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Ticker Shock: Abercrombie, Nordstrom Caught With Pants Down


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


Sweet day yesterday.

As we slept, Asian markets rose. The Hang Seng and the Nikkei were both up more than 2%. This morning, Europe was showing me some green as well. Here in the US, however, we're off to a lower start. Nothing horrible, but lower nonetheless.

Here's what I'm seeing today. It's a potpourri of retail results.

Nordstrom (JWN)
On Thursday after the close, the high-end retailer disseminated its third-quarter numbers.

Excluding items, the company earned $0.30 per share. That was just shy of the $0.31 per share the Street was expecting. Comps were off 11.1%.

That being said, the company is now looking for $1.87 to $1.97 per share for the year. I suppose some could say that's not too shabby for a $13-ish stock. But the Street was at $2.21 a share. Plus, what reassurance do I have that these numbers are doable?

I'm taking a pass.

Abercrombie & Fitch (ANF)
The company best-known for its scantily clad models and its unique CEO released its third-quarter numbers this morning.

The Ohio-based clothier kicked out a profit of $0.72. Analysts were reportedly at $0.71. Its top line, however, was shy of expectations. And its same-store-sales were off a kind-of-sickening 14%.

Adding some fuel to the fire, the company also forecasted EPS of $1 to $1.05 for the fourth quarter, and full-year earnings of $3.27 to $3.32. The Street, however, had been looking for $1.57 for the fourth quarter and $3.82 for the year.

Abercrombie is one of those companies I think has the potential to shine over the long run. But given these expectations, I'm reluctant to pull the trigger right now.

In the interest of fairness, I do want to toss in a tidbit for the Abercrombie bulls: A quick gander at the insider data reveals an insider purchase of 1,000 shares back in August - when the stock was above $50.
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No positions in stocks mentioned.

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