Teen stores Buckle and Zumiez battered expectations, while Gap and Wet Seal both missed expectations badly.

Data from CNBC.

Limited Brands’ same-store sales rose 7%, compared with a consensus estimate of 4.4%. Net sales fell by -2.3%, however, from $893 million a year ago to $872.6 million. The company also announced a $2/share special dividend to be paid on December 23rd to shareholders of record on December 12th.

The Talbot’s Inc. (NYSE: TLB) reported third-quarter earnings this morning and posted an adjusted EPS loss of -$0.22, compared with a consensus estimate of an EPS loss of -$0.16. Same-store sales fell by -4% in November. Talbot’s has closed 35 store locations so far this year and plans to close a total of 110 locations by the end of its 2013 fiscal year.

Costco’s same-store sales rose 7%, excluding gasoline and currency effects. Including gasoline, sales were up 9%. Analysts were expecting a rise of 6.5%.

Target posted a same-store sales gain of 1.8% in November, but analysts were looking for a gain of 2.8%. The company’s CEO said that he expects December to offer a “competitive and promotional environment as consumers continue to focus on value.”

Macy’s same-store sales rose 4.8% last month, and total sales were up 5.3%. The consensus estimate for same-store sales was an increase of 4.1%.

Dillard’s posted a same-store sales jump of 3%, in-line with the average estimate.

Nordstrom reported November same-store sales rose 5.6%, compared with an average analyst estimate of 5%. Total sales rose nearly 12% in November.

Kohl’s reported that November same-store sales fell -6.2%, while analysts were expecting a 2% increase. The CEO called the results “disappointing,” and said that the company expects to benefit from customers seeking value during the remainder of the holiday shopping season.

Gap same-store sales fell by -5%, more than the analysts’ expectation of a -4.3% decline. The company’s CEO expects December to “to remain fiercely competitive and highly promotional.”

Ross posted a same-store sales increase of 5% in November, better than the 3.7% that analysts were expecting. The company said it expects a 3%-4% increase in December as well.

Penney’s same-store sales fell -2% in November, compared with a -1.6% decline expected by the analysts. Total sales also fell by nearly -6% in the month.

TJX reported same-store sales growth of 4%, in-line with the average estimate. The company’s CEO said that the store would have performed better but for the warmer weather which put off winter clothes buying.

Lululemon reported third-quarter earnings today, noting that same-store sales jumped 16% in the quarter. Shares are down more than -11% in the first half-hour of trading this morning. Here’s our coverage of the company’s earnings report.

Stage Stores reported same-store sales rose 2.3%, compared with an estimate for a flat month. Total sales rose 4.3%, and the company’s CEO said that the final week of the month was “very strong.”

Pier One released third quarter sales figures today, and same-store sales for the quarter ending November 27th rose 7%. The company said quarterly EPS would be $0.20-$0.21, compared with the consensus EPS estimate of $0.18. Same-store sales for the holiday weekend were up 10% over last year.

Paul Ausick

The unofficial closing bells put the DJIA up more than 17 points to 12,096.39 (0.14%), the NASDAQ rose nearly 29 points (1.09%) to 2,686.20, and the S&P 500 rose 0.48% or more than 6 points to 1,257.80.

There were several analyst upgrades and downgrades today, including Agilent Technologies, Inc. (NYSE: A) raised to ‘buy’ at BofA/ML. Other action included Salesforce.com (NYSE: CRM) reiterated at ‘neutral’ by Argus; Advance Auto Parts, Inc. (NYSE: AAP) cut to ‘hold’ at Argus; Lowe’s Companies Inc. (NYSE: LOW) target raised from $25 to $28 at Argus; Alimera Sciences Inc. (NASDAQ: ALIM) cut to ‘neutral’ with a $2 target at Credit Suisse.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Wal-Mart Stores, Inc. (NYSE: WMT) is down about -2.25%, at $57.57; Beazer USA Homes Inc. (NYSE: BZH) is down about -0.5%, at $2.21; Covidien plc (NYSE: COV) is up nearly 2.5%, at $48.44; Dick’s Sporting Goods, Inc. (NYSE: DKS) is up nearly 5.5%, at $41.73; TJX Companies, Inc. (NYSE: TJX) is up about 1% at $61.16; and Saks, Inc. (NYSE: SKS) is up 2.5%, at $10.46. For a more detailed look at today’s retail earnings, see our earlier story.

