Hot Topic Inc. (NASDAQ: HOTT) is higher as a turnaround stock, but it lost $6.2 million for the quarter to come in at -$0.14 EPS.  The boost is from a $25 million share buyback plan.  Shares fell 1% in regular trading to $6.95, but the stock is up 4% at $7.23 in the after-hours.

Invesco Mortgage Capital Inc. (NYSE: IVR) had already had one secondary offering not too long ago at the end of June, and now it has signaled that it will sell 20 million more in shares.  Shares are trading down 3.3% at $18.65 in the after-hours session.

JDS Uniphase Corporation (NASDAQ: JDSU) is down considerably after turning in a mere $0.04 net EPS on $0.23 adjusted EPS.  The guidance is where the trouble comes into play.  Shares closed down 1.7% at $11.70 and the stock is now down what is approaching double-digits in percentage terms at $10.60.

Limited Brands, Inc. (NYSE: LTD) is bucking some of the margin issues in retail apparel stores.  The company posted $0.48 EPS vs. $0.46 estimates and it raised 2011 guidance to $2.35 to $2.40 EPS after giving same-store sales guidance for the next quarter in the high single-digit range.  Shares were down 1.4% at $34.34 today but the stock is now up 3.6% at $35.50 in the after-hours.

NetApp, Inc. (NASDAQ: NTAP) is hurting: The company reported earnings of $0.54 EPS before items and gave guidance for earnings down at $0.38 to $0.42 EPS for next quarter.  The company also announced the retirement of its CFO.  Shares were down over 3% at $41.66 today, but now the stock is down more than 11% more at $36.95 in the after-hours session.  What will hurt more than anything is that the prior 52-week low was $38.00.  So much for this one being immune to the market and economy.

PetSmart, Inc. (NASDAQ: PETM) looked ok on the surface at $0.54 EPS vs. $0.51 estimates.  The company also put 2011 guidance at $2.40 to $2.48 EPS versus a prior target of $2.32 to $2.42 EPS. The problem is that Thomson Reuters was already at $2.43 EPS.  Shares closed down $0.03 at $41.56 and the after-hours market is down more than 3% at $40.15 in the after-hours.

Synopsys Inc. (NASDAQ: SNPS) said revenue rose almost 15% to $386.8 million and gave guidance for next quarter for revenues to be in a range of $386 to $392 million.  It also gave guidance of $1.531 to $1.537 billion in 2011 sales, all of which are slightly above estimates from Thomson Reuters.  Shares closed up 3.8% at $23.44 and the stock is up another 1.5% at $23.80 in the after-hours session.

Gentium S.p.A (NASDAQ: GENT) is getting whacked after announcing that the company was withdrawing its NDA for Defibrotide after recent correspondence from the FDA identifying numerous “Refuse to File” issues regarding the completeness of the datasets for both the treatment and prevention studies. The FDA has also requested that Gentium conduct additional quality reviews and requested additional details regarding the conduct and monitoring of the trials by the independent review committee.  Ouch.  Shares closed down 2% at $8.79 but the stock is down close to 30% at $6.30 in the after-hours session.

Some of these prices may be grossly different after the conference calls and by the morning.

JON C. OGG

Same-store sales at Costco Wholesale Corp. (NASDAQ: COST) rose 12% in April, better than the forecast 8.9%. Excluding gasoline, sales rose 6%, again better than estimates of 4.3%.

Target Corp. (NYSE: TGT) reported same-store sales rose by 13.1%, a huge change from last year when sales were down -5.9% for the month of April. The company had been expecting somewhat better performance, and noted customer spending was still cautious. Year-to-date sales are up 2%, compared with last year’s mark of 2.8%.

BJ’s Wholesale Club, Inc. (NYSE: BJ) posted a same-store sales boost of 4.1%, excluding gasoline sales. The number was below analysts’ estimates of 4.9%.

Clothing retailer Limited Brands, Inc. (NYSE: LTD) crushed sales growth expectations of 12.2%, posting a 20% jump in April sales. The company also raised its outlook from a range of $0.26-$0.31, to a new range of $0.37-$0.39, excluding items.

