Liz Claiborne drops while Carter´s gains

Better than expected retail sales in USA in February

lifted the mood among big players in the fashion and apparel industry. Gap was the exception, selling less than one month ago. Good news for Carter´s, yet not so positive for Liz Claiborne.

In USA, February retail sales, due to be reported on Thursday, likely rose 4.8%, above the year-earlier level of a 4% gain and the best increase since September, according to a survey of analysts by Thomson Reuters, which said the estimates point to “robust” demand because a 3% reading generally signals “health among U.S. consumers.”

Within the fashion peers, Gap was the sound exception, reporting bad monthly sales in February, as oppose to Chico’s FAS Inc. that has said its February sales got off to a solid start and were running up 7%. In the same vein, TJX Cos. – owner of T.J. Maxx- raised its February sales forecast to a 7% gain from its previous projection of a low-single-digit rate. Victoria’s Secret parent Limited Brands Inc. also raised its February sales outlook to a range in the mid-to-high-single digit from a previous guidance of sales rising in the low-single digit, reported MarketWatch.

J.C. Penney Co. dropped by 4% after reporting quarterly results earlier this week and somehow affected by its sales in February, said to  sales were below its expectations as it transitions to a new pricing and promotional strategy.

Meanwhile, sales at Juicy Couture, which generates 36 percent of total sales for Liz Claiborne Group, fell 15.4 percent over the holiday period. However, other brands within the group fared better: sales were up 23.2 percent at Lucky Brand, its second-largest label, and rose 73.4 percent at kate spade.

Total sales at Liz Claiborne therefore fell 2.6 percent to $447.1 million (Rs 2,200 crores) during the quarter that ended on December 31, coming in well below Wall Street estimates of $477.50 million (Rs 2,347 crores), reported Reuters.  The company reported fourth-quarter net income of $229.2 million (Rs 1,127 crores), or $1.91 (Rs 94) a share, including profits from the sale of its namesake brand to J.C. Penney Co Inc (JCP.N) last year. That compares with a year-earlier loss of $30.1 million (Rs 147 crores), or 28 cents a share. Chief Executive William McComb told analysts that Juicy's comparable sales would be flat in the first half of the year, then rise 10 percent in the second half. In contrast, comparable sales at Lucky Brand surged 29 percent in January and rose 30 percent at kate spade, with large gains continuing at both brands this month.

Including only continuing operations and excluding special items, Claiborne's profit fell to 10 cents (Rs 4.9) per share from 14 cents (Rs 7), in line with Wall Street forecasts, according to Thomson Reuters I/B/E/S. The company reiterated its early January forecast for 2012 earnings of between $125 million (Rs 615 crores) and $140 million (Rs 689 crores) before interest, taxes, depreciation and amortization.

Finally, Carter´s reported quarterly figures on Wednesday. Consolidated net sales increased $111.4 million (Rs 546 crores), or 22.5%, to $606.6 million (Rs 298 crores), while net domestic sales of the Company’s Carter’s brands increased $54.5 million (Rs 265 crores), or 14.1%, to $442.4 million (Rs 2,175 crores). Net domestic sales of the Company’s OshKosh B’gosh brand increased $10.6 million (Rs 49 crores), or 10.6%, to $110.0 million (Rs 541 crores).