When the stores reported first quarter earnings, the preponderance of guidance pointed to slower sales in the second quarter likely based on sales pulled forward into the first quarter due to warm weather. But it could be the case that falling gasoline prices are giving sales a lift in May that could continue through June. According to the latest report from Retail Metrics, retailers are on track to post a comparable store sales gain of 3.6% in May, excluding the negative effect of lost sales at Walgreen Co. (NYSE: WAG) due to its being dropped by pharmacy benefits management firm Express Scripts Inc. (NASDAQ: ESRX).

We looked at a dozen retailers with an eye toward discerning value opportunities for investors: Costco Wholesale Corp. (NASDAQ: COST), Wal-Mart Stores Inc. (NYSE: WMT), Target Corp. (NYSE: TGT), Macy’s Inc. (NYSE: M), Kohl’s Corp. (NYSE: KSS), J.C. Penney Company Inc. (NYSE: JCP), Gap Inc. (NYSE: GPS), Limited Brands Inc. (NYSE: LTD), American Eagle Outfitters Inc. (NYSE: AEO), Abercrombie & Fitch Inc. (NYSE: ANF), The TJX Companies Inc. (NYSE: TJX), and Dollar General Corp. (NYSE: DG).

Costco Wholesale Corp. (NASDAQ: COST) traded at $84.14 and has a market value of around $37 billion. The consensus target price from Thomson Reuters is $86.83 and the 52-week range is $70.22-$92.10. Costco has a dividend yield of 1.3%. The implied upside to the consensus target is just 3%, and we would note that the target is below the 52-week high.

Wal-Mart Stores Inc. (NYSE: WMT) traded at $64.65 and has a market value of around $220 billion. The consensus target price from Thomson Reuters is $65.28 and the 52-week range is $48.31-$64.88 (new high set today). Walmart has a dividend yield of 2.5%. The implied upside to the consensus target is barely 1%, but we would note that the target is still above the 52-week high.

Target Corp. (NYSE: TGT) traded at $56.84 and has a market value of around $38 billion. The consensus target price from Thomson Reuters is $63.65 and the 52-week range is $45.28-$58.95. Target has a dividend yield of 2.1%. The implied upside to the consensus target is 12%, and we note again that the target is above the 52-week high.

Wall St. has abandoned MSO shares because consumers have abandoned the firm’s products. Shares trade just over $3, down from more than $18 five years ago. That gives the company a market capitalization of only $207 million. Another sign of investor disinterest is that the stock trades, on average, less that 150,000 shares a day.

Investors lack interest for one simple reason: MSO has lost money four calendar years in a row. Revenue in 2007 was $328 million. Last year, that number fell to $221 million. First-quarter figures continued the trend. Revenue fell to $49.8 million from $52.7 million in the same period a year ago. The company had a net loss of $3.6 million.

MSO has attempted to build its some of its business on a series of partnerships with retailers and other companies that sell goods to consumers. The most recent misstep in this direction was a deal with JCPenney (NYSE: JCP) made in January. JCPenney invested $16.6 million in MSO and set a housewares partnership between the two companies. Macy’s (NYSE: M) challenged the deal because it claims to have an exclusive relationship with Martha Stewart Living. The fight has become less important that the original decision. Macy’s is healthy. JCPenney is a wreck that lost 20% of its sales last quarter. Under new CEO Ron Johnson, JCPenney will be lucky to remain a viable competitor in its range of the department store industry.

It is impossible to say with any conviction what happened to Martha Stewart Omnimedia. Its founder was once an important consumer brand on her own. That period is now nearly five years gone.

Douglas A. McIntyre

Lightly followed Sears reported an adjusted EPS loss of -$0.31 for its first quarter, less than half the consensus (three analysts) estimate of an EPS loss of -$0.67. Revenue came in at $9.3 billion, compared with an estimate of $9.15 billion. On a GAAP basis, Sears posted EPS of $1.78.