Nordstrom Inc. (NYSE: JWN) posted a same-store sales gain of 7.6%, lower than expectations of 8.1%.

Macy’s Inc. (NYSE: M) reported a same-store boost of 10.8%, compared with expectations of an 8.1% gain. The company also noted a jump of more than 50% in online sales for the month and a 38% boost in the first quarter. Online sales contributed 1.3% of the same-store sales boost of 5.4% for the first quarter of 2011.

There was also some bad news. Teen retailer Aeropostale Inc. (NYSE: ARO) cut its first-quarter profit forecast from $0.35-$0.38 to around $0.20. The company blamed the cut on poor sales and margins. Analysts were expecting EPS of $0.37. Same-store sales for the quarter fell -7%, compared with a gain of 8% in April 2010.

Zumiez Inc. (NASDAQ: ZUMZ) posted a same-store sales gain of 17.5%, beating expectations of a 14% jump. Another teen retailer, Hot Topic Inc. (NASDAQ: HOTT) sales rose 10.5%, much better than estimates of 3.4%.

The good sales report haven’t moved stocks much in the pre-open, with Limited Brands and Macy’s up less than 1%. Aeropostale is down nearly -10%, to $22.99 in a 52-week range of $21.26-$31.31.

Paul Ausick

American Capital Agency Corp.  (NASDAQ: AGNC) is down 3.3% premarket on heavy volume to $28.13, relative to a 52-week range of $24.06-$30.68.  The company initiated a public stock offering valued at $780 million.

Hot Topic, Inc. (NASDAQ: HOTT) is up 8.6% premarket on very light volume to $5.60, relative to a 52-week range of $4.58-$9.96. The company reported the replacement of a board member.

Netflix, Inc. (NASDAQ: NFLX) is up 3% premarket on moderate volume to $219.50, within a 52-week range of $70.05-$247.55. According to AOL jobs, the video rental and streaming company is one of the ten biggest hiring companies this week.

Now that the holiday numbers are in for US retailers, it’s time again for the annual ritual of shuttering some under-performing stores. One of the first is J.C. Penney Co. (NYSE: JCP), which has announced the appointments of two new directors to its board. Another company that can expect to see some changes soon is Radio Shack Corp. (NYSE: RSH), which has announced the retirement of its CEO in May. And other changes are sure to follow.
At Penney’s, the new directors, activist investor William Ackerman and Vornado Realty Trust chairman Steve Roth, have already had an impact even though they won’t be officially seated until the board meeting on February 22. The retailer plans to close six department stores and 19 outlet stores, as well as consolidate its call center operations. Radio Shack’s earnings have suffered, and the store has been a takeover target for the last year, but there hasn’t been a lot of interest.

Some other retailers having earnings difficulties and that may be in for some changes include American Eagle Outfitters, Inc. (NYSE: AEO), Hot Topic, Inc. (NASDAQ: HOTT), Aeropostale, Inc. (NYSE: ARO), and The Wet Seal, Inc. (NASDAQ: WTSLA).

American Eagle’s December same-store sales fell -11%, and sales fell by -6% across all stores. Whether the chain will have to close stores could be a decision for a new owner. Morningstar has listed American Eagle as its most likely retail takeover target for 2011. A buyer, presumably from among the private equity funds, would almost certainly reduce the number of stores.

Hot Topic has probably overbuilt and its poor showing in same-store sales for both November and December underscore the issue. For some reason company management has not reduced the number of stores and it continues to invest in an online music business that hasn’t got a chance of being successful.

Aeropostale posted weaker same-store sales in December, down 5% from a year ago. The company operates more than 900 stores, but if sales continue to decline, the company may have no choice but to close some stores. On the upside, the company has no long-term debt. Aeropostale’s stock trades about 10% higher than it did a year ago, but a poor same-store sales report for January could turn that around in a hurry.

Wet Seal has just named a new CEO, the former president and chief merchandising officer for American Eagle. Wet Seal’s P/E ratio for the trailing twelve months is just 4.31. The company has failed to grow sales and its operating margins are low. This company may have no other choice but to close stores to increase profitability. If it does that, however, its sales will suffer. The new CEO has her hands full with this one.

