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Mid-Tier Players Top List of Best-Performing Industry Stocks in February

Apparel retail stocks rose by an average of 4.6% in February, under-performing the Dow Jones Industrial Average, which rose by 5.6%.

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

Columbia Sportswear (COLM) skyrocketed 31.5% to $55.89 after releasing impressive fourth-quarter and full fiscal year 2014 financial results. Net sales increased 27 percent to a record $677 million, reflecting strong performance in North America for the Columbia, Sorel and prAna brands, and a 10 percent sales growth in Europe for the Columbia brand. Net income rose by 51 percent to $55.6 million, or $0.79 per share. The company’s board of directors approved an additional $200 million share repurchase and a regular quarterly dividend of $0.15 per share payable on March 19 to shareholders of record on March 5, 2015. For the fiscal year, sales increased 25 percent to $2.1 billion.

Kohl’s (KSS) gained 23.6% to $73.80 after the mid-tier department store retailer released fourth-quarter and full fiscal year 2014 sales and earnings that exceeded Wall Street expectations. Kohl’s announced that for the three months ended Jan. 31, sales increased by 3.9% to $6.34 billion, slightly beating analyst estimates of $6.32 billion. Net income was $369 million, up 10 percent from $334 last year. Earnings per share rose 17 percent to $1.83 from $1.56 in the prior year period, beating consensus estimates of $1.80. For the full fiscal year, sales were flat at $19 billion, driven by flat comps (an improvement over the 1.2% same-store sales decline suffered in fiscal 2013). Net income for the year was $867 million, down 2 percent from $889 million in the prior year. On a per-share basis, earnings were $4.24, up 5 percent from $4.05 in 2013 due to stock buybacks. Telsey Advisory Group upgraded the company’s stock from “market perform” to “outperform.”

Stein Mart (SMRT) gained 19.5% to $16.44 after its board of directors declared a special dividend of $5.00 per common share, payable on Feb. 27 to shareholders of record as of Feb. 13, 2015. The 270-store value department store chain reported a total sales increase in the fourth quarter of 7.3%, with comps up by 5.6%. Year-to-date sales rose 4.3% and 3.3% on a total and same-store sales basis, respectively. Geographically, the Midwest, Southeast and Gulf States had the strongest sales in January, while the West, Northeast and Florida had comparable store sales increases, but performed lower than the chain. The company reported that for the fourth quarter, womenswear and home had the strongest sales, while accessories and men’s underperformed.

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Sears Holdings (SHLD) jumped 18.1% to $37.60 despite news that the retailer controlled by hedge fund manager Edward Lampert posted a $159 million fourth-quarter loss as store closings and asset sales shrank the company and reduced revenue. Although the results represented the fourth straight year of sales declines and eleventh consecutive quarterly loss, the loss narrowed compared to last year, and earnings beat Wall Street expectations. The net loss was $1.50 a share, compared with a loss of $358 million, or $3.37, a year earlier. Sales fell 24 percent to $8.1 billion. The company closed 234 stores last year and separated the Lands’ End unit to generate cash. The company’s cash balance as of Jan. 31 slid 76 percent from a year earlier to $250 million.

Coach (COH) jumped 17.1% to $37.60 on news that the luxury accessories firm’s board of directors declared a quarterly cash dividend of $0.3375 per common share payable on March 30, 2015 to shareholders of record as of March 6. Oppenheimer upgraded the company’s stock from “perform” to “outperform.”

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

Ralph Lauren Corporation (RL) dropped by 17.7% to $137.41 after fiscal third-quarter results missed Wall Street expectations. Revenue in the period was $2.03 billion, compared to an expected $2.11 billion. Net income was $215 million, or $2.41 per share, short of analyst expectations of $2.52 per share.

HSN (HSNI) lost 12.7% to $67.57 after the home shopping network issued a special dividend of $10 per share payable on Feb. 19 to shareholders of record as of Feb. 9. The company’s board also approved the repurchase of 4 million shares of the  company’s common stock. In addition, HSN Inc. announced that it entered a new $1.25 billion five-year credit facility that will fund the special dividend to replace an existing $600 million credit facility. In the fourth quarter, the retailer posted revenue of $1.12 billion, beating Street forecasts of $1.06 billion, and earnings of $68.3 million, or $1.28 per share (or $1.22, adjusted for non-recurring gains), exceeded analyst expectations of $1.19 per share.