Traders Eye Gap (GPS), Zumiez (ZUMZ), Others, Following H&M Q1 Miss
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Investors will be focused on clothing retailers like The Gap (NYSE: GPS), Aeropostale (NYSE: ARO), Zumiez (Nasdaq: ZUMZ), American Eagle (NYSE: AEO), and others following the release of Hennes & Mauritz's (H&M's) first-quarter results.
The retailer reported net income of about SEK 2.74 billion, compared to SEK 2.62 billion in the same period the prior year. The Street was looking for net income of SEK 2.99 billion. Sales rose 14 percent to SEK 27.8 billion, with comps up 3 percent.
Gross margins also compressed by about 200 basis points from 57.8 percent last year to 55.8 percent. Gross margins are at the lowest point since 2004.
H&M said it refused to raise prices to customers in Europe amid sovereign-debt worries, opting to keep shopper confidence instead. The news comes as retailers are gripping with increasing cotton and other raw materials prices.
In addition, a milder winter increased the need for H&M to markdown some goods as inventories began to bulk up.
H&M shares are down about 5.3 percent in European trading. Other clothiers are flat early Thursday.
The retailer reported net income of about SEK 2.74 billion, compared to SEK 2.62 billion in the same period the prior year. The Street was looking for net income of SEK 2.99 billion. Sales rose 14 percent to SEK 27.8 billion, with comps up 3 percent.
Gross margins also compressed by about 200 basis points from 57.8 percent last year to 55.8 percent. Gross margins are at the lowest point since 2004.
H&M said it refused to raise prices to customers in Europe amid sovereign-debt worries, opting to keep shopper confidence instead. The news comes as retailers are gripping with increasing cotton and other raw materials prices.
In addition, a milder winter increased the need for H&M to markdown some goods as inventories began to bulk up.
H&M shares are down about 5.3 percent in European trading. Other clothiers are flat early Thursday.
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