Coach and Primark´s gains lift marketsTuesday, 24 April 2012
US stocks advanced Tuesday amid better-than-estimated
earnings at companies led by Coach Inc. The S&P 500 increased 0.4 percent to 1,372. However, “Stocks have room to move higher,” said David Kelly, chief market strategist at JPMorgan Funds in New York.
“Earnings are healthy. The bar has been lowered so far that you can just walk over it. Housing is on the mend. A sign of a market top is when people are exuberant. There’s no exuberance as witnessed yesterday.”
In the spotlight, Coach, Inc. (COH), which shares slumped 3.1% or $2.38 to $72.74 after the high-end leather bags marketer reported third quarter sales grew 11% to $1.11 billion from $951 million in the prior year. Net income in the quarter soared 21% to $225 million or 77 cents per share compared to $186 million or 62 cents per share in the year ago. Sales in China soared 60% and direct-to-consumer sales increased 18% to $984 million.
In London Stock Exchange, AB Foods saw group revenue up 11% to £5.76bn. The food and retail conglomerate said it expected "substantial" profit growth for the full year as Primark and its sugar business continued to perform well, reported ‘The Telegraph’. Revenue at Primark during the first six months jumped 15% to £1.6bn, helped by further store openings. Sales in the UK edged up 1% on a like-for-like basis as Primark's fashion ranges continued to gain traction with shoppers on a budget, while sales abroad were 2% higher.
Also Next was big news on Tuesday, yet for different reasons as it faces a tougher road ahead, according to JP Morgan: “We believe Next is likely to experience increasing pressure both on top line and margin in the next few years as online competition grows and the apparel market shifts increasingly to a free delivery model.”