Brown-Forman Cuts 2009 View, Shares Drop Wine and liquor maker Brown-Forman ( BFB) reported better-than-expected fiscal third-quarter profit Tuesday, but its shares retreated after the company cut its 2009 profit view. The Louisville, Ky.-based company said its third-quarter net income was $123.4 million, or 81 cents per share, up from $116 million, or 75 cents per share, in the year-ago period. Net sales fell around 11% to $784.1 million, hampered by the strengthening U.S. dollar, which hurts margins on overseas sales.
On average, Wall Street analysts expected net income of 77 cents per share. Brown-Forman, which produces famous liquor brands Jack Daniels and Southern Comfort, lowered its full-year 2009 EPS estimates to $2.70 to $2.90, down from a previous forecast of $3 to $3.20. This news sent the company's shares down more than 8% in early trading Tuesday. We removed shares of Brown-Forman from our "Recommended" list on Aug. 28, when the shares traded at $77.02. The company has a 2.8% dividend yield, based on last night's closing stock price of $41.06. The $39 levels seems to be a key area the stock needs to hold short term, but if that fails, then the $30 to $31 range is likely. If the shares can rebound, we see overhead resistance in the $45 to $48 price range. Brown-Forman is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars. Kroger Shares Rise on Fourth-Quarter Earnings Beat Kroger ( KR), the largest supermarket chain in America, said Tuesday that its fourth-quarter profit rose 8% from the previous year.
The company reported fiscal fourth-quarter net income of $349.2 million, or 53 cents per share, up from $322.9 million, or 48 cents per share, in the year-ago period. Total sales revenue was mostly flat, edging slightly to $17.26 billion from $17.23 billion. On average, Wall Street analysts expected fourth-quarter profit of 51 cents per share on revenue of $18.3 billion. Kroger said that same-store sales -- considered a key indicator of a retailer's health -- rose 3.8% from the previous year. Same-store sales measure the performance of stores open at least five fiscal quarters. The company also said that 27% of its grocery revenue originated from its own Kroger-branded products, which are normally priced lower than comparable name-brand items. Kroger said it expects same-store sales to rise between 3% and 4% for 2009, and sees full-year 2009 profit of $2 to $2.05 per share. Shares of Kroger were up $1.50, or 7.7%, in early trading Tuesday. We have avoided shares of Kroger since our early June coverage began, when the stock was trading at $27.30. The company has a 1.85% dividend yield, based on last night's closing stock price of $19.46. The shares have technical support in the $18 to $20 range. If those levels fail to hold, then the $13 to $15 support area could possibly be the next stop. If the shares can continue today's momentum, we see overhead resistance around the $24 price mark. We would remain on the sidelines. Kroger is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars.
Citigroup Shares Rally Above $1 on CEO Comments In an increasingly rare piece of good news coming out of the banking industry, Citigroup ( C) CEO Vikram Pandit said in an internal memo Monday that the company operated at a profit for the first two months of 2009. Pandit said that the embattled banking company had an operating profit, before taxes and special items, of $8.3 billion for the first two months of 2009. Pandit declined to say, however, how much credit losses and other one-time items would offset its earnings. Citigroup shares rose 25 cents, or about 25%, in early trading Tuesday. The company's stock has lost more than 93% of its value in the past year, amid the worst banking crisis in U.S. history. Tough to get too excited about a $1 stock as the market seems to be so far today. Remember, Mr. Pandit thought the stock was "good" when he bought 850,000 shares of stock in the $8.92 to $15.15 per share price range, back in November. Rather than bottom-fish here, we would look elsewhere for better investment opportunities. Citigroup is not recommended at this time, holding a Dividend.com Rating of 2.3 out of 5 stars. Dick's Sporting Goods Posts $104 Million Fourth-Quarter Loss on Acquisition Charges Dick's Sporting Goods ( DKS) reported a fiscal fourth quarter loss on Tuesday, its results hampered by charges related to its February 2007 acquisition of Golf Galaxy. Dick's reported a fourth-quarter loss of $104.4 million, or 93 cents per share, compared with a profit of $73.2 million, or 62 cents per share, in the year-ago period. These results included an impairment charge of $1.44 per share. Excluding this charge and acquisition write-down costs, the company would have seen a profit of $63.4 million, or 55 cents per share.
Quarterly sales fell a little less than 1% in the period to $1.21 billion. On average, Wall Street analysts expected earnings of 53 cents per share on revenue of $1.23 billion. Same-store sales at Dick's stores, considered a key indicator of a retailer's health, fell 8.6% from the year-ago period. For the full year 2008, Dick's posted a loss of $35.1 million, or 31 cents per share, compared with a profit of $155 million, or $1.33 per share, in 2007. Excluding one-time items, the company would have seen a profit of $138.9 million, or $1.19 per share. Full-year jumped rose 6% to $4.13 billion from $3.89 billion, aided by new store openings and the company's November 2007 acquisition of Chick's Sporting Goods. On average, Wall Street analysts were expecting full-year earnings of $1.15 per share on revenue of $4.16 billion, excluding special items. Dick's offered lower-than-expected fiscal first-quarter guidance, forecasting earnings of 6 cents per share. Excluding one-time items, the company said it expects adjusted profit of 3 cents to 8 cents per share. On average, Wall Street analysts expected a first-quarter profit of 10 cents per share, excluding special items. The company is down near some near-term technical support of $9. If that fails to hold, the company may need to test the $5.50 level, not seen since its late 2002 IPO. If the shares can continue today's rebound, we see the $15 to $16 as initial overhead resistance. We would prefer to look at shares of Nike ( NKE) for investment exposure in the sporting goods part of the market. We do not have Nike on our "Recommended" list at the moment, but it is a name we like if the markets can stabilize.
Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system.