What Happened in the Stock Market Today
Stocks started out Tuesday in the green, but drifted lower during the day. The Dow Jones Industrial Average (DJINDICES: ^DJI) closed down over 100 points, and the S&P 500 (SNPINDEX: ^GSPC) and the NYSE Composite also lost ground.
Today's stock market
Data source: Yahoo! Finance.
Telecom stocks led the market retreat, with the iShares US Telecommunications ETF (NYSEMKT: IYZ) off 2.2%. Investors did some shopping for bargains after the recent sell-off in the tech sector, and the Vanguard Information Technology ETF (NYSEMKT: VGT) managed a gain of 0.2%.
Shares of G-III Apparel Group (NASDAQ: GIII) continued a recent winning streak after the company reported earnings, but those of Ascena Retail Group (NASDAQ: ASNA) went the opposite direction.
Image source: Getty Images.
G-III grows profits, sees strong holiday sales
G-III Apparel Group stock soared almost 14% after the company beat profit forecasts and raised guidance for the full year. The manufacturer and distributor of clothing -- which includes owned brands like Donna Koran and DKNY and licensed brands such as Calvin Klein and Tommy Hilfiger -- reported a sales increase of 16% to $1.02 billion. Income also jumped 16% to $81.6 million, or $1.65 per diluted share. Excluding costs from acquiring Donna Koran last year, non-GAAP EPS was $1.67.
The company said it is seeing excellent wholesale net sales "across all major brands," and increased its full-year forecast for non-GAAP EPS from a range of $1.28 to $1.38 to a range of $1.42 to $1.52.
"We have executed our strategy with well-known brands and compelling product in an environment that remains challenging across our industry," said Chairman and CEO Morris Goldfarb in the press release. "Our products are selling well as we head into the holiday season and we expect to close the year with improved results and sustained momentum."
Shares of G-III slumped from mid-2015 to this summer, but have recently seen a resurgence, partly due to its purchase of Donna Koran. The company's growth is notable in an environment of shifting consumer buying habits and fashion trends.
Ascena stumbles on sales decline
Ascena Retail Group reported quarterly results that the company called "disappointing," and shares plummeted nearly 20%. The specialty apparel retailer selling under brands such as Ann Taylor, LOFT, Lane Bryant, and Dressbarn saw sales decline 5.3% to $1.6 billion. Non-GAAP earnings per share came in at $0.11, compared with $0.18 in the period a year ago.
Comparable sales dropped for all of Ascena's brands. Comps for Ann Taylor were down 6%, as were those of LOFT. Lane Bryant had a comparable-sales decline of 5% and Dressbarn fell 10%. Average selling price fell by mid-single digits, but was offset some by double-digit transaction growth in the company's direct channel. Ascena lowered earnings guidance for the year from a non-GAAP profit of $0.10 to $0.15 per share to a $0.07-$.012 loss.
CEO David Jaffe said in the press release, "Our first quarter adjusted earnings per share of 11 cents was in the middle of our guidance range, but represented a disappointing quarter. We were unable to capitalize on the improving macro traffic environment due to fashion missteps that we cannot afford in today's environment."
Ascena is struggling with brands that are just not resonating with consumers. With a stock that's given up 90% of its value since 2013 but had recovered a little ground in hopes for the holidays, the market seems to have to no further patience for "fashion missteps."
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Jim Crumly has no position in any of the stocks mentioned. The Motley Fool owns shares of G-III Apparel Group. The Motley Fool has a disclosure policy.