CHICAGO, Aug. 17, 2011 /PRNewswire/ -- Zacks.com announces
the list of stocks featured in the Analyst Blog. Every day the
Zacks Equity Research analysts discuss the latest news and events
impacting stocks and the financial markets. Stocks recently
featured in the blog include: The Home Depot Inc. (NYSE:
HD), Lowe's Companies Inc. (NYSE: LOW) Urban Outfitters
Inc. (Nasdaq: URBN) Gap Inc. (NYSE: GPS) and
Abercrombie & Fitch Co. (NYSE: ANF).
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Here are highlights from Tuesday's Analyst Blog:
Home Depot Beats Estimates
The world's largest home improvement retailer, The Home Depot
Inc. (NYSE: HD) posted second-quarter 2011 adjusted earnings of
86 cents a share. The adjusted
earnings not only surpassed the prior-year quarter's earnings of
72 cents a share (an increment of
19.4%), but also outpaced the Zacks Consensus Estimate of
82 cents a share.
During the reported quarter, net sales moved up 4.2% to
$20,232.0 million compared with
$19,410.0 million in the prior-year
quarter, and ahead of the Zacks Consensus Estimate of $19,937.0 million. The increase in net sales
resulted from a growth of 4.2% in comparable store sales.
Comparable store sales in U.S. stores jumped 3.5% during the second
quarter.
Operating margin expanded 70 basis points (bps) to 11.3%
compared with 10.6% in the prior-year quarter. Improvement in
operating margin was primarily driven by effective cost
management.
Balance Sheet, Cash Flow and Dividend
Home Depot ended its second-quarter 2011 with cash and cash
equivalents of $2,551 million and
long-term debt of $10,731 million.
During the reported quarter, the company generated $4,487.0 million of cash from operations and
deployed $1,251.0 million toward
share buyback, $1,014.0 million for
debt repayment and $469.0 million as
capital expenditures.
Fiscal 2011 Guidance and Zacks Consensus
Home Depot raised its fiscal 2011 adjusted earnings guidance to
$2.34 per share from $2.24 forecast earlier on the back of a 2.5%
increase in sales. This represents an increase of 16% from the same
period last year.
Home Depot, which competes with Lowe's Companies Inc.
(NYSE: LOW), currently has a Zacks #4 Rank, implying a short-term
Sell rating on the stock. Besides, the company retains a long-term
Neutral recommendation.
Urban Outfitters Beats, Profit Falls
Urban Outfitters Inc. (Nasdaq: URBN), the retailer of
apparel, footwear, and accessories, recently posted
better-than-expected results for the second quarter ended
July 31, 2011. The quarterly earnings
of 35 cents a share beat the Zacks
Consensus Estimate of 32 cents, but
dropped 16.7% from 42 cents earned in
the prior-year quarter.
Despite registering a growth in top line, the company witnessed
a drop in bottom line due to a 19.1% rise in the cost of sales and
an increase of 11.9% in selling, general and administrative
expenses.
Urban Outfitters, which competes with Gap Inc. (NYSE:
GPS) and Abercrombie & Fitch Co. (NYSE: ANF), said that
total net sales climbed 10.3% to $609.2
million, and came ahead of the Zacks Consensus Estimate of
$605 million. Net sales increased
10.5% to $577.3 million at the retail
segment and 6.6% to $31.9 million at
the wholesale segment.
Net sales by brands are as follows - Sales grew 11.9% to
$272.2 million at Urban Outfitters,
6.4% to $272.6 million at
Anthropologie and 25.2% to $58.7
million at Free People.
The company hinted that comparable retail segment net sales
inched up 1%, whereas comparable store net sales dropped 2% during
the quarter. Comparable retail segment net sales by brands rose 18%
at Free People and 1% at Urban Outfitters but remained flat at
Anthropologie.
Urban Outfitters noted that gross profit for the quarter
declined 1.6% to $231.1 million,
whereas gross margin contracted 459 basis points to 37.9% due to
higher merchandise markdowns to sell through slow-moving stock of
women's clothing at both Anthropologie and Urban Outfitters.
Operating income plummeted 17.7% to $88
million, whereas operating margin shriveled 500 basis points
to 14.4%.
During the quarter, Urban Outfitters opened 10 new stores –– 2
Urban Outfitters stores, 4 Anthropologie stores and 4 Free People
stores. The company plans to open about 55–57 new stores over the
year.
Urban Outfitters ended the quarter with cash and cash
equivalents of $226.4 million and
shareholders' equity of $1,304.3
million. During the quarter, the company bought back 2.3
million shares, aggregating $67
million. The company still has 3.3 million shares available
at its disposal under its current authorization.
Currently, Urban Outfitters holds a Zacks #3 Rank, which
translates into a short-term 'Hold' rating.
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