The Running of the Retailers

It’s no secret that I’m keeping a close eye on retail stocks. After all, with the consumer being one of the bright spots of the American economy, it pays to invest in stocks that are benefiting from this trend.

And today, we had a number of retail powerhouses report earnings. Let’s take a look and see which retailers made out like bandits—and which were left behind in the dust. Be sure to take a moment to click on each company’s ticker symbol to see how it is ranked in my Portfolio Grader tool.

First up, Advanced Auto Parts Inc. (AAP) was a bit of a disappointment for the auto parts retailers industry. The company posted 3% sales growth and 22% earnings growth, but the company’s adjusted earnings of $1.79 per share did miss the consensus estimate by 1%. This, coupled with a conservative second-quarter guidance, sent the stock down 15% today.

Children’s Place Retail Stores Inc. (PLCE) did decidedly better today; shares climbed 5% after the retailer posted 2% sales growth and a 9% earnings surprise. Nonetheless, the company’s bottom line did dip 19% due to higher product costs.

Single-price point retailer Dollar Tree Inc. (DLTR) posted record sales and earnings for the first quarter, with sales growing 11% and earnings jumping 16%. The company also posted a 2% earnings surprise, but a weaker second-quarter guidance spooked investors and the stock declined 5%.

GameStop Corp. (GME) sustained a 10% drop in net income as well as a 12% dip in global sales in the first quarter. Additionally, the company missed the consensus sales estimate by 2%. That, along with the fact that its second-quarter earnings guidance fell far below the Street view, sent shares of GME down 9% today.

Ross Stores Inc. (ROST), on the other hand, announced strong operating results today. The company’s bottom line jumped 21% while total sales climbed 14%. Additionally, the company repurchased two million of its shares ($111 million) in the first quarter and plans on buying a total of $450 million of its stock in 2012.

Sears Holdings Corp. (SHLD) managed to narrow its loss in the first quarter. The company posted a loss of $0.31 per share compared to a loss of $1.34 per share in the same quarter last year. This also came in above the -$0.67 per share street view. The stock climbed 4% today.

Wal-Mart Stores Inc. (WMT) also posted better than-expected earnings in the first quarter; the company’s bottom line advanced 10% while its top line climbed 9%. Wal-Mart posted a 5% earnings surprise, so the stock also closed up 5% today.

And, the retail fun isn’t over yet.  In a few hours, we’ll get first-quarter earnings from: Aeropostle Inc. (ARO), Gap Inc. (GPS), Pacific Sunwear of California Inc. (PSUM) and  Shoe Carnival Inc. (SCVL). I’ll keep an eye out for any shocking earnings surprises or upsets.

Until then,

Louis Navellier

Louis Navellier

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