Consumer
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News and Views
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Macro/Technicals
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Earnings
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Sector News, M&A, Capital Raises
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Research Away
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Top Events/Earnings Calendar
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Cantor Flows
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News and Views
Consumer Staples outperformed and were down just a fraction on the day, while Consumer Discretionary was hit after more disappointing news regarding the consumer as home numbers and a poor regional fed number had stocks lower all day. There were over 20 retailers down over 5% and after hours PSUN beat by .01, but poor guidance has the stock down 6%. AEO reports this morning and unless it is a disaster the stock should move up as much of the “bad” is priced in the stock.
Macro/Technicals
SPX: 1051.87; -1.45%RLX: 399.72; -1.31%
RTH: 87.99; -.77%
XLY: 30.10; -1.70%
XLP: 26.66; -.49%
VIX: 27.46; +7.01%
Leaders: HRG, WNI, ACAT, SAH, TUES, PSMT, CBK, COST
Laggards: SCSS, MPX, BGP, BBW, OWW, ODP, ZLC, ZQK
Earnings
PSUN Pacific Sunwear reports Q2 EPS ($0.22) vs Reuters ($0.23). Company reports revenues of $218.3M vs Reuters $213.1M. Guides Q3 EPS to ($0.09)-(0.16) vs Reuters ($0.12). Note that both Q2 EPS and guidance are non-GAAP and assume a normalized tax rate of 36-37%
PERY Perry Ellis reports Q2 EPS ($0.15) vs prior guidance of ($0.17)-($0.15) ($20.47). Company reports revenues of $161.8M vs prior guidance of $162M. Guides full year EPS to
$1.53-$1.68 vs. prior guidance of $1.45-$1.60 vs Reuters $1.65; reaffirms revenue guidance of $775M-$795M vs Reuters $785.0M.
CWTR Coldwater Creek reports Q2 EPS $0.02 vs Reuters ($0.04) ($3.35). Company reports revenues of $253.5M vs Reuters $233.8M.
- Comparable premium store sales +4.8% y/y vs SA consensus +1.1%
- Direct sales (internet and phone) increased 39.0% to $58.1M from $41.8M in the same period last year.
- Guides Q3 EPS to $0.01-0.04 vs Reuters $0.03; expected results for Q3 assume a low single digit year-over-year increase in total net sales.
- Reaffirms full year EPS guidance of $0.08-0.12 vs Reuters $0.06.
BWS Brown Shoe reports Q2 EPS $0.15 ex-items vs Reuters $0.09 ($12.80). Company reports revenues of $585.8M vs Reuters $579.4M. Inventory at quarter-end was $578.1M, a 9.7% increase from the year-ago level of $526.8M. Average units on a per-store basis at Famous Footwear increased 8.9% at quarter-end versus the year-ago period. Inventory at the Wholesale division increased 28.3% y/y.
Sector News, M&A, Capital Raises
WSJ looks at ecigarettes--People want to sell and buy them as alternatives to actual cigarettes, but the FDA says they are drug-delivery devices, and they therefore need premarket approval. Ecigarette companies say clinical trials would simply be unaffordable. The article raises the possibility that the FDA could view ecigarettes as tobacco products -- ecigarettes have no tobacco, though they contain nicotine derived from tobacco -- but the agency has so far maintained that they are drug-delivery devices. The FDA had a January ruling against it (see linked article) stayed, pending an appeal, and it continues to prohibit importation of Chinese ecigarettes into the US.
Random House gets ebook rights from Wylie Agency – NYT. The publisher says it will again do business with the agency, which it severed ties with in July after Odyssey Editions signed an exclusive deal with Amazon to sell electronic versions of 20 classic books, 13 of which were Random House titles. The Random House titles will now be available at other ebook sellers, as well. The article does not indicate that the agreement has resolved the more fundamental question of who owns the rights to publish ebooks for works published at a time when publishing contracts did not specify who owns those rights.
KO The Coca-Cola to refile HSR application to FTC for approval of acquisition of N American bottling business of Coca-Cola Enterprises (CCE) ($55.65). The company has withdrawn and will refile its notification and report form filed with the Federal Trade Commission (FTC) in order to provide the FTC additional time to review the company's proposal to acquire Coca-Cola Enterprises' (CCE) North American bottling business. The Coca-Cola company originally filed its required notification with the FTC on June 30. Following discussions with the U.S. competition authorities, the company withdrew its notifications and report form on July 30 and refiled it on Aug. 2, in order to allow more time for the competition authorities to review the proposed transaction. Similarly, the withdrawal today and the planned refiling on Aug. 26 will allow the authorities additional time to review the proposed transaction. Coca-Cola says it remains committed to working cooperatively with the FTC as the commission conducts its review of the proposed transactions and continues to expect completion of the transaction in Q4 of 2010, in line with the timeline originally provided.
Research Away
LZB La-Z-Boy upgraded to buy from hold at Stifel Nicolaus ($6.52). Target is $10. Based on valuation.
Top Events/Earnings Calendar
Earnings
PRE: AEO, BWS, CWTR, DLIA, PERY
POST: GES, HAIN, JAS, RUE, SCVL, TIVO
Cantor Flows
Flows
Consumer Staples: GMCR, HANS, HI, HNZ, NWL, PG, SLE
Consumer Discretionary: AAP, AN, DDS, FLWS, HIBB, KR, KSS, LEG, PBY, SCSS
Consumer Services: ACTG, ABTL
Pre-Market Movers
UP— none
DOWN— PSUN -6%;