Ralph Lauren and Jones Apparel beat estimatesThursday, 09 February 2012
Wednesday closed mixed, with a vast of majority of fashion
stocks heading into the red, exception made out of Ralph Lauren and Jones Apparel, both beating market estimated. The FashionUnited Top 100 Index hit the 1,362.27 after rising by 4.89 points.
Ralph Lauren (RL) beat estimates by 12 cents and revenue by $60M while Jones Apparel Group (JNY) also did it by 9 cents, while missing revenue by $37M. The latter reported Wednesday results for the fourth quarter and year ended December 31, 2011. Revenues for the fourth quarter of 2011 were $894 million, as compared with $874 million for the fourth quarter of 2010. Revenues for the full year 2011 were $3,785 million, against the $3,643 million from he previous year.
Elsewhere, UBS renewed its vision on revenue upside for Nike given new product innovation, new businesses, and an accelerating digital strategy, trade media reported from Wall Street. Shares are “Buy” rated. The firm said the most visible catalysts are new footwear innovation for the London Olympics, the recently acquired NFL license, and new digital sports programs. In the same vein, Seeking Alpha stressed how well positioned Nike is to benefit from improved pricing power. "The NIKE+ FuelBrand, in particular, represents a major catalyst in securing the company's market dominance. Nike has been implementing a social networking promotional campaign to boost demand. Consensus estimates for Nike's EPS forecast that it will grow by 12.3% to $4.93 in 2012 and then by 17.8% and 16% in the following two years. Assuming a multiple of 21.5x and a conservative 2013 EPS of $5.77, the rough intrinsic value of the stock is $124.06".
In London, Next fell 33p at 2,722p and luxury brand Burberry dropped by 17p at 1,403p, also hit by a reported slowdown in China. Also shares in Supergroup collapsed on Wednesday after the fashion company issued a profit warning in the wake of slowing sales growth. Analysts presaged further downgrades. ‘Retail sales during the quarter have been mixed, with a challenging last three weeks of January,’ said Julian Dunkerton, chief executive at the owner of popular SuprDry brand. Supergroup lost 101p, or 14% to 599p, after the Superdry fashion brand owner revised down its full-year profit guidance towards the lower end of market expectations, near £50 million. With like-for-like growth coming in at 4.4% in the third quarter as a whole, compared with the 9.3% increase seen in December alone, the firm now expects full-year pre-tax profit to be at the lower end of the £50-54.1m range.
Meanwhile in Paris, LVMH retreated for the second consecutive day after Paolo Bulgari, Nicola Bulgari and Francesco Trapani sold 4.48 million shares in the luxury giant at 124.50 euros per title. In a statement released on 6 February, the family said the sale, which was worth €588 million, was necessary to pay taxes and other costs. The Italian family acquired a 3% stake in LVMH in March 2011 as part of a share swap, which saw the French group acquiring a controlling stake in Bulgari. The value of LVMH shares have since increased by 23%.