Rising prices for cotton will put a lot of pressure on profitability in the retail clothing sector. These companies have to hope that consumers are getting back into a buying mood again if the retailers expect to see growth in sales. Otherwise, store closings could become the path to profitability, sales be damned.

Paul Ausick

A rough retail environment always means higher discounts, and special services that cost companies a great deal of money. Major retailers such as Wal-Mart began slashing prices last month. The company is so large that its decisions often set the tenor for the sector. Another important development  is the rise of online powerhouses like Amazon, eBay, the search engines, and sites like Groupon on what was once a solely bricks-and-motor business.

Retail is an outstanding example of an industry where the rich are getting much richer and the poor are disappearing.This has happened in the past. There was a time when JC Penny and K-Mart were dominant retailers. Wal-Mart’s huge success is only a few decades old.  The companies we’ve highlighted are being muscled out of their market share by the most powerful players in their industries. History shows that this cycle is not unusual.

This 24/7 Wall Street analysis has identified companies the fortunes of which we think will be very badly damaged this holiday season.

 
That one belongs to Costco Wholesale Corp. (NASDAQ:COST). Same-store sales rose 6% in October; excluding gasoline and currency effects, Costco same-store sales rose 5%. Another gainer was Macy’s, which saw sales rise 2.5%, higher than estimates of a 1.6% gain. Macy’s also announced that it expects same-store sales in its fourth quarter ending in January to rise 3%-4%, up from previous guidance of 3%-3.5%.

 
Limited Brands Inc. (NYSE:LTD) reported October same-store sales rose 9%, and the store followed Macy’s in raising its estimates of future profits. Limited estimates third quarter EPS will be $0.15-$0.17, a big jump from previous estimates of $0.03-$0.05. Third quarter estimates are also higher than analysts’ expectations of $0.11 EPS.

 
Another discounter, BJ’s Wholesale Club Inc. (NYSE:BJ) posted a same-store sales increase of 2.2%, excluding gasoline sales. Gasoline sales added another 1.5% to the increase. Close-out store Big Lots Inc. (NYSE:BIG) reported October same-store sales up 0.7%, but noted that sales were “inconsistent” in the second half of the quarter, which includes October. Target Corp. (NYSE:TGT) posted growth of 1.7% in October, near the low end of its own expectations. Analysts had expected growth of 1.5%.

 
Gap Inc. (NYSE:GPS) handily beat estimates that October same-store sales would fall -2.5% by posting a gain of 2%. Gap’s North American stores had a sales increase from a -6% loss for October 2009 to a 5% gain this year. The Banana Republic and Old Navy stores posted lower growth than last October, with Banana Republic ending with a loss of -1% for the month.

 
Teen clothier Abercrombie & Fitch Co. (NYSE:ANF) reported same-store sales up 2%, far below expectations of 5.6%. Abercrombie also noted that beginning with its 2011 fiscal year in February it will no longer report monthly sales.

 
The biggest misses came from Stein Mart Inc. (NASDAQ:SMRT) and Hot Topic Inc. (NASDAQ:HOTT). Stein Mart sales were down -6.5% and Hot Topic was down -8.5%. Drugstores Rite Aid Corp. (NYSE:RAD) and Walgreen Co. (NYSE:WAG) both saw sales fall by -1.3% and -1.7%, respectively.

 
October sales generally depend on promotions and, with winter gear on the retailers shelves, warm fall weather can push sales down too. Overall, sales increases in the month were originally slated at 2.2%, but that number was later lowered to 1.7%. According to Retail Metrics, overall growth was just 1.5%.

 
There is hope that good October sales will translate into good holiday season sales. But high unemployment and an overall weak economy don’t point in that direction.

 
Paul Ausick

Among department stores, Macy’s Inc. (NYSE: M) gained 4.3%, also higher than an expected 4% increase. J.C. Penney Co. Inc. (NYSE: JCP) gained 2.3%, better than the expected 1.6% increase. Kohl’s Corp. (NYSE: KSS) same-store sales rose 4.5%, substantially higher than the expected 2.6% increase.

