10:07 ET Retail Sales Mixed This Week
In the retail sector bullet point above, a number of retailers are moving on June same-store-sales reports.
Abercrombie (ANF +7.6%) reports June same store sales +9.0%, Hot Topic (HOTT +7.5%) reports June Same Store Sales decreased -2.1%, the TJX Companies (TJX -4.0%) reports June comps +3.0%, JC Penney (JCP +6.0%) reports Jun same store sales +4.5%, Wet Seal (WTSLA -2.5%) reports June comps -3.6%, Gap (GPS -6.8%) reports Jun same store sales 0.00%, The Buckle (BKE -9.3%) reports Jun same store sales -7.3%.
Additionally, TJX raised its second quarter earnings guidance to $0.70 to $0.73 per share, in-line with the $0.72 Thomson Reuters consensus, up from $0.67 to $0.72 previously. TJX also raised fiscal year 2011 earnings guidance to $3.24 to $3.33 per share, below the $3.35 Thomson Reuters consensus, up from $3.21 to $3.32 previously.
WTSLA now says its sees second quarter earnings per share at low end of previous range of $0.02 to $0.04, in-line with the $0.03 Thomson Reuters consensus.
TSCO Raises FY10 EPS Well Above Consensus
After the close yesterday, Tractor Supply (TSCO 66.57 +2.81) raised its fiscal year 2010 earnings to $4.00 to $4.10 per share, well above the $3.72 consensus, up from $3.48 to $3.60 per share. The company also raised its 2010 revenue to $3.49 billion to $3.53 billion, in-line with the $3.52 billion consensus, up from $3.44 billion to $3.50 billion.
For its second quarter, the company expects to see earnings in the range of $2.03 to $2.05 per share, well above the $1.71 consensus. On the top line, it expects revenues of $1.07 billion versus the $1.05 billion consensus.
The company said, "We had expected favorable moisture levels and were able to take advantage of this with strategic inventory allocation and effective markdown management. As a result, we achieved strong same-store sales, higher gross margin, expense leverage and better-than-expected earnings... Although we remain cautious about economic conditions, we expect that the momentum from our sales and margin initiatives will continue to benefit us."
DWRI Guides Q2 Revs Well Below Consensus
DragonWave (DRWI 4.57 -1.04) reported first quarter earnings of CDN$0.26 per share after the close yesterday, CDN$0.03 better than the Thomson Reuters consensus of CDN$0.23.
Revenues rose 274.6% year-over-year to CDN$48.7 million, worse than the CDN$51.5 million consensus.
For its second quarter, the company said it expects to see revenues of approx. CDN$25 million, well below the CDN$48.37 million Thomson Reuters consensus.
FBP Announces Agreement With the U.S. Treasury
First Bancorp (FBP 0.42) announced that it has signed an agreement with the United States Department of the Treasury pursuant to which it will issue a new series of preferred stock in exchange for the preferred stock the U.S. Treasury currently holds.
The company said, upon satisfaction of certain closing conditions, the co will issue Series G, Fixed Rate Cumulative Mandatorily Convertible Preferred Stock to the U.S. Treasury in exchange for the $400 million of its Series F, Fixed Rate Cumulative Perpetual Preferred Stock that the co issued to the U.S. Treasury in January 2009 pursuant to the TARP Capital Purchase Program, plus approximately $23.3 million in accrued dividends.
The terms of the new Series G Preferred Stock will be similar to those of the Series F Preferred Stock for which it will be exchanged, except that the Series G Preferred Stock will be convertible into common stock.
The company expects to issue the shares of Series G Preferred Stock to the U.S. Treasury within the next 30 days.
Jobless Numbers Report More of the Same
The initial claims level declined from 475,000 for the week ending June 26 to 454,000 for the week ending July 3. The Briefing.com consensus estimate was 460,000.
While we continue to hope that the latest move is a sign of a continued downward trend, we are still very skeptical as the data point to more or less the same type of movement that we have seen since the middle of November 2009.
The four-week moving average has stayed between 460,000 and 470,000 since the end of May as one week's downward move is quickly reversed during the following week. We anticipate that this will continue over the next several weeks.
At 4.413 million, continuing claims dropped to its lowest level since November 2008 and handily beat the consensus estimate of 4.600 million.
However, the move does not point to payroll gains and instead is most likely due to an increased expiration rate.
More importantly, the emergency benefit level has been in a free fall over the past several weeks as the level dropped 367,948 for the week ending June 19, which is in-line with last week's announcement that 3.3 million emergency benefits are scheduled to expire by the end of July.
Unless Congress can agree to extend the emergency benefits payouts, we could see a significant decline in income in both June and July. Since jobless benefits have been a major source of income stability over the past several months, the lost benefits will have adverse effects on our consumption forecasts.
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