3 Stocks Pushing The Retail Industry Lower

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

The Retail industry as a whole closed the day up 0.2% versus the S&P 500, which was down 0.9%. Laggards within the Retail industry included Liberty Interactive ( LINTB), down 2.5%, Alon Blue Square Israel ( BSI), down 3.1%, China Nepstar Chain Drugstore ( NPD), down 1.8%, dELiA*s ( DLIA), down 6.9% and U S Auto Parts Network ( PRTS), down 2.0%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

dELiA*s ( DLIA) is one of the companies that pushed the Retail industry lower today. dELiA*s was down $0.04 (6.9%) to $0.54 on average volume. Throughout the day, 671,437 shares of dELiA*s exchanged hands as compared to its average daily volume of 458,600 shares. The stock ranged in price between $0.54-$0.59 after having opened the day at $0.59 as compared to the previous trading day's close of $0.58.

dELiA*s, Inc. operates as a multi-channel retail company, primarily marketing to teenage girls in the United States. The company sells various product categories to consumers through its Website, direct mail catalogs, and retail stores. dELiA*s has a market cap of $42.3 million and is part of the services sector. Shares are down 32.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates dELiA*s as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on DLIA go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 26.0% when compared to the same quarter one year ago, falling from -$9.22 million to -$11.61 million.
  • The debt-to-equity ratio of 1.25 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, DLIA has a quick ratio of 0.57, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet & Catalog Retail industry and the overall market, DELIAS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for DELIAS INC is currently lower than what is desirable, coming in at 27.59%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -44.78% is significantly below that of the industry average.
  • Net operating cash flow has declined marginally to -$14.91 million or 4.19% when compared to the same quarter last year. Despite a decrease in cash flow DELIAS INC is still fairing well by exceeding its industry average cash flow growth rate of -16.53%.

You can view the full analysis from the report here: dELiA*s Ratings Report

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At the close, China Nepstar Chain Drugstore ( NPD) was down $0.04 (1.8%) to $2.23 on light volume. Throughout the day, 16,121 shares of China Nepstar Chain Drugstore exchanged hands as compared to its average daily volume of 48,000 shares. The stock ranged in price between $2.21-$2.26 after having opened the day at $2.26 as compared to the previous trading day's close of $2.27.

China Nepstar Chain Drugstore Ltd., through its subsidiaries, owns and operates a retail drugstore chain in China. China Nepstar Chain Drugstore has a market cap of $223.1 million and is part of the services sector. Shares are up 23.4% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate China Nepstar Chain Drugstore a buy, 1 analyst rates it a sell, and none rate it a hold.

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TheStreet Ratings rates China Nepstar Chain Drugstore as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on NPD go as follows:

  • The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, NPD's share price has jumped by 51.33%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • NPD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
  • CHINA NEPSTAR CHAIN DRUG-ADS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CHINA NEPSTAR CHAIN DRUG-ADS reported lower earnings of $0.02 versus $0.14 in the prior year. For the next year, the market is expecting a contraction of 50.0% in earnings ($0.01 versus $0.02).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Food & Staples Retailing industry. The net income has significantly decreased by 355.5% when compared to the same quarter one year ago, falling from $1.15 million to -$2.93 million.

You can view the full analysis from the report here: China Nepstar Chain Drugstore Ratings Report

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Liberty Interactive ( LINTB) was another company that pushed the Retail industry lower today. Liberty Interactive was down $0.71 (2.5%) to $27.52 on heavy volume. Throughout the day, 2,500 shares of Liberty Interactive exchanged hands as compared to its average daily volume of 400 shares. The stock ranged in price between $27.52-$27.57 after having opened the day at $27.57 as compared to the previous trading day's close of $28.23.

Liberty Interactive has a market cap of $815.3 million and is part of the services sector. Shares are down 4.0% year-to-date as of the close of trading on Monday.

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Highlights from TheStreet Ratings analysis on LINTB go as follows:

You can view the full analysis from the report here: Liberty Interactive Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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