Festive ups to start holiday season

Wednesday, 30 November 2011

It has been a festive start for the holiday season, as represented by the FashionUnited Top 100 Index, which climbed 27.05 points on Tuesday, up to 1272.96. Big movers were Tiffany&Co,  Jones Apparel and Talbots.

Teen apparel retailer American Eagle Outfitters is scheduled to announce its Q3 earnings results tomorrow, Wednesday, November 30. Forbes reminds that though American Eagle’s stock had gained nearly 8% after the business update on November 2 which disclosed a net sales increase of 11% and a comp sales increase of 5%, the stock has been on a decline since then. The apparent reason behind the decline is the confusion in the market which built up after American Eagle failed to revise its earnings guidance this quarter accordingly to a solid increase in its sales. “One of the probable reasons behind this is a decline in gross margins, which has in turn resulted in a cautious outlook in the market for American Eagle’s stock.”

One of Tuesday's stocks on the move was Jones Apparel (NYSE:JNY), up 2.2% to $10.42. In the past 52 weeks, shares of Jones Apparel have traded between a low of $8.00 and a high of $16.02 and are now at $10.42, which is 30% above that low price. Over the last five market days, the 200-day moving average (MA) has gone down 0.3% while the 50-day MA has declined 0.5%.


In Wall Street, lagging the market Tuesday were apparel stores shares, down on the day by about 0.9% as a group, led down by Talbots (TLB), trading lower by about 7.5% and Vera Bradley (VRA), trading lower by about 4.4%.

Finally, shares in Tiffany & Co fell by as much as 11 per cent after investors were worried by cautious comments from the luxury retailer on markets for its jewellery in Europe and the US. The company’s forecasts indicated that the pace of its sales and profit growth would slow in the current quarter, which includes the crucial holiday selling season. The Financial Times stressed how after an initial plunge, Tiffany’s shares recovered some ground and were trading down 9 per cent at $66.97 by midday in New York.

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