The gains at Sears are almost entirely due to the dismantling of the company. The company sold $440 million worth of US and Canada leases during the quarter, and is continuing with its plan to spin-off the Outlet and Hometown stores in the third quarter for another gain of $400-$500 million. Sears also closed stores and is planning to spin-off to existing shareholders about 44% of its holdings in Sears Canada, leaving Sears Holdings with a 51% ownership share.

Walmart, far from dismantling itself, touts its 20% growth in operating income from its international operations. That includes its stores in Mexico — ahem. Walmart posted EPS of $1.09 versus an estimate of $1.04, and revenue of $112.3 billion versus a consensus estimate of $110.5 billion. On a constant currency basis, revenue totaled $111.2 billion. Currency transactions cost the company $800 million in the quarter. Walmart guided EPS for its second quarter at $1.13-$1.18, where the consensus had been $1.16.

At Walmart’s US division, operating income rose by 8.1% “due primarily to higher sales, aided by our price investment strategy, our continued focus on productivity and expense management. Walmart U.S. leveraged expenses for the quarter.” Walmart’s short-term borrowing at the end of the quarter totaled $5.8 billion, up from $4.05 billion in the first quarter and much higher than the $3.45 billion in short-term loans in the same period a year ago. The company plans to continue to “leverage expenses” in the coming quarter.

When Target Corp. (NYSE: TGT) reported earnings yesterday it, too, showed a nice gain but the stock price rose less than 1%. J.C. Penney Company Inc. (NYSE: JCP) got slaughtered yesterday for missing estimates, and Home Depot Inc. (NYSE: HD) took its lumps on Monday.

For different reasons, both Sears and Walmart expect to get a share price boost today. No such luck for Dollar Tree Inc. (NASDAQ: DLTR) which met both EPS and revenue forecasts, but guidance for the second quarter came up short, with EPS guided to $0.87-$0.93, below the consensus estimate of $0.95. Another super-discounter, Dollar General Corp. (NYSE: DG) is expected to post EPS of $0.60 on revenue of $3.82 billion when it reports results for its quarter ended in April.

Shares of Sears are up 7.6% in the pre-market this morning, at $54.75 in a 52-week range of $28.89-$85.90. Shares of Walmart are up about 3.5%, at $61.24 in a 52-week range of $48.31-$62.63. Dollar Tree’s shares are getting pummeled, down nearly -6% at $95.30 in a 52-week range of $59.90-$104.08.

Paul Ausick

Einhorn’s reasons for beating up on Amazon’s stock are not compelling. Wall St. does not need to look beyond the recent results of JCPenney (NYSE: JCP) and other mid-tier retailers, or even big-box retailer Walmart (NYSE: WMT). Online shoppers have found Amazon irresistible. It has run several competitors, particularly Barnes & Noble (NYSE: BKS), almost out of business.

A victory over competition is not necessarily an outright win. Amazon has to show consumer loyalty and profits to make a final convincing case. The well-regarded Foresee study of e-commerce user customer satisfaction had Amazon on top again. It was even ahead of Apple’s (NASDAQ: AAPL) e-commerce customer satisfaction, and was it far ahead of e-commerce satisfaction for all bricks-and-mortar retailers. The survey was based on a large sample of 21,000 respondents, too.

The other criticism of Amazon concerns its margins. Despite a 34% increase in Amazon’s revenue last quarter to $13.2 billion, net income fell 35% to a tiny $130 million. There are at least two ways to look at the net income figure. One is that Amazon cannot control its costs despite rapid sales growth. The other is that the company has elected to forgo higher margins for now because there is a cost to crush competition. The value of Amazon’s stock indicates a majority of investors believe that the second case is true.

The debate about Amazon’s future reemerges with each new earnings report and product introduction. Despite these questions, Amazon has overcome the rule that sales growth slows as companies get larger. Only a few other companies that have been public for a long time have also been able to demonstrate this. Apple is the first one that comes to mind.

Amazon, despite Einhorn’s protests, has shown almost nothing to shake the opinion that nearly every major decision made by its management has made has been right.

