Ticker Shock: J. Crew, Dillards Post Disappointing Results

By Glenn Curtis  NOV 26, 2008 12:00 PM

Wednesday's top stories and stocks with potential to move.


We made it 3 in a row yesterday. Now let’s go for 4!

Turkey day tomorrow!

Asian markets seemed mixed. The Hang Sang rose over 3% while the Nikkei was off more than 1%. Europe, however, was showing me some red. And here in the States we are off to a lower open.

Here’s what I’m seeing today…

J. Crew Group (JCG)
After the close on Tuesday the retailer disseminated its third quarter numbers.

The good news was that the company earned 30 cents a share, which was 4 cents north of expectations. However, the bad news is that it’s looking for $1.11 to $1.16 a share for fiscal 08’. That’s well below the $1.44 to $1.54 guidance it previously offered up in conjunction with its second quarter numbers.

I hate to say it, but I think the stock gets hit pretty hard on this news. And no, I’m not nibbling here. I don’t see a reason yet.

I should point out, however, that the insider data on Yahoo Finance seems to show a purchase of 10,000 shares back in August.

Tiffany & Co (TIF)
The ritzy jewelry retailer offered up its third quarter numbers before the open today. The company put up 35 cents a share whereas the Street was at 25 cents – sparkling…

On the flip side, however, management indicated that it’s looking for full year EPS of $2.30 to $2.50. And that’s an issue because analysts were apparently at $2.58.

Look, I think the stock could see some weakness on this news. However, I do like the company for the long run. I also want to point out that I like its overseas exposure.

Bottom Line: I’d much rather be here than, say, Zale (ZLC). Deere (DE)
The well-known agricultural equipment maker was out early this morning with its fourth quarter numbers. It earned 81 cents a share in the period. At first blush, however, it looks like the results included a charge for a factory shutdown. The Street was at 99 cents.

I thought the big news was its comments about 09’. In the release, the company said it’s looking for net income of about $1.9 billion. According to the AP, “analysts predict 2009 profit of $2.32 billion.”

Needless to say, I think the stock gets hit on this news. However, I do want to keep an eye on the shares because I still believe the company has lots of longer-term promise. If they come down to $25, I plan on revisiting the story.

Dillards (DDS)
The Arkansas based retailer put out its third quarter numbers today. The shares have already gotten slammed this year. Unfortunately, I think they could come down some more.

Excluding items by my math, it posted a loss of 64 cents a share. The Street was expecting a loss of 57 cents. Meanwhile its comp store sales were off a pretty hefty 9%.

Long story short, Dillards isn’t sitting idle. According to the release:

“Capital expenditures in 2009 are expected to be approximately $120 million compared to approximately $192 million in 2008 primarily as a result of dramatically reduced store opening activity.”

The company also announced job cuts.

Still, I'm just not inspired to bottom fish here. Sorry DDS bulls, but I think that there are better opportunities out there.

Have a great day and Happy Thanksgiving!
No positions in stocks mentioned.

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