Teen retailers slide and thoughts on expected July numbers
Hot Topic anounced July same store comp sales decrease of 7.2%, issued a warning about it’s second quarter results, and investors freaked out on teen retailers. From the Associated Press:
Hot Topic’s stock led the decline, falling $2.38, or 16 percent, to $12.32 on the Nasdaq. Over the past year, its shares have traded in a band of $10.78 to $17.25.
Fellow mall-based retailer Aeropostale Inc. shed $2.04, or 7.4 percent, to $25.67, and Abercrombie & Fitch Co. lost 84 cents to $52.12 on the New York Stock Exchange.
On the Nasdaq, American Eagle Outfitters Inc. fell $1.19, or 3.6 percent, to $31.67, while Pacific Sunwear, operator of PacSun and other surf-inspired clothing chains, shed 25 cents to $16.43. Meanwhile, Gap Inc. declined 34 cents, or 2 percent, to $17.01 on the NYSE.
More at Sector Snap: Teen Retailers Slide.
Everyone else will be releasing July’s numbers this week, with second quarter results to be posted around August 15 for most retailers. Although stocks fell today, if their merchandise mix is being received as well as it appears, I’d expect American Eagle Outfitters to post solid July numbers. A good merchandise assortment as well as a great advertising campaign (see: American Eagle: Try On Jeans, See A Free Movie over at Lightheavyweight) is driving foot traffic.
On the other side of the coin, I’d be cautious about Abercrombie’s numbers for July. Realize that they posted a 22% comp in July of 2005 after a 38% comp in June of 2005. Almost anything they do will look flat this month, but look for the real gains to be in their second quarter results as they should show greater bottom line performance through less markdowns and fewer sales at discount.
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