Retail shares were up across segments on Wednesday as the Commerce Department reported an
for the second straight month.
The S&P Retail Index jumped 1% to 311.35 in afternoon trading -- and amid the good news there were some surprising winners.
Yes, today and probably only today, Abercrombie & Fitch is considered a winner. The struggling teen-apparel retailer saw a European firm actually boost its stake despite dismal fundamentals in recent months,
Shares of the company gained 4% to $36.10 in afternoon trading.
As of June 22, Scotland's Edinburgh Partners owns 4,422,927 shares, or a 5.04% stake in the company. At the end of the first quarter Edinburgh held 4,213,798 shares giving it 5% ownership, Barron's wrote.
Goes to show at least someone thinks Abercrombie & Fitch is still in fashion.
PetSmart (PETM) :
The pet supply retailer said on Tuesday that it will raise its dividend to 10 cents from 3 cents starting in the second quarter. The company also plans to purchase up to $350 million of its stock over the next 2 and a half years.
Shares of the company grew 4% to $20.81.
Stifel Nicolaus analyst David Schick said by slowing down square-footage growth the company is able to minimize cannibalization and give breathing room to existing assets, reduce its operating costs and let management spend more time trying to improve the business.
PetSmart also said it aims to add about 40 stores annually in the near-future.
On Tuesday the office-supply retailer said it will receive a
from BC Partners through a preferred stock purchase.
The company continued to be lauded by investors on Wednesday, with shares soaring 9% to $4.24.
This investment will give the private equity fund about a 20% stake in Office Depot.
But even on the best days there are still some losers.
Supervalu (SVU) :
The grocery chain
issued a first-quarter warning
on Wednesday, saying earnings will be significantly below expectations. The news sent shares tumbling 13% to $13.61 in afternoon trading.
Despite price cuts and higher level of promotions -- and the intuitive sense that it would perform well in a slumping economy; its name, after all, combines the words "super" and "value" -- cutbacks by consumers are taking a toll on the grocery chain. Analysts forecast a profit of 65 cents a share for the quarter ended June 20.
Sure, Rite Aid
, but it said it actually expects a greater deficit for the year due to refinancing expenses.
Investors however, only paid attention to the good news, as shares were about flat in afternoon trading.
The company recorded a loss of $98.4 million during the quarter, or 11 cents a share, compared with a loss of $156.6 million, or 20 cents, in the year-ago period. Analysts expected a loss of 13 cents a share. Its revenue slipped 1% to $6.53 billion, hurt by the closure of 86 stores.
Rite Aid announced that its refinancing is partly complete, but because of greater interest expenses, it will post a larger loss in fiscal 2010.
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