By Andria Cheng, MarketWatch
NEW YORK (MarketWatch) -- Retail stocks were mixed Friday after a disappointing consumer sentiment reading overshadowed better-than-expected sales in February, suggesting uneven consumer spending may continue.
The S&P Retail Index (RLX 441.23, +1.27, +0.29%) gave back most of its gains and was little changed at 439.95.
Led by gains in the electronics stores, February sales rose 0.3%, the fourth increase in the past five months. Sales at general merchandise stores, department stores and clothing retailers were also higher as consumers spent despite three major snowstorms in the month. See story on retail sales shaking off snow in February.
Women's clothing retailer Ann Taylor Stores Corp.'s (ANN 19.28, -0.17, -0.87%) shares were little changed. The company swung to a fourth-quarter profit after it controlled inventory and revamped merchandise to help sell more products at full price. While its adjusted profit beat analysts' estimates, sales fell slightly short.
The company said it has "strong momentum" into the first quarter, with its namesake and Loft chains generating comparable sales of about 10% in February. It sees first-quarter sales of about $445 million. For the year, it said it sees a return to positive comparable sales at both brands in each quarter this year with total sales to rise above the past year's level. See story on Ann Taylor.
Pacific Sunwear of California Inc. (PSUN 4.90, -0.85, -14.78%) tumbled 12% while rival Zumiez Inc. (ZUMZ 18.53, -1.72, -8.49%) dropped 7.7% after the teen retailers' first-quarter outlooks missed Wall Street expectations.
Pacific Sunwear said it expects to post an adjusted first-quarter loss of 32 cents to 38 cents a share with same-store sales declining as much as 18%. Wall Street previously forecast a loss of 14 cents a share.
"While management is forecasting a return to positive comps in (the fourth quarter), we would like to see evidence of product improvement in stores before we are more convinced the turn is at hand," said Adrienne Tennant, an analyst at FBR Capital Markets. She cut her rating on Pacific Sunwear to market perform from outperform.
Zumiez Inc., (ZUMZ 18.53, -1.72, -8.49%) a retailer of action-sports related apparel and shoes, forecast first-quarter adjusted loss of 6 cents to 8 cents a share. Analysts had expected the company to lose 1 cent a share.
Quiksilver Inc.'s (ZQK 3.66, +0.55, +17.69%) shares surged 15% after its fiscal first-quarter adjusted loss narrowed to 2 cents a share, while analysts had been expecting an average loss of 13 cents a share.
Aeropostale Inc. (ARO 28.29, +1.24, +4.58%) rose 5.8% after the teen retailer reported better than expected quarterly profit and forecast.
Aeropostale Inc. late Thursday reported fourth-quarter net income of $96.6 million, or 99 cents a share, up from $68.2 million, or 67 cents a share, in the year-ago period. Sales rose 16% to $801.2 million. Analysts were expecting 87 cents a share on sales of $795 million, according to FactSet. For the first quarter of fiscal 2010, Aeropostale forecast first-quarter earnings in the range of 39 cents to 40 cents a share, topping the 34-cent average estimate analysts were expecting.
Aeropostale "continues to effectively convince the customer of the good values on trend-right apparel and to gain market share as a result," said Stifel Nicolaus analyst Richard Jaffe.
Citi Trends Inc. (CTRN 31.50, +1.56, +5.21%) shares rose 5.8% to $31.67 after its fourth-quarter profit rose more than expected.
