By Andria Cheng
Retail shares zigzagged Tuesday amid different readings on
whether retailers' April same-store sales may show further signs of
improvement and signal whether the worst may finally be behind
them.
Most retailers report their sales results Thursday. Sales are
expected to rise at least 1%, according to an estimate from the
International Council of Shopping Centers. Pent-up demand, warmer
weather and improved consumer confidence should help lead April
sales to be the best monthly performance so far this year, some
analysts said, adding companies may even raise their first-quarter
profit forecasts.
Sounding a positive tone, Federal Reserve Chairman Ben Bernanke
said Tuesday the U.S. economy is bottoming out and is likely to
turn upward later this year. The U.S. central bank has slashed its
interest rate target to effectively zero.
Meanwhile, other analysts said any possible sales improvement in
April was still driven by steep promotions that would cut into
profit. They said consumers remained weak.
The S&P Retail Index (RLX) zigzagged in early trading and
most recently rose 0.4% to 342.54.
Liz Claiborne Inc. (LIZ) shares rose 0.3% to $6.32. The clothing
company named Thomas Johannes Grote, former president of Esprit, as
chief of its Mexx unit worldwide. Grote will join the company Oct.
1 and report directly to Chief Executive William McComb. Tom
Fitzgerald, interim head at Mexx, will head the Lucky Brand Jeans
unit.
Wal-Mart Stores Inc. (WMT) said its Michigan Wal-Mart will start
a pilot program to offer a 90-day supply of 300 generic drugs, each
for $10, via free mail delivery.
Among the decliners, Sears Holdings Corp. (SHLD) shares fell
1.9%. Kohl's Corp. (KSS) led the gainers with a 3.7% increase.
In other industry-related news, Avon Products Inc. (AVP) shares
fell 4.8% to $24. The world's largest direct seller of beauty
products said that its first-quarter profit plunged 36% to $117.3
million, or 27 cents a share, from $184.7 million, or 43 cents, a
year earlier. Revenue dropped 13% to $2.18 billion but would have
risen 3% excluding the impact of currency translations. Analysts,
on average, expected the company to earn 33 cents a share on
revenue of $2.1 billion.
CVS Caremark Corp. (CVS) shares rose 3% to $32.99. The drugstore
chain said Tuesday that its first-quarter profit declined to $738.4
million, or 50 cents a share, from $745 million, or 51 cents, a
year earlier. Revenue rose to $23.4 billion from $21.3 billion.
Excluding $107.5 million of intangible asset amortization, the
company said it would have earned 55 cents a share. Analysts, on
average, estimated the company to earn 53 cents a share, according
to FactSet.
-By Andria Cheng; 415-439-6400; AskNewswires@dowjones.com
