US stocks advanced Tuesday amid better-than-estimated
earnings at companies led by Coach Inc. The S&P 500 increased 0.4 per cent to 1,372. However, “Stocks have room to move higher,” said David Kelly, chief market strategist at JPMorgan Funds in New York.
“Earnings are healthy. The bar has been lowered so far that you can just walk over it. Housing is on the mend. A sign of a market top is when people are exuberant. There’s no exuberance as witnessed yesterday.”
In the spotlight, Coach, Inc. (COH), which shares slumped 3.1% or $2.38 (Rs 124) to $72.74 (Rs 3,818) after the high-end leather bags marketer reported third quarter sales grew 11% to $1.11 billion (Rs 5,826 crores) from $951 million (Rs 5,018 crores) in the prior year. Net income in the quarter soared 21% to $225 million (Rs 1,181 crores) or 77 cents (Rs 40) per share compared to $186 million (Rs 976 crores) or 62 cents (Rs 32) per share in the year ago. Sales in China soared 60% and direct-to-consumer sales increased 18% to $984 million (Rs 5,165 crores).
In London Stock Exchange, AB Foods saw group revenue up 11% to £5.76bn ($9.2 billion or Rs 48296 crores). The food and retail conglomerate said it expected "substantial" profit growth for the full year as Primark and its sugar business continued to perform well, reported ‘The Telegraph’. Revenue at Primark during the first six months jumped 15% to £1.6bn ($2.5 billion or Rs 13,124 crores), helped by further store openings. Sales in the UK edged up 1% on a like-for-like basis as Primark's fashion ranges continued to gain traction with shoppers on a budget, while sales abroad were 2% higher.
Also Next was big news on Tuesday, yet for different reasons as it faces a tougher road ahead, according to JP Morgan: “We believe Next is likely to experience increasing pressure both on top line and margin in the next few years as online competition grows and the apparel market shifts increasingly to a free delivery model.”