Sector Snap: Apparel Retailers Rise On 2Q Reports

NEW YORK (AP) — A host of apparel retailers reported second-quarter earnings boosted by cost cutting and lower inventory on Thursday and Friday, and shares rose across the sector amid a general market rally.

Gap Inc. on Thursday said second-quarter earnings rose slightly from a year earlier, beating Wall Street expectations despite a 7 percent decline in sales, as the apparel chain cut costs. Shares rose 57 cents, or 3 percent, to $19.42 during afternoon trading. The stock has traded between $9.41 and $20.80 over the past year.

"Defense — cost cutting, expense management and inventory control — has been the key this quarter to preserving margins and profits," Stifel Nicolaus analyst Richard Jaffe wrote in a note to investors. "We anticipate that this trend will slow as retailers' defensive efforts are anniversaried in the second half of the year."

Women's apparel retailer Ann Taylor Stores Corp. on Friday posted a second-quarter loss as sales fell and the company recorded restructuring costs, but results beat expectations. Sales fell 21 percent to $470.2 million, short of expectations. Shares rose 55 cents, or 4.3 percent, to $13.37. The stock has traded between $2.41 and $27.55 over the past year.