Apparel retailers were somewhat more mixed. Nordstrom Inc. (NYSE: JWN) saw sales rise 6.3%, against expectations of 5.9%. Limited Brands Inc. (NYSE: LTD) sales jumped 10%, significantly above expectations of 7.3%. Gap Inc. (NYSE: GPS) same-store sales were flat, which was better than the expected -0.2% decline. Abercrombie & Fitch (NYSE: ANF) sales rose 6%, compared with expectations of 5.9%, while same-store sales at Aeropostale Inc. (NYSE: ARO) fell -1%, compared with an expectation of a 1.2% gain.

Buckle, Inc. (NYSE:BKE) same-store sales fell -3.5%, which would not be good except that analysts had been expecting a drop of -6.5%. Hot Topic, Inc. (NASDAQ:HOTT) posted a drop in sales of -3.7%, significantly better than the expected decline of -6.2%. Another teen apparel retailer, Zumiez Inc. (NASDAQ:ZUMZ) posted a rise of 9.1%, much better than the expected 7.7% growth.

Wary consumers could be waiting for sale prices to begin showing up, or they could be just trying to make do. The sales increases at the discounters, especially Family Dollar stores, indicate that low prices are attracting more customers.

The important point about all this is that last year’s August sales were so lousy that any improvement looks huge. US shoppers are not convinced yet that it’s safe to shop again. And who can blame them?

Paul Ausick

Costco Warehouse Corp. (NASDAQ:COST) reported a 4% rise in same-store sales, with a 2% increase in US sales and a 14% jump in international sales. Target Corp. (NYSE:TGT) sales rose just 1.7%, Limited Brands Inc. (NYSE:LTD) sales were up 6%, Macy’s (NYSE:M) rose 6.5%, Nordstrom Inc. (NYSE:JWN) rose a whopping 14.1%, American Eagle Outfitters (NYSE:AEO) sales fell 1%, Gap Inc. (NYSE:GPS) sales were flat, and Hot Topic Inc. (NASDAQ:HOTT) sales were down 2.1%. Wal-Mart Stores Inc. (NYSE:WMT), the world’s largest retailer, no longer reports monthly sales.

The sales gain at Costco included inflated gasoline prices and positive exchange rates on foreign sales. Excluding these, Costco’s same store sales rose 3%, lower than analysts’ expectations of 3.7%.

Target’s sales were expected to rise 2.7%, but came in a full point lower. Combined with Costco’s results, the large discount stores did not perform to expectations, which is not a good sign.

Apparel stores American Eagle, Gap, and Hot Topic could do no better than flat. Two of the three actually performed lower than expectations, continuing the slide at stores for teens. Hot Topic, which saw May sales fall 9%, made something of a comeback in June, beating expectations of a decline of -5.4%. Gap sales were flat with last year, but 2009 sales were down -10% from 2008, so this year’s figures represent no more than a Pyrrhic victory.

Department stores Macy’s and Nordstrom both posted better-than-expected sales, with Nordstrom beating expectations by nearly 5%.

Retail analysts noted that clothing stores bumped up discounting as June ended, trying to make up for weak sales earlier in the month. Discounting was about the same as a year ago, but that is worse than May, when discounts were 5% less than May 2009.

Overall, sales gains reached about 3.5% in June, compared with a gain of 2.7% in May. For the year so far, sales have gained 4% according to the International Council of Shopping Centers. The group expects total 2010 sales gains of 3.5%-4.5%, compared with a drop of -1.6% in 2009.

In order to live up to these expectations, shoppers are going to need to regain confidence that their jobs are secure and that their house is still worth something. That is not a slam-dunk.

No wonder Dollar Stores is becoming the next Wal-Mart.

Paul Ausick

Brocade Communications Systems, Inc. (NASDAQ: BRCD) is trading more like Broke-Cade at the Arcade after earnings.  While we expected weak earnings, this is still one of our few stocks which can double over the next couple of years.  Shares closed down 3% at $5.87 today, and then the stock is down almost 9% at $5.35 on over 2.5 million shares since the closing bell. Keep in mind this is averaging about 24 million shares a day now.

