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Abercrombie Tanks, Hewlett and Sears Tumble; Gap and Aeropostale on Deck

Dan Berman
Hot Stock Minute
Abercrombie Tanks, Hewlett and Sears Tumble; Gap and Aeropostale on Deck

Abercrombie & Fitch (ANF) is tanking 17% this morning on its earnings. The retailer says it made 14-cents a share, just half of what was expected. Last year earnings were 20-cents a share. Revenue was also about 5% below expectations at $945-million dollars. So far the company is not adjusting its full year guidance, but says it expects same store sales to keep dropping. Even before this morning, shares of Abercrombie were down in 2013, by about 1.5%. Prior to this morning's losses they were up 28% over the past year, largely on a spike that occurred during last year's holiday shopping season.

Sears Holdings (SHLD) is down more than 8% after reporting a quarterly loss early this morning. Here are the numbers: losses of $1.46 per share when estimates were for a loss only of $1.10. Revenue was also lower than estimates at $8.87 billion dollars. There was a silver lining in the report: online sales at both Sears and K-Mart stores up 20% over last year. Still, overall sales are down well over 5%. It has been reflected in the stock with shares prices down 23% over the past year.

Hewlett-Packard (HPQ) has been down 8% on its earnings report. Revenue dropped 8% for the quarter, with weakness extending beyond PCs and into other businesses including servers. The company also lowered expectations moving forward, saying don't expect any sales growth next year. In this case, the numbers pretty much matched expectations with adjusted earnings of 86-cents a share on $27.23-billion in revenue. Even with the losses this morning, shares have made tremendous gains this year, up 69% as of yesterday's close.

The Gap (GPS) is one of several other clothing retailers reporting today. Gap shares are up 36% year-to-date, and hit their highest level since 2000 at the start of the month. The company is expected to report earnings of 64-cents a share up from 49-cents a year ago on sales that have climbed 7% to more than $3.8 billion. By the way, also reporting after the bell is teen retailer Aeropostale (ARO) which is expected to post losses of 24-cents a share on revenue that's fallen 7% to $453-million. Direct competitor American Eagle Outiftters (AEO) released its report yesterday, disappointing investors with profits of just 10-cents a share compared to estimates of 29-cents on revenue that was down sharply.