Several other standouts from today are as follows…

Moneygram International, Inc. (NYSE: MGI) is up about 616%, at $18.68. The company announced a 1-for-8 reverse stock split this morning, shrinking the number of outstanding shares from 1.3 billion to 162.5 million. The stock closed yesterday at $2.61, and posted a new 52-week high this morning of $19.61.

Pacific Ethanol Inc. (NASDAQ: PEIX) is up nearly 30%, at $1.31. There is no direct news from the company, but the price jump is very likely related to an announcement yesterday from Archer Daniels Midland Co. (NYSE: ADM) that it was building a new plant in Canada that would double its annual production of ethanol.

Netlist, Inc. (NASDAQ: NLST) is up more than 24%, at $2.92. The company has signed deals with both IBM Corp. (NYSE: IBM) and Hewlett-Packard Co. (NYSE: HPQ) under which Netlist’s cloud memory product undergo qualification testing for use with the two companies’ servers.

FriendFinder Networks, Inc. (NASDAQ: FFN) is down more than -20%, at $1.50, after posting a new 52-week low of $1.42. The company has been notified of a class-action lawsuit charging that it made false statements related the number of shares of stock subject to the 180-day lock-up period following the company’s IPO last May.

Meritor, Inc. (NYSE: MTOR) is down more than -17%, at $6.58. The company reported solid earnings today, but cut next year’s revenue guidance by about 10%.

Stay tuned for Wednesday. Richmond Federal Reserve Bank president Jeffrey Lacker and Boston Fed president Eric Rosengren are giving speeches tomorrow. Here’s a list of other noteworthy events (all times Eastern):

• 7:00 a.m. – Mortgage purchase applications
• 8:30 a.m. – Consumer price index
• 9:15 a.m. – Federal Reserve industrial production index
• 10:00 a.m. – Housing market index
• 10:30 a.m. – EIA weekly petroleum status report

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Paul Ausick

The world’s largest retailer managed to beat revenue expectations, but missed EPS estimates by a penny. Walmart posted revenue of $110.2 billion, up more than 8% from the same period a year ago and about 2% higher than estimates of $108.1 billion. The consensus EPS estimate called for $0.98, about 10% below EPS in the 2010 third quarter, but Walmart managed only $0.97. One bright spot for the company is that same-store sales for the quarter rose 1.3%, nearly double estimates of 0.7%.

Home Depot beat both EPS and revenue expectations, posting EPS of $0.60 on revenue of $17.3 billion. Consensus estimates called for EPS of $0.58 on revenue of $17.1 billion. The company also boosted its dividend, from an annual rate of $1/share to $1.16, up 16%. Home Depot also raised EPS guidance from $2.34 to $2.38. Home Depot’s report stands in stark contrast to competitor Lowe’s Companies Inc. (NYSE: LOW), which disappointed analysts on same-store sales and expenses related to store closures. Home Depot also reported quarterly same-store sales growth of 4.2%, far better than Lowe’s 0.7% rise.

High-end retailer Saks reported revenue for its third quarter of $692.3 million, lower than the consensus estimate of $695.1 million. EPS totaled $0.11, beating expectations of $0.09. Same store sales rose 5.8% for the quarter and 10.3% for the nine months. The company forecast same-store sales growth in the fourth quarter in the ‘mid-to-high single digit range.’ However gross margin is expected to decline by 0.5%. Gross margin in the third quarter rose by 1.6% year-over-year, and the decline is mostly due to expected promotional pricing.

