Avoid Retail Stocks
NEW YORK ( TheStreet) -- Retail stocks are mixed following second-quarter earnings reports. One of the biggest decliners is Citi Trends ( CTRN) after it reported a surprise second-quarter loss. Shares of the apparel retailer are tumbling 11.5% to $24.05 in afternoon trading. During the quarter, Citi Trends lost 4 cents a share, compared with break-even results in the year-ago period. Analysts were forecasting a profit of 7 cents a share.
Looking ahead, Citi Trends cut its full-year forecast to $1.60 to $1.70 a share, from prior guidance of $1.75 to $1.80. It also lowered its same-store sales outlook to be flat with last year to up 2%. It previously expected a gain between 4% and 5%. American Apparel ( APP), meanwhile, is plunging 19.3% to 83 cents, a day after the company warned it may not have enough liquidity to make it through the remainder of the year. The retailer said it may not be able to repay a loan due in September and is currently in talks with creditors. It also delayed reporting its second-quarter earnings, but said it expects a loss between $5 million and $7 million on sales of $132 million to $134 million. Netflix ( NFLX) stock is falling following a downgrade to underperform by Morgan Keegan analyst. Analyst Justin Patterson is particularly concerned about content costs related to Netflix's new deal with EPIX, which he estimates could cost Netflix about $1.10 a subscriber per month. Growing competition from Hulu, Comcast and Coinstar ( CSTR), among others, is also raising a red flag.
Shares of Netflix are off 3.7% to $128.08 in afternoon trading. BJ's Wholesale ( BJ) is taking a hit after it slashed its full-year outlook. The discounter now expects to earn between $2.40 and $2.50 a share, from its guidance of $2.58 to $2.68 a share. Analysts are calling for a profit of $2.67 a share. In its second quarter BJ's earned $35.8 million, or 67 cents a share, from $35.1 million, or 64 cents, last year. Revenue rose 9% to $2.79 billion from $2.57 billion last year. Shares of BJ's are sinking 4.1% to $41.54 in afternoon trading. Elsewhere in the discount space, Target ( TGT) is rising 2.4% to $51.88, following posting second-quarter earnings that fell in-line with expectations, despite disappointing sales. The discounter has been able to control costs, which helped it earn $679 million, or 92 cents a share, compared with $594 million, or 79 cents, in the year-ago period. Target's total revenue, which includes credit card revenue, increased 3.1% to $15.32 billion. It's retail sales jumped 3.8% to $15.13 billion, while same-store sales inched up 1.7%, below the company's forecast for an increase of 2% to 4%. Chico's ( CHS) is pulling up stocks in the women's apparel sector, after it reported its second-quarter earnings more than doubled. Shares of Chico's are advancing 7.6% to $9.05, leading up AnnTaylor Stores ( ANN), which is jumping 7.3% to $16.08, Talbots ( TLB), which is growing 8.1% to $10.54, and New York & Co. ( NWY), which is rising 4.3% to $2.18. -- Reported by Jeanine Poggi in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.