Investors in retail stocks are finally getting some good news.
After a week of dismal earnings reports and forecasts, Wal-Mart Stores and other chains delivered more upbeat news over the past 24 hours, sending stocks soaring. Wal-Mart, which posted better-than-expected profit and sales, rose the most since the depths of the last recession in 2008. They climbed as much as 9.5 percent to $69.17.
“Its amazing what a difference a week can make,” said Ken Perkins, president of Retail Metrics. “Last week, it was doom and gloom — the sky is falling, retail is done and finished — and today it’s more cautious optimism. There’s opportunities out there, but the world of retail is evolving more and more into a world of technology.”
It helps that investors came into the latest batch of earnings with lowered expectations. Dick’s Sporting Goods Inc., for instance, barely beat first-quarter profit estimates and lowered its annual forecast. But shareholders were pleased to see a rebound in its Golf Galaxy chain and optimistic that the company can capitalize on the liquidation of rival Sports Authority.
American Eagle Outfitters Inc., Urban Outfitters Inc. and Perry Ellis International Inc. also rallied after topping first-quarter earnings estimates. At American Eagle, same-store sales grew 6 percent in the period, outpacing the 4.7 percent predicted by analysts. The company’s Aerie lingerie brand performed especially well, with a same-store gain of 32 percent, helped by a shift toward lacy “bralettes.”