lost 21.2% to $31.71 after the skate-inspired action sports apparel retailer reported comparable store sales growth of 5.5% in March that failed to meet investor expectations. Analysts on average were expecting 6.4%. Total sales in March increased by 11 percent to $70.7 million from the prior year period.