TJX Companies missed on revenues, but did meet EPS estimates. The company reported this morning that EPS came in at $1.06, exactly on the consensus estimate, while revenue of $5.8 billion was below the estimate of $5.85 billion. Same-store sales were up 3% year-over-year. The company forecast full-year EPS of $3.94-$3.97, compared with the current analysts’ estimate of $3.97. The fourth-quarter EPS estimate was unchanged, at $1.19-$1.23. TJX raised its same-store sales guidance from 1%-2% to 2%-3%, but gave no guidance on gross margins, which came in at 28.1% in the third quarter.

Staples reported EPS of $0.47, as expected, but revenue of $6.6 billion failed to meet expectations of $6.7 billion. The company forecast fourth-quarter EPS of $0.39-$0.43, while analysts are expecting $0.43. Full-year adjusted EPS is forecast at $1.35-$1.39, compared with an estimate of $1.39. The full-year EPS forecast declined from a previous range of $1.39-$1.45. The company also tried to sweeten the news by boosting its full-year share buyback total from $300-$500 million to $600 million.

J.C. Penney posted an EPS loss of -$0.67 after the markets closed yesterday, but adjusted for certain items, EPS came in at $0.11, considerably better than the consensus call for an EPS loss of -$0.12. The company guided fourth quarter adjusted EPS at $1.05-$1.15, where analysts had expected $1.15. Same-store sales fell in the quarter, by -1.6%, and total sales fell year-over-year by -4.8%. The new CEO, Ron Johnson who came from Apple Inc. (NASDAQ: AAPL), started work on November 1st and promises a strategy review in time for the company’s investor meeting in January.

Urban Outfitters posted disappointing results after markets closed yesterday, even though EPS beat expectations by a penny. Same-store sales were off by -7%, and revenues of $610 million missed estimates of $614 million. Gross margins fell by nearly -6%.

A capsule review of these earnings reports points to a relatively flat fourth-quarter, with the exceptions of Home Depot and Saks. Home Depot has managed its operations better than has Lowe’s and its dividend boost is the second this year. Saks benefits from its position in the luxury retail sector, which is were the money and the growth are. For the others, the predicted 1%-2% holiday season sales boost means only that competition will be even more fierce, putting pressure on margins and profits.

Shares of Saks are up about 1.75%, at $10.38 in a 52-week range of $7.67-$12.97. Walmart shares are down about -2.3%, at $57.52, in a 52-week range of $48.31-$59.40. Home Depot is up about 1%, at $38.63, in a 52-week range of $28.13-$39.38. Urban Outfitters is down more than -3.25%, at $25.95, after posting a new 52-week low of $25.69 earlier this morning. Staples is down more than -4.25%, at $14.72, in a 52-week range of $11.94-$23.75.

Paul Ausick

A number of large retailers have announced holiday hiring plans, including Target Stores (NYSE: TGT), which plans to hire more than 92,000, Macy’s (NYSE: M), which expects to hire 78,000 for its Bloomingdale’s and Macy’s stores, and Kohl’s (NYSE: KSS), which expects to hire more than 40,000 temporary employees. Both Macy’s and Kohl’s say that this year’s planned hirings are about 5% more than last year’s totals. Target’s planned hiring is slightly higher than last year’s pace. JCPenney (NYSE: JCP) expects to hire about 35,000 additional temporary workers this year.

On the downside, Best Buy (NYSE: BBY) has said it expects to hire about 15,000 seasonal workers, about half its 2010 total. Sears Holdings (NASDAQ: SHLD) and The TJX Companies (NYSE: TJX) are expecting seasonal hiring to be flat with last year. Privately held Toys “R” Us has plans to hire about 40,000 seasonal employees, down from 45,000 brought on a year ago.

The holiday season shopping forecast has softened since the early part of this year, with national retail sales expected to rise about 3%, down from initial projections of a 5% hike. Retailers also expect to see less foot traffic, which is forecast to fall by -2.2%.

