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Consumer Sector Update for 07/20/2018: SWK,FTD,VFC,SKX


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Consumer stocks were broadly mixed today, with shares of consumer staples companies in the S&P 500 ( XLP ) climbing almost 0.6% this afternoon while shares of consumer discretionary firms in the S&P 500 ( XLY ) were slipping about 0.3%.

Among consumer stocks moving on news:

+ Stanley Black & Decker ( SWK ) was up more than 3% late in Friday trading after reporting Q2 financial results topping Wall Street estimates and also overcoming a reduction in its forecast for GAAP FY18 earnings forecast to reflect a recent settlement with U.S. Environmental Protection Agency. Excluding one-time items, the power-tool company earned $2.57 per share and posted GAAP earnings of $1.93 per share during the three months ended June 30, beating the Street view by $0.55 and $0.09 per share, respectively. Net sales rose 11% year-over-year to $3.64 billion, also exceeding the $3.48 billion analyst mean. The company cut its outlook for FY18 GAAP earnings by $0.40 per share under its previous guidance to a new range of $7.00 to $7.20 per share following the EPA settlement and now trailing the Street view expecting a $7.65 per share GAAP profit. The forecast for normalized FY18 earnings was unchanged at $8.30 to $8.50 per share, straddling the $8.38 per share consensus call.

In other sector news:

+ V.F. Corp ( VFC ) was more than 4% higher this afternoon after the footwear and apparel company reported better-than-expected fiscal Q1 financial results and raised its FY18 outlook. Excluding one-time items, the company earned $0.43 per share during the quarter ended ended June 30, beating the Capital IQ consensus by $0.10 per share. Net sales rose to $2.79 billion from $2.68 billion last year and also topping the $2.27 billion analyst mean. It also raised its FY18 profit forecast by $0.04 per share to a new range of $3.52 to $3.57 per share and increased its sale guidance by $150 million over its prior projections to $13.6 billion to $13.7 billion. Analysts, on average, are looking for V.F. Corp to earn $3.55 per share, ex items, on $13.56 billion in sales.

- Skechers USA ( SKX ) was pummeled during Friday trading, dropping over 28% to a 14-month low of $23.80 a share, after reporting Q2 financial results trailing analyst estimates and also forecasting below-consensus Q3 earnings and sales. Net income fell almost 24% to $0.29 per share during the quarter ended June 30, missing the Street view by $0.23 per share. Net sales rose 11% year-over-year to $1.13 billion, matching the Capital IQ consensus. For the current quarter, the footwear company is projecting net income between $0.50 to $0.55 per share, lagging the analyst mean by at least $0.13 per share. It also sees Q3 sales in a range of $1.2 billion to $1.225 billion compared with the $1.26 billion consensus call. Wells Fargo Friday cut its investment recommendation for Skechers to Market Perform for Outperform while Susquehanna lowered its rating to Neutral from Positive. Monness Crespi & Hardt also reduced its price target for the company's stock by $13 to $32 a share while keeping its Buy rating. The outlier Friday was Standpoint Research, which raised Skechers to Buy from Hold.

- FTD Companies (FTD) wilted Friday, dropping as much as 21%, after the floral and gifts company pre-announced Q2 revenue below Wall Street estimates and also named an interim CEO and eliminated the chief operating officer position as it begins a strategic review and company-wide cost savings plan. It sees revenue for the three month ended June 30 in a range of $299 million to $301 million, down from $328.1 million in the year-ago period and missing the $320.1 million Capital IQ consensus. FTD also hired Moelis & Co to assist with the strategic review, which will consider a potential sale or merger and various funding alternatives in addition to the company continuing its "value-enhancing" program as a standalone company. Executive vice president and counsel Scott Leven was named interim CEO, replacing John Walden, while chief operating officer Simha Kumar was terminated, effective immediately.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Business , Commodities
Referenced Symbols: XLP , XLY , SWK , VFC , SKX



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