Retailers Mostly Mum as Investors Worry

Tuesday's rebound aside, investors are still bracing for bad news in the wake of last week's terrorist attacks. Yet many retail and consumer companies have kept mum, which has shareholders on edge.

Shares in the retail sector dropped sharply Monday; despite Tuesday's gains, the S&P retail index was 3.6% below its Friday close. Companies such as online travel outfits priceline.com (PCLN), Expedia.com (EXPE) and Travelocity.com (TVLY) have seen their shares sink as much as 50%. Yet none has issued press releases communicating with investors. (A priceline representative declined to comment, while spokespeople at Expedia and Travelocity didn't immediately return phone calls.)

Of course, even companies that made largely positive comments have seen their shares slide. High-end accessories retailer Coach (COH), for instance, has said it expects to meet earnings estimates for the current quarter. The company, which had a store in the basement mall of the World Trade Center, said it expects first-quarter earnings of 27 to 28 cents a share on revenue of at least $150 million, in line with previous guidance. Still, its shares dropped 24%.

"While it's obviously premature to gauge the impact of this tragedy on the American psyche, consumer spending in general, or on Coach's business in particular, we remain confident that our operating strategies, business processes and ability to adapt to changing conditions will enable us to continue to deliver superior financial results," Lew Frankfort, the company's chairman and chief executive, said in a statement. At the same time, the company announced a stock buyback plan.

"Somber events may prevent customers from engaging in frivolous purchases -- though we don't know for how long," wrote Faye Landes, an analyst at Sanford Bernstein, in a report published Tuesday. "Coach will likely be affected by this consumer sentiment and is of course exposed in the event of a meaningful downturn in consumer spending." (Landes has an outperform rating on Coach, and her firm does not do underwriting.)

Another company that was seeing heavy selling was drugstore retailer Duane Reade (DRD), which has most of its shops in New York City, and had one in the World Trade Center. It put out a statement before the open of trading Monday, saying its earnings would be lower than the previous guidance of 43 cents to 44 cents per share in the current quarter.

Shares recently traded at $31.20, off about 12% since trading resumed Monday.

One exception was eBay (EBAY), which said Tuesday that third-quarter earnings should meet current estimates.

In a brief statement, the online auction house said it is comfortable with current Thomson Financial/First Call estimates of 11 cents a share in earnings and $185 million in revenue for the third quarter. Shares were up on the news, trading lately at $51.55, up $2.15, or 4.4%.

But obviously, happy surprises have been few and far between lately.

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