The sales forecast has led about a quarter of U.S. retailers to cut back on their holiday season hiring. Another two-thirds are expecting hiring levels to be comparable with last year, and only about 10% expect to hire more employees than last year.

Lack of enthusiasm for adding new employees is likely due to higher costs, including higher rent, energy, and wholesale costs. The conservative approach to hiring could also be a reflection of general economic uncertainty in the U.S. Headlines about falling stock markets cause fear among consumers about job security and cash flow. And if the federal government appears to be tilted toward adopting an austerity package that includes more job losses, consumers could keep a much firmer grip on their wallets.

The stock market is down about -1.5% in the first 15 minutes of trading this morning, with Sears bucking the trend. Sears shares are up about 4.75%, at $59.97, in a 52-week range of $51.14-$94.79. Target shares are up about 1.4%, at $48.45, in a 52-week range of $45.28-$60.97. Shares of Macy’s are down about -1.7%, at $24.94, in a 52-week range of $21.69-$30.62. The SPDR S&P Retail ETF (NYSE: XRT) is down about -0.8%, at $44.09, in a 52-week range of $41.73-$56.44.

Paul Ausick

Wal-Mart Stores Inc. (NYSE: WMT) announced last month that it was re-instituting its layaway plan after a five-year break. Sears Holdings Corp. (NASDAQ: SHLD) Sears and Kmart stores, Target Corp. (NYSE: TGT), Best Buy Co. Inc. (NYSE: BBY), and The TJX Companies, Inc. (NYSE: TJX) TJ Maxx stores also offer layaway plans.

For many large retailers inventories have piled up and margins are threatened because retailers fear that they will have to take larger-than-planned markdowns to move their holiday inventory. Layaway plans at Kmart and Toys ‘R’ Us have helped boost sales through layaway programs, while Target has had success with a branded credit card that offers shoppers a 5% discount on items purchased at the store. Lowe’s Companies, Inc. (NYSE: LOW) has a similar discount credit card at its Lowe’s home improvement stores.

Some super-discounters like Dollar General Corp. (NYSE: DG) and Dollar Tree, Inc. (NASDAQ: DLTR) don’t offer layaway plans, but Family Dollar Stores, Inc. (NYSE: FDO) does.

There are even on-line layaway shops that offer everything from diamonds to fabrics. Payments are made by debiting customers’ bank accounts or by check.

Continuing high unemployment and stagnant wages are probably the biggest reason for the re-appearance of layaway plans. Credit tightening has left many consumers without access to credit cards or they prefer to conserve cash by avoiding high credit card interest rates. Many layaway plans include a small one-time fee for the service, but that’s always lower than 10%+ credit card interest rates.

The re-emergence of layaway plans reflects the desire for retailers to make it as easy as possible for every consumer to make a purchase and the desire among consumers to manage their own cash flows. The programs will last as long as consumer credit is expensive and hard to get, then they’ll fade away until the next time.

Paul Ausick

Dollar stores are yet again in the news on reports from the New York Post that 99 Cents Only Stores (NYSE: NDN) is soon to get a $22.00 to $24.00 buyout offer from the private equity outfit Apollo Global Management, LLC (NYSE: APO) to top a prior buyout offer from Leonard Green & Partners at about $19.09 earlier in the year.  This may be the rumor mill at work, but there are reasons that this is the case.  The trick here is that the founding family controls about one-third of 99 Cents Only and our understanding is that a new deal might be complicated but would still probably boil down to the highest price within reason.

Dollar General Corporation (NYSE: DG) is a Stock to Own for the Next Decade!  It just saw a secondary offering where Kohlberg Kravis Roberts & Co. (NYSE: KKR) and private equity affiliates sold stock.  This has risen significantly since its re-IPO and each pullback has only proven to be a bargain-bin buying opportunity.  To prove a point, the stock hit a 52-week and all-time high of $38.33 on Friday and Warren Buffett’s new portfolio manager bought shares for Berkshire Hathaway Inc. (NYSE: BRK-A).