Celldex Therapeutics, Inc. (NASDAQ: CLDX) had a bad day with a 14% drop to $7.68, but in the after-hours session the stock is down another 19% at $6.20 on another 68,000 shares since the closing bell.  Someone yelled out “Sell-Dex!” it seems.

Dell Inc. (NASDAQ: DELL) is off the earlier lows after earnings failed to impress.  We have seen 3,270,435 shares trade since the close and shares are down 3.8% at $13.77 after the stock closed lower at $14.32 today.

Foot Locker, Inc. (NYSE: FL) is trading higher with a 74% profit gain and after beating earnings expectations.  Shares were up over 6% in the after-hours session but shares are now up 4.17% at $14.00.

Hot Topic, Inc. (NASDAQ: HOTT) closed down  almost 10% in regular trading after posting a loss.  But shares have slid further by 9.8% at $5.30 on 63,000 shares since the closing bell.

Marvell Technology Group Ltd. (NASDAQ: MRVL) is trading higher after earnings showed it moved from a loss to a $206 million profit above estimates.

Nordson Corporation (NASDAQ: NDSN) beat earnings as sales rose 33% and the stock is up 5% at $66.00 on only 7600 shares.

Salesforce.com Inc. (NYSE: CRM) is down and it may finally have to start worrying about that incredibly high P/E ratio.  Shares closed down 3% at $79.03 and shares are down another 6.2% at $74.10 in the after-hours session.  While sales rose 24%, its net income after items was down and its guidance was short of some expectations.

Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) beat first quarter results, but its lower guidance left holders feeling like they own stock in a buger joint called Dead Robin.   Shares closed down 6.3% at $23.56 in normal trading, and Dead Robin is down another 11.3% in the after-hours session at $20.90 on 33,000 shares since the closing bell.

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JON C. OGG

These are not all dividend hikes.  Some are speculation of higher payouts and some are explanations about changes in dividend rates.  This is a much more expanded week of dividend news compared to what would have been normally expected in a pre-earnings season week that was light on news.

BP Prudhoe Bay Royalty Trust (NYSE: BPT) declared a $2.2668963 for Q1.  This may seem like a drop compared to what looked like a record level of $3.612 at its last distribution.  These payments are always different and sporadic based upon a myriad of factors from operations, to return of capital, to seasonality, and more.  Here was the last few dividends declared as an example: $1.73 Dividend; $1.65 Dividend; $0.992 Dividend; $1.637 Dividend; and $2.937 Dividend….

Tanger Factory Outlet Centers Inc. (NYSE: SKT) boosted its payment this week on an annual dividend to $1.55 per share from $1.53 per share basis.  That is above 3.5% now and we’d note that the Thomson Reuters estimates are much better than the trailing 12 months at $2.66 for December-2010 and $2.81 for December-2011.

Monro Muffler Brake, Inc. (NASDAQ: MNRO) declared a final $0.07 dividend but for the year ahead it has declared that it will begin paying a $0.09 dividend per quarter.

QUALCOMM Inc. (NASDAQ: QCOM) was a bit of a misnomer when it came to a raised dividend.  The $0.19 dividend declared was higher than a year ago.  The problem is that QUALCOMM already raised its dividend and upped its share buyback plan when its stock was in severe trouble as a stabilization factor.  Some aggressive reporting brought up the thought that was a raised dividend, which is not the company trying to pass of re-news.

Paychex, Inc. (NASDAQ: PAYX) came up in a personal conversation this week as to why it did not raise its dividend.  It announced its same $0.31 per share payout.  The reason is simple.  The company is just coming off the worst employment cycle in a generation and consensus analyst targets from Thomson Reuters are May-2010 at $1.34 EPS and May-2011 at $1.43 EPS.  The dividend coverage ratio here is just still too close.  It raised the dividend a penny in 2008 but the big hike came in 2007 when the dividend went from $0.21 to $0.30.  While everyone likes to see dividend hikes, some patience is needed here before a hike should be demanded.  In fact, investors may feel lucky that it did not do the dividend cut seen elsewhere.