‘Down Under’ stocks shake marketsThursday, 20 September 2012
Kathmandu and Billabong stocks got the industry talking on Thursday, after posting weaker
than expected figures the first and losing its second bidder the latter. Moss Bros and American Eagle Outfitters also saw important movement.
British retailer Moss Bros saw like-for-like sales rise 5.7 per cent in its first half as pre-tax profit remained at 2.2 million pounds, “reflecting another period of progress for the Company,” as CEO Brian Brick pointed out. Profit before taxes (EBITDA) increased to 4.3 million pounds while like-for-like retail sales rose 6.5 per cent in the six months to July 28th 2012.
Zacks meanwhile retains its long term 'Outperform' recommendation on American Eagle Outfitters Inc. (AEO) “as the company continues to demonstrate solid top-line performance coupled with lower input and operating costs. We also remain impressed by the company's excellent financial power with lower debt levels, good capital allocation and solid cash flows, which continues to drive a brilliant stock performance.”
In the Antipodes, Kathmandu's full year profit has fallen by 11 per cent but it expects an improved result in the year ahead. The retailer posted a net profit of Z34.9 million New Zealand dollars in the year to July 31, down from 39.1 million in the previous year.
"We will improve company performance by continuing to invest in our store network through opening new stores and relocating or refurbishing existing stores," CEO Peter Halkett said in a statement. Sales were higher than in the previous year, but profit margin shrank due to the cost of a new loyalty program, and costs were higher due to store relocations and refurbishments.
Corporate news also in Australian Billabong, which said by to its second pretender, Bain Capital, and consequently shed more than 7 percent on Thursday. The US private equity group Bain Capital withdrew from negotiations to buy the company, leaving TPG as the sole bidder.
Billabong shares dived on the news, falling 12.5 cents to 1.32 dollars, their lowest price since the company announced that a rival bidder had emerged two weeks ago.