There has also been buyout interest in Family Dollar Stores Inc. (NYSE: FDO) and Dollar Tree, Inc. (NASDAQ: DLTR).  Family Dollar shares are up 4.5% at $54.38 and Dollar Tree is up only 0.3% at $75.46.

Big Lots Inc. (NYSE: BIG) is no dollar store, but it is very close and it has much of the same customer base.  It has also been under some perceived buyout interest as well.  Its shares are up almost 3% at $34.22 today against a 52-week range of $27.82 to $44.44.

Another close-out store is Tuesday Morning Corp. (NASDAQ: TUES) and it is often overlooked because it has a mere $172 million market capitalization rate.  At $4.03, its 52-week range is $3.38 to $5.93.

99 Cents only is trading up almost 10% at $20.50 today and it hit a new year high of $20.90 earlier.  Before 2005, this one was worth $30 and $35 at the peak and it pays no dividend.

Again, you do not have to like what the growth of discounters and the growth of dollar stores says about America.  Frankly, it is not very pleasant and it fits in with the theme of lower median income and higher poverty.  If Warren Buffett and private equity giants have so much interest in this sector, ask yourself if there is money to be made.

The TJX Companies, Inc. (NYSE TJX) may be too large now for private equity buyers to focus on with its $21.5 billion market valuation.  At $56.65, its stock is pennies away from the year high of $56.78 and that Barron’s $60+ target is looking much closer now.

Family Dollar is the only real dividend in the dollar sector with a 1.4% dividend yield.  TJX Companies is roughly the same dividend yield.  Wal-Mart offers the highest yield of most retailers, but again: Dollar Stores Are The Next Wal-Mart!

Here is the funny thing… Dollar stores are no longer cheap against the stock market.  They are expensive for the simplest of explanations: this is a secular trend and the growth rate looks to be continuous for this segment.

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JON C. OGG

Investors will be watching earnings reports from the following: Dillard’s Inc. (NYSE: DDS); LDK Solar Co. Ltd. (NYSE: LDK); Lowe’s Companies Inc. (NYSE: LOW); Analog Devices Inc. (NYSE: ADI); Dell Inc. (NASDAQ: DELL); Home Depot Inc. (NYSE: HD); TJX Companies Inc. (NYSE: TJX); Wal-Mart Stores Inc. (NYSE: WMT); Deere & Co. (NYSE: DE); DryShips Inc. (NASDAQ: DRYS); JDS Uniphase Corporation (NASDAQ: JDSU); NetApp Inc. (NASDAQ: NTAP); Staples Inc. (NASDAQ: SPLS); Target Corporation (NYSE: TGT); Brocade Communications Systems Inc. (NASDAQ: BRCD); GameStop Corporation (NYSE: GME); Gap Inc. (NYSE: GPS); Hewlett Packard Co. (NYSE: HPQ); Salesforce.com Inc. (NYSE: CRM); and Sears Holdings Corporation (NASDAQ: SHLD).

We did not include the consensus analyst price target this week because the data looks very skewed since it has not been fully updated to reflect the new estimates.

Monday, August 15

Dillard’s Inc. (NYSE: DDS) has Thomson Reuters estimates of $0.25 EPS and $1.42 billion in revenues; next quarter estimates are $0.31 EPS and $1.36 billion in revenues.  Keep in mind that the consensus group is too small for us to have much faith in estimates.   Shares are trading around $42.50 and the 52-week trading range is $19.26 to $61.08.

LDK Solar Co. Ltd. (NYSE: LDK) has Thomson Reuters estimates of $0.44 EPS and $716.37 million in revenues; next quarter estimates are $0.33 EPS and $740.77 million in revenues.  Shares are trading around $6.36 and the 52-week trading range is $4.97 to $15.10.  With the woes of solar and with the woes of Chinese accounting, LDK could be up huge or down huge.