Douglas A. McIntyre

The unofficial closing bells put the DJIA down more than 33 points to 12,598.63 (-0.26%), the NASDAQ fell nearly 20 points (-0.68%) to 2,874.04, and the S&P 500 fell -0.44% or nearly 6 points to 1,324.81.

There were several analyst upgrades and downgrades today, including Cisco Systems Inc. (NASDAQ: CSCO) raised to ‘overweight’ at Barclays; Patriot Coal Corp. (NYSE: PCX) cut to ‘market perform’ at FBR; Aetna Inc. (NYSE: AET) cut to ‘hold’ at Argus; Baker Hughes Inc. (NYSE: BHI) cut to ‘neutral’ at JPMorgan; and SandRidge Energy Inc. (NYSE: SD) raised to ‘hold’ at Canaccord Genuity.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: 8×8 Inc. (NASDAQ: EGHT) is down -1.5% at $3.86; Chico’s FAS Inc. (NYSE: CHS) is up 4.2% at $15.28; Deere & Co. (NYSE: DE) is down -3.1% at $74.23 (more coverage here); Eagle Materials Inc. (NYSE: EXP) is down -5.2% at $33.13; LiveDeal Inc. (NASDAQ: LIVE) is up 5.9% at $6.14; and Target Corp. (NYSE: TGT) is up 0.7% at $55.49 (more coverage here).

On Thursday we are scheduled to get earnings from Bon-Ton Stores Inc. (NASDAQ: BONT), Dollar Tree Inc. (NASDAQ: DLTR), E-Commerce China Dangdang Inc. (NASDAQ: DANG), GameStop Corp. (NYSE: GME), Jinkosolar Holding Co. Ltd. (NYSE: JKS), Ross Stores Inc. (NASDAQ: ROST), Sears Holdings Corp. (NASDAQ: SHLD), Teekay Corp. (NYSE: TK), and Wal-Mart Stores Inc. (NYSE: WMT).

Other standouts from today include the following stocks:

J.C. Penney Co. Inc. (NYSE: JCP) is down -19.2% at $26.92. The retailer absolutely failed on quarterly results. More coverage here.

Rosetta Genomics Ltd. (NASDAQ: ROSG) is up 263% at $5.88. The medical test making firm will have one of its tests covered by Medicare. There was also a 1-for-15 reverse stock split. More coverage here.

Abercrombie & Fitch Inc. (NYSE: ANF) is down -13.7% at $39.21 after posting a new 52-week low of $38.26 earlier today. The teen retailer badly missed estimates last night.

Stay tuned for Wednesday. St. Louis Fed President James Bullard is giving a speech. We have also noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – New claims for unemployment benefits
• 10:00 a.m. – Philadelphia Fed manufacturing survey
• 10:00 a.m. – E-commerce retail sales
• 10:00 a.m. – Leading indicators
• 10:30 a.m. – EIA weekly natural gas storage report
• 4:30 p.m. – Fed balance sheet and money supply

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Paul Ausick

Yahoo! (NASDAQ: YHOO) had a change forced on it. Whether Scott Thompson, who was chief executive for four months, would have done well as a new leader of a troubled company will never be known. There is at least a chance he might have succeeded, if the scandal about his resume had not occurred. The board of Yahoo! did not get the opportunity to evaluate his tenure because he had none.

Two examples of CEOs who have been hired and supported by their boards despite very poor results are Ron Johnson of JCPenney (NYSE: JCP) and Stephen Elop of Nokia (NYSE: NOK). Elop has run the large handset company since September 2010. Johnson has only run Penney for a little longer than a quarter.

Elop followed Olli-Pekka Kallasvuo as chief executive. Kallasvuo was blamed because he could not transform Nokia into a successful manufacturer of smartphones. He may have stayed with the Symbian operating system, which lost popularity as Google’s (NASDAQ: GOOG) Android and Apple’s (NASDAQ: AAPL) iPhone gained market share. Elop, the Nokia board reasoned, could rely on his years as a the head of Microsoft’s (NASDAQ: MSFT) business division, although the link between that job and being the head of a handset company is difficult to understand.

