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Market Update

Hertz Withdrew Guidance, Target Lowered Annual Outlook


Author: Mukesh Buch
ticker.com
Last Update: 12:31 PM ET August 20 2014

12:15 PM New York – American Eagle net tumbled 70%. Hertz plunged after the rental services provider withdrew its outlook. Lowe’s profit soared 10%. PetSmart agreed to acquire Pet360 for $130 million. Staples net plunged 21%. Target net tumbled 62% and the retailer lowered outlook.

Tollbooth Index slid 0.1% or 10.58 to 9,481.15.

Earnings Review

American Eagle Outfitters (AEO) surged 7.6% or 88 cents to $12.47 after the specialty retailer said total revenue in the second-quarter ending on August 2 fell 2% to $711 million from a year ago period. Comparable store sales in the quarter declined 7%.

Net income in the quarter tumbled 70.4% to $5.81 million or 3 cents a diluted share compared to $19.6 million or 10 cents from a same quarter last year.

Hertz Global Holdings, Inc (HTZ) plunged 11.2% or $3.54 to $28.03 after the transportation service provider reported second-quarter U.S. rental car revenue increased 4% while rental car revenue-per-day rose 2%.

The company revised its financial forecast and expects adjusted profit for the year between $1.70 to $2 per share and revenue in the range of $11.4 billion to $11.7 billion. However, the company withdrew its previous guidance and cited ongoing auditing costs.

In June the company said it would restate or correct financial results for the past three years to fix accounting errors for about $46.3 million originating since 2011.

The J. M. Smucker Company (SJM) slipped 1.7% or $1.79 to $101.56 after the food products maker reported net sales in the first-quarter ending in July fell 2% to $1.32 billion from a year ago period.

Net income in the quarter climbed 8% to $116 million or $1.14 a diluted share compared to $127 million or $1.19 from a same quarter last year.

Lowe’s Companies, Inc (LOW) rose 3 cents to $51.55 after the retailer said net sales in the second-quarter ending on August 1 increased 5.7% to $16.6 billion from a year ago period. Comparable sales in the quarter rose 4.4%.

Net earnings in the quarter jumped 10.4% to $1.04 billion or $1.04 a diluted share compared to $941 million or 88 cents from a same quarter last year.

PetSmart, Inc (PETM) fell 51 cents to $69.22 after the pet products and services provider said net sales in the second-quarter ending on August 3 increased 1.4% to $1.73 billion. Comparable store sales in the quarter slipped 0.5%.

Net income in the quarter jumped 5.7% to $98.1 million or 98 cents a diluted share compared to $93.4 million or 89 cents from a same quarter last year.

Separately, the company agreed to acquire Pet360, the online pet specialty retailer for $130 million with additional performance-based payments totaling up to $30 million by the end of 2016.

Staples, Inc. (SPLS) fell 1.8% or 22 cents to $11.41 after the specialty retailer stated net sales in the second-quarter ending on August 2 decreased 2% to $5.2 billion from a year ago period. Comparable store sales in the quarter declined 5%.

Net income in the quarter plunged 21% to $82 million or 13 cents a diluted share compared to $103 million or 16 cents from a same quarter last year.

Target Corporation (TGT) gained 1.1% or 67 cents to $59.92 after the discount store operator reported sales in the second-quarter ending on August 2 increased 1.7% to $17.4 billion from a year ago period. Comparable store sales in the quarter were flat.

Net earnings in the quarter plunged 61.7% to $234 million or 37 cents a diluted share compared to $611 million or 95 cents from a same quarter last year.

Target lowered full-year adjusted earnings per share of $3.10 to $3.30 from earlier guidance of $3.60 to $3.90.

Data breach related expenses in the last quarter were $111 million before taxes and for the year-so-far expenses were $146 million.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc