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Consumer Sector Update for 12/17/2015: SCHL,P,PIR

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Top Consumer Stocks

WMT -1.76%

MCD +0.14%

DIS -1.22%

CVS -1.77%

KO Unchg

Consumer stocks were broadly lower today, with shares of consumer staples companies in the S&P 500 retreating over 0.9% while shares of consumer discretionary firms in the S&P 500 were slipping more than 1.1%.

In company news, Scholastic Corporation ( SCHL ) tumbled Thursday after the book publisher today reported fiscal Q2 net income and revenue trailing analyst projections, upstaging plans to return up to $200 million to its shareholders through a modified Dutch Auction tender offer.

The Harry Potter publisher reported a Q2 profit of $64.9 million, or $1.84 per share, down from $68.5 million during the same quarter last year and trailing analyst projections looking for a $2.10 per share gain. Revenue slipped 1.5% lower to $601.8 million, also lagging the Street view expecting around $607 million in revenue for the three months ended Nov. 30.

Under the terms of the proposed stock buyback offer, shareholders can tender some or all of their shres at a specified price range to be determined at a later date. It expects to begin the stock buyback before the end of the month, using available cash on hand to fund the share repurchases. The company also said it still has around $60 million remaining under its current stock buyback authorization.

SCHL shares were down more than 8% at $37.79 apiece, recently dropping to a session low of $37.18 a share.

In other sector news,

(+) P, (+13.1%) Government panel raises music royalties by 21% rather the 79% increase industry was seeking. Ruling prompts Albert Fried upgrade to Overweight. Raised to Market Perform with $16 price target at FBR Capital. Also, price target raised by $3 to $17 at Axiom Capital while MKM Partners increases price target by $4 to $18 a share.

(-) PIR, (-19.3%) Sees adjusted Q4 EPS of $0.18 to $0.22, trailing Capital IQ consensus by at least $0.14 per share. Also trims projected FY16 merchandise margin, as a percentage of sales, to 55% from prior guidance expecting between 55.5% to 56%.

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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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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