Johnson’s promise as a turnaround CEO for JCPenney at least had a foundation in the success he had in his former job as head of Apple’s retail division, although some critics believe that Apple would have done well in retail no matter who was in charge. The demand for Apple products assured that. But JCPenney had been nearly ruined by former CEO and chairman Myron E. Ullman III. His strategy to make the retailer a better competitor to companies such as Macy’s (NYSE: M) and Nordstrom (NYSE: JWN) did not advance JCPenney. The company’s board gambled that Johnson could do better.

Elop made one bet on a turnaround of Nokia, and it may have been his best and only chance. He tethered his company’s success to that of Microsoft and its troubled Windows Mobile OS. At least Microsoft had the cash and marketing muscle to press its software into the market, although those efforts have been failures in the past. Elop’s decision did almost nothing for Nokia, at least based on the results from the last year. Nokia’s revenue collapsed along with its market share in smartphones. Microsoft was no help at all. The Nokia board is left to decide whether Elop made the wrong decision, or whether Nokia is doomed along with other companies that have been crushed by Google and Apple: Sony Ericsson, LG and Motorola. Nokia’s future may have been set long before Elop joined. There is no reason to replace him. Who can do any better?

Johnson’s situation is another matter. He decided that JCPenney could only do well if he utterly and completely changed how the retailer brought in customers and turned them into buyers. He rebranded the retailer “JCP.” JCPenney now has three basic tiers of pricing, which are supposed to make it easier for shoppers to decide the value of products sold by the company. The results of the most recently reported quarter show the strategy has not paid off. JCPenney’s same-store sales fell an astonishing 20% and online sales dropped more than 27%. If the results for the current quarter are similar, it will be clear that Johnson’s plan has failed, or that JCPenney has been a failure for some time. The board will have to face the fact that it picked the wrong candidate or that JCPenney cannot survive in its current form in competition with several other larger retailers and e-commerce firms led by Amazon.com (NASDAQ: AMZN). As with Nokia, the battle may have been lost long before the new CEO took up the reins.

The boards of Nokia and JCPenney may as well be passive as their new CEOs preside over companies that continue to fall apart. Neither had any chance of succeeding no matter who was put in charge.

Douglas A. McIntyre

Greeks take hundreds of millions of dollars out of banks there and the government calls national elections. (Reuters)

Shares of JCPenney (NYSE: JCP) fall sharply after it announces poor earnings. (Reuters)

BHP Billiton (NYSE: BHP) says commodities prices will drop more than they have in the past month. (Reuters)

T-Mobile USA will cut 900 jobs as its subscriber count falls. (Reuters)

General Motors (NYSE: GM) will stop advertising on Facebook because of poor results. (Reuters)

Global mobile phone sales drop 2% in the first quarter, according to Gartner. (Reuters)

Activist fund Relational Investors takes a $600 million stake in PepsiCo (NYSE: PEP) and may press to shake up management and strategy. (WSJ)

Nvidia (NASDAQ: NVDA) begins to move graphics functions from PCs to the cloud. (WSJ)

Amazon.com (NASDAQ: AMZN) sharply increases the size of its work force. (WSJ)

House Speaker John Boehner says an increase in the national borrowing level would need to be accompanied by budget cuts. (WSJ)

Two of seven transport workers unions reject contract offers from bankrupt AMR, leaving a judge to decide their fates. (WSJ)

The FBI begins investigating the trading at JP Morgan (NYSE: JPM) that created a $2 billion loss. (NYT)

As consumers move away from soda, PepsiCo and Coca-Cola (NYSE: KO) must rely more on bottled water sales. (NYT)

Merkel and Hollande say they want Greece to remain in the eurozone and state that stimulus measures might be in order. (FT)

European car sales fall more than 6% in April, according to the European Automobile Manufacturers’ Association. (Bloomberg)

Douglas A. McIntyre

Penney shares fell 14% after hours to $28.25, as the company posted awful earnings. Johnson has not learned to admit problems in the face of bad news. His comment about the quarter was this: “Sales and profitability have been tougher than anticipated during the first 13 weeks, but the transformation is ahead of schedule. Customers love the new jcp they discover in our stores”. He is fortunate that his job does not rely on his judgement, at least for now.

