Consumer Sector Update for 08/17/2017: LB, SSI, CATO

Top Consumer Stocks

WMT -1.9%

MCD -0.2%

DIS -0.4%

CVS -0.2%

KO -0.4%

Consumer stocks continued to trade lower this afternoon, with shares of consumer staple companies in the S&P 500 ( XLP ) dropping 0.6% while shares of consumer discretionary firms in the S&P 500 ( XLY ) were posting a 1.1% decline in recent trade. In company news, L Brands ( LB ) tumbled to a new six-year low on Thursday, sinking to its lowest price since August 2011 at $35.00 each after the specialty retailer last night issued a downbeat forecast for its current quarter and the rest of the year to upstage better-than expected Q2 financial results.

The company is expecting to earn between $0.25 to $0.30 during its fiscal Q3 ending in October, trailing the Capital IQ consensus by at least $0.06 per share. It also lowered its FY17 earnings outlook to a new range of $3.00 to $3.20 per share, down from its prior forecast expecting $3.10 to $3.40 per share and also lagging analyst estimates by at least $0.02 per share.

Excluding one-time items during the three months ended July 29, the company earned $0.48 per share, retreating from a $0.70 per share profit during in the year-ago period but beating the $0.44 per share analyst mean. Net sales decreased 4.6% from the same quarter last year to $2.755 billion, also topping $2.751 billion consensus.

In other sector news,

(+) SSI, Q2 sales jump 11.4% over year-ago period to $377.1 mln, edging out the $374.8 single-analyst estimate. Narrows projected FY17 net loss to $0.90 to $1.35 per share from prior range of $0.95 to $1.55 per share but still stradding the $1.01 per share lone-analyst call.

(-) CATO, Q2 net loss of $0.03 per share reverses $0.67 per share profit last year and misses single-analyst estimate expecting net income of $0.11 per share. Net sales fall 13.3% to $207 mln, also lagging the $209.5 mln single-analyst forecast.


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