Thursday's Small-Cap Winners & Losers

Small-cap stocks trailed the major indices Thursday, as the Russell 2000 Index was down 4.7% to 765.36, and the S&P SmallCap 600 Index lost less than 1% to 396.71.

Retailers reporting earnings played a large role in today's losses. Case in point was Charlotte, N.C.-based Cato (CTR Quote). Fiscal third-quarter income was cut in half year over year to $2.9 million, or 9 cents a share, but beat analyst estimates by a penny a share. Same-store sales, or sales from stores open a year or more, were down 5% from 2006, and the gross margin rate decreased to 31% from 32% last year. Shares of the women's wear retailer plummeted 25% to $14.70.

Also smarting was Stein Mart (SMRT Quote), shares of which dropped 11% to $5.39 as the Jacksonville, Fla.-based fashion retailer announced a third-quarter loss of $2.7 million, or 6 cents a share, compared to a gain of $237,000, or a penny a share, in 2006. Analysts were projecting a loss of 7 cents a share. Comparable-store sales dropped 6.3% from last year. Stein Mart also guided for a sequential same-store sales decrease of 10% for the fourth quarter.

Both Cato and Stein Mart noted that their most recent quarters were 13 weeks long, one week shorter than the corresponding quarter last year.

Slipping along with the other retailers, Hudson, Ohio's Jo-Ann Stores (JAS Quote) fell 14% to $17.71. Jo-Ann reported fiscal 2008 third-quarter profit of $8 million, or 32 cents a share, vs. $100,000, or zero cents a share, a year ago to beat analyst estimates by 4 cents. Same-store sales increased 2.4%, compared with a decrease of 5.4% in the year-ago quarter. Guidance for fiscal 2008 was conservative, however, pointing to uncertainty in consumer spending and projecting EPS between 55 cents and 65 cents, down from 60 cents to 70 cents.