[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / September 20, 2016 / Active Wall St. announces its coverage of top earnings surprises within the Specialty Retail space. As per data available through FactSet, for Q2 2016, the blended earnings for S&P 500 have declined 3.2%. Q2 2016 marks the first time the benchmark index has recorded five consecutive quarters of y-o-y declines in earnings since Q3 2008 through Q3 2009. We take a brief look over earnings in the Consumer Discretionary sector, drilling down precisely to specialty retail. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
Today, AWS is promoting its earnings surprise review coverage on The Children's Place, Inc. (NASDAQ: PLCE), Guess' Inc. (NYSE: GES), Francesca's Holdings Corp. (NASDAQ: FRAN) and Party City Holdco Inc. (NYSE: PRTY). Get all of our free blog coverage and more by clicking on the link below:
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Consumer Discretionary
The consumer discretionary sector covers companies that sell non-essential goods and services. It includes the following industries: automotive; textiles, apparel and luxury goods; hotels, restaurants and leisure facilities; household durables; leisure equipment and products; media production and services, and consumer retailing and services. For Q2 2016, the consumer discretionary sector was the top performer, reporting earnings growth of 11.6%, the highest earnings growth among the 10 sectors in the S&P 500. Out of the 12 industries under the consumer discretionary sector, eight industries reported positive earnings growth.
The macroeconomic environment is presenting a mix picture, although wages has started to increase with average hourly earnings rising 2.4% over the past 12 months, according to the Bureau of Labour Statistics. Caution still persists among consumers due to the upcoming elections. However, the Federal Reserve has noted that revolving debt, which includes credit cards, has started to rise and bank loans have increased. Additionally, there have also been reports of improvement in online sales.
The Feds continue to be quite accommodative, which could help support consumers. The US unemployment rate is low and initial jobless claims continue to indicate further growth in employment. However, consumers seem to be somewhat reticent to spend on traditional retail items and underemployment or the mismatch between job seekers' skills and jobs available is still a cause for worry. Furthermore, the expansion of online shopping has eaten into traditional retailers' share, also hampering their margins.
Specialty Retail Improve
At the end of Q1 2016, things were looking bleak for the retail sector and there were concerns that it might be one of the worst performers of 2016. However, a range of positive Q2 reports and impressive corporate strategies have helped the sector recover. Notwithstanding a listless start to the year, retail stocks have, for the most part, come back firmly riding on a strong earnings season. While some companies failed to keep up, a number of specialty retailers posted encouraging results by cashing in on the latest shopping trends. This earnings season also proved that companies, which were attuned to customers, remained on top of trends and improved their portfolio; and they also were able to outperform expectations.
Here are the top earnings surprises for the specialty retail space:
The Children's Place, Inc.
Earnings Surprise:
On August 17th, 2016, The Children's Place, Inc., the largest pure-play children's specialty apparel retailer in North America, announced financial results for Q2 2016. The company reported a 1.4% increase in net sales to $371.4 million in Q2 2016. On a constant currency basis, net sales were $373.1 million, a 1.8% increase, compared to net sales of $366.5 million in Q2 2015. Net sales also came in above Wall Street's estimates of $368.6 million. Comparable retail sales increased 2.4% in 2016. The Children's Place reported net loss of ($2.0) million, or ($0.11) per diluted share, in Q2 2016 compared to a net loss of ($13.7) million, or ($0.67) per diluted share, the previous year. Adjusted net loss was ($0.2) million, or ($0.01) per diluted share, topping analysts' estimates for a loss of $0.23 per share. On a constant currency basis, adjusted net income per diluted share was $0.01.
Stock Performance:
Children's Place share price finished yesterday's trading session at $83.64, climbing 1.09% on a total volume of 244.66 thousand shares. The stock has advanced 11.24% and 4.59% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the company has surged 52.70%. The stock is trading at a PE ratio of 21.11 and has a dividend yield of 0.96%.
Guess' Inc.
Earnings Surprise:
Guess' Inc. reported its second quarter fiscal 2017 results on August 25th, 2016. The apparel and accessories retailer posted Q2 FY17 net income of $32.3 million, or $0.38 per share, up from $18.3 million, or $0.21 per share, for the same period last year. On an adjusted basis, the Los Angeles-based company reported earnings of $0.14 per share, exceeding Wall Street's expectations for earnings of $0.6 per share. The clothing company posted revenue of $545 million during the period, which was below market forecast of $554.5 million. Same-store sales for the Americas retail segment, including e-commerce, declined 2%, compared with analysts' expectation of a 4.3% decline.
Stock Performance:
Guess' stock is trading slightly up 0.20%, closing Monday's session at $14.98 on volume of 896.2 thousand shares. The company's shares are trading a PE ratio of 18.82 and have a dividend yield of 6.01%. At the close of yesterday's markets, shares of the company had a market cap of $1.29 billion.
Francesca's Holdings Corp.
Earnings Surprise:
On September 07th, 2016, Francesca's Holdings posted Q2 2016 earnings of $10.6 million. On a per-share basis, the Houston-based company reported earnings of $0.27 per share compared with a year-earlier profit of $9.3 million, or $0.22 per share. The company had previously projected earnings of $0.16 to $0.19 per share for the quarter on sales of $106 million to $110 million. The results came in above analysts' expectations for earnings of $0.18 per share. The boutique retailer's sales rose 9% to $115.3 million for Q2 2016, helped by a net gain of 44 stores since the year-earlier quarter; also surpassing the Street's forecasts of $108.7 million. Results were also buoyed by a 37% increase in online sales, attributed to higher website traffic and conversion rate.
Stock Performance:
On Monday, September 19, 2016, Francesca's Holdings shares was marginally down 0.78%, finishing the day at $15.32 with volume of 1.47 million shares exchanging hands by the close of the trading session. For the last three months and the previous twelve months, the stock has advanced 41.07% and 27.67%, respectively. Shares of the company have a PE ratio of 15.84.
Party City Holdco Inc.
Earnings Surprise:
On August 4th, 2016, Party City Holdco Inc. reported Q2 2016 net income of $22.5 million, after posting a loss in the same period a year earlier. On a per-share basis, the Elmsford-based company said its earnings swung to $0.19 per share from a loss of $0.20 per share a year ago. On an adjusted basis, the company's earnings were $0.24 per share, which were above analysts' projection of earnings of $0.19 per share. The party supplies retailer and wholesaler posted revenue of $519.4 million during the period, up 5% on y-o-y basis. Its e-commerce sales rose by 16% from a 4.5% growth in the first quarter.
Stock Performance:
Party City Holdco's stock is trading flat for the day, closing Monday's session at $16.03 on volume of 441.43 thousand shares. The company's shares gained 24.17% since the beginning of the year. Additionally, the stock has advanced 21.99% in the last three months. The company's shares are trading at a PE ratio of 31.31.
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SOURCE: Active Wall Street