Proof that Penney has actually lost ground:

Comparable store sales for the first quarter declined 18.9 percent. Total sales decreased 20.1 percent, which includes the effects of the Company’s exit from its outlet business. Internet sales through jcp.com were $271 million in the first quarter, decreasing 27.9 percent from last year.

The P&L for the quarter showed revenue down 20% to $3.152 billion. The company lost $163 million. EPS went from $.28 last year to a loss of $.75. The retailer also suspended its dividend

Penney was dead before Johnson came. The quarter’s numbers are more proof of it.

Douglas A. McIntyre

Sony (NYSE: SNE) and Panasonic may force a partnership to build OLED TVs. (Reuters)

Trouble at Chesapeake Energy (NYSE: CHK) may prompt low-ball bids for many of the its assets. (Reuters)

New data from the government will show the extent to which people over 55 cannot find jobs. (Reuters)

Coty withdraws its $10.7 billion offer for Avon (NYSE: AVP). (Reuters)

Facebook raises the target of its IPO to $34 to $38, which could push a valuation as high as $106 billion. (WSJ)

LightSquared files for Chapter 11. (WSJ)

The chairman of Best Buy (NYSE: BBY) steps down over governance violations. (WSJ)

Investors are upset that Chesapeake had to take a $3 billion loan. (WSJ)

Baidu (NASDAQ: BIDU) to offer a low-cost smartphone. (WSJ)

Eurostat says EU industrial production fell in the March. (WSJ)

California governor Jerry Brown shows a series of planned cuts as projections for the state’s deficit rise to $15.7 billion. (WSJ)

Nvidia (NASDAQ: NVDA) and Intellectual Ventures buy 500 patents as the chip maker girds for patent wars. (WSJ)

JCPenney (NYSE: JCP) CEO Ron Johnson may be unable to work the same magic he did at Apple (NASDAQ: AAPL) stores. (WSJ)

JP Morgan (NYSE: JPM) CEO Jamie Dimon encourages a culture of risk at the bank. (WSJ)

Facebook still faces the question of how well it can do with smartphones. (FT)

Some EU officials would like to see eased terms of Greece’s austerity commitments. (Bloomberg)

A chip supply shortage could hurt smartphone sales. (Bloomberg)

Apple may launch a thin laptop powered by Intel (NASDAQ: INTC) chips. (Bloomberg)

Douglas A. McIntyre

Macy’s Inc. (NYSE: M) reported earnings earlier this week and beat estimates on both the top and bottom lines. The company’s stock still got beaten down on a weak forecast, and that is what happened to both Nordstrom and Kohl’s as well. Saks Inc. (NYSE: SKS) reports next Wednesday and the consensus estimates call for EPS of $0.18 on revenues of $764.4 million. J.C. Penney Co. Inc. (NYSE: JCP) also reports next Wednesday and is expected to post an EPS loss of -$0.10 on revenues of $3.48 billion.

A beat, though, doesn’t look like it will mean much. What matters now to investors is guidance. Macy’s guided full-year EPS below the consensus estimate and got whacked. Kohl’s guided second-quarter EPS to $0.96-$1.02, below the consensus estimate of $1.11. Nordstrom reiterated its full-year EPS guidance at $3.30-$3.45, below the consensus estimate of $3.48. That’s just not good enough. Dillard’s did the smart thing and did not offer any information on guidance.

Kohl’s shares are down -0.4% just before noon today, at $48.47 in a 52-week range of $42.14-$57.39. Nordstrom’s shares are down -2.8% at $52.02 in a 52-week range of $37.28-$57.75.

Dillard’s shares are up 8.3% at $71.70, after posting a new 52-week high of $71.97 earlier this morning. The previous range was $38.99-$67.22. Dillard’s same-store sales report for May could reinforce the company’s new growth pattern — or turn it south again. Dillard’s offered no hints, so all’s well today.

Paul Ausick