G-III jumps into the cotton´s losses wagonWednesday, 08 June 2011
Shares of G-III Apparel Group fell Tuesday after the
clothing maker reported a first-quarter loss, while analysts expected a profit. Weak prospects for other retailer such as Talbots or Aeropostale also contributed to weaken international fashion companies’ trading and rise the alarm on cotton´s prices.
US media broadly reported how G-III Apparel reported after the markets closed Monday that it lost money in its fiscal first quarter as rising expenses hurt its results. Its revenue rose slightly more than expected.
The company — which holds licenses to make products under such brands as Calvin Klein, Sean John and Kenneth Cole — is facing steeply higher cotton costs and gas and labor costs. This situation backs analysts ‘comments. This was the second quarter in a row when its gross margins fell below expectations, Stifel Nicolaus analyst Jim Duffy said Tuesday morning. The company also faces rising costs and slowing sales growth rates. Duffy downgraded his opinion on the company to "Hold" from "Buy."
Consequently and once back to the trading floor, G-III shares fell $6.19, or 16.1 percent, to $32.28 by early afternoon Tuesday. During the past 52 weeks, they have traded between $20.99 and $45.38.
Still in the US, Talbots dropped an alarming 38% on more than 11 times normal stock volume. Shares were trading below $2.80 midday. The affordable clothing retailer recently reported first quarter adjusted operating income of about $8 million, down from $32 million during the same period in 2010.
Finally, in Australia retail sales are expected to grow by just 1.3% for the year to June 30, the worst annual result in two decades, but Deloitte Access Economics says there is light at the end of the tunnel. The international firm´s retail forecasts for May show Deloitte Access Economics expects jobs growth, wage gains and a levelling out of household savings to drive retail growth in the years ahead. It tips sales growth to increase by 2.2% in the 2012 fiscal year, and 3.3% the year after. "We think retail sales will pick up," Deloitte Access Economics partner David Rumbens told SmartCompany on Tuesday.