Retailers, consumers and prices
We are in the heart of the earnings season and every day brings reports that offer grist for both sides of the argument about whether the recovery has begun.
For the optimists, we have sports clothing and footwear maker Under Armour, which posted a stronger-than-expected quarter and raised its outlook, and yoga clothing and athletic gear maker Lululemon Athletica, which raised its forecast.
Meanwhile, DineEquity, home of the Rooty Tooty Fresh ‘N Fruity breakfast at IHOP, topped Wall Street’s expectations due to lower costs, and better sales and more efficient staffing allowed outdoor gear retailer Cabela’s to post stronger-than-expected earnings.
On the other side of the tug-of-war, pessimists can point to VF Corp. The maker of such brands as the North Face, Vans, Wrangler and Lee missed analysts’ expectations and said consumer spending would remain challenged.
Under Armour, which uses technical fabrics and materials to wick sweat away from athlete’s bodies, reported a smaller drop in net profit than analysts had expected and raised its outlook for income from operations for the year.
In other “no-sweat” news, Italy’s Geox, whose shoes are made with breathable soles, reported a 13 percent rise in first half net profit, sending its shares higher. The company is projecting 20 percent annual sales growth over the next three years, helped by new stores.
Results from the shoe and apparel makers joined several other consumer companies whose results beat Wall Street expectations, from Pilgrim’s Pride to Jarden and Masco.