Lowe’s Companies Inc. (NYSE: LOW) has Thomson Reuters estimates of $0.67 EPS and $14.78 billion in revenues; next quarter estimates are $0.35 EPS and $11.97 billion in revenues.  Shares are trading around $19.26 and the 52-week trading range is $18.97 to $27.45.  That 52-week low was hit on Friday.

Drug store forecasts are down 20 basis-points to 2.7% due to Walgreen Co. (NYSE: WAG).  Retail Metrics sees slightly higher expectations for Limited Brands, Inc. (NYSE: LTD), The TJX Companies, Inc. (NYSE: TJX), and even for Ross Stores Inc. (NASDAQ: ROST).  Gap Inc. (NYSE: GPS) comparable projections moved lower.  Expectations for Hot Topic moved up helping the teen group tick higher.

Retail Metrics did highlight some of the extreme gains expected, in order, as follows: Lululemon Athletica Inc. (NASDAQ: LULU) at +16.5%, PriceSmart Inc. (NASDAQ: PSMT) at +16.0%, Body Central Corp. (NASDAQ: BODY) at +11.8%, Buckle Inc. (NYSE: BKE) at 11.0%, Chico’s FAS Inc. (NYSE: CHS) at +10.4%, and Tiffany & Co. (NYSE: TIF) at +10.2%.  These expected gains are not helping many of these stocks on Tuesday, but double-digit same-store sales growth is likely going to be more than impressive in this environment.  We noted a drop expected in Gap Inc. (NYSE: GPS) and that is now expected to come in at -0.8% in same-store sales growth.

What is driving the gains despite a slowing economy? Traffic levels at stores have remained solid, higher-end retailers are faring better, 4th of July weekend was a good start for the month, hot weather favored mall traffic, gas prices are down, and more.  Higher unemployment, weaker consumer confidence, apparel price hikes, and weaker housing data are all potential drags per the Retail Metrics data.

Many retail same-store sales do sometimes come out much different than expected and the reasons can literally be from a discrepancy of one day’s reporting.  It is good to see that growth is still being seen somewhere, and more important is that the growth is expected to remain in place despite weak data being seen on most other fronts.

As a reminder, these figures will set the tone for the retail earnings reports that will kick off in the next two weeks as retailers have a one-month lag compared to most other companies in reporting earnings.

JON C. OGG

Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) Started as Neutral at Credit Suisse.
Banco Santander S.A. (NYSE: STD) Started as Neutral at Credit Suisse.
El Paso Corporation (NYSE: EP) Reiterated Buy as Bull of the Day at Zacks.
El Paso Electric Co. (NYSE: EE) Cut to Hold at Argus.
Finisar Corporation (NASDAQ: FNSR) Raised to Buy at Citigroup.
First Solar Inc. (NASDAQ: FSLR) Maintained Neutral at Credit Suisse.
Gold Fields Limited (NYSE: GFI) Reiterated Buy as Value at Zacks.
The Goldman Sachs Group Inc. (NYSE: GS) Reiterated Underperform as Bear of the Day at Zacks.
Harmonic Inc. (NASDAQ: HLIT) Cut to Neutral at BofA/ML.
HCA Inc. (NYSE: HCA) Cut to Neutral at Goldman Sachs.
Mentor Graphics Corporation (NASDAQ: MENT) Raised to Buy at BofA/ML.
Netflix Inc. (NASDAQ: NFLX) Reiterated Outperform and raised target to $310 at Credit Suisse; Reiterated Sell at Janney Capital; Maintained as Buy with $300 target at Canaccord Genuity.
PetSmart, Inc. (NASDAQ: PETM) Started as Outperform at RBC.
Ryanair Holdings plc (NASDAQ: RYAAY) Cut to Market Perform at Raymond James.
Sprint Nextel Corporation (NYSE: S) Raised to Outperform at RBC.
The TJX Companies, Inc. (NYSE: TJX) Started as Buy at BofA/ML.
ValueClick, Inc. (NASDAQ: VCLK) Raised to Overweight at Piper Jaffray.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG