Wal-Mart wins where Macy’s falls

If Tuesday session was strongly European, Wednesday closed with a marked American

accent as national retailers are getting up to speed with the back-to-school, which total spending including college will amount to 72.5 billion dollars, as estimated by the National Retail Federation.

It was all anticipation for Wall Street in regards to Wal-Mart Stores Inc. (WMT), that will announce second-quarter earnings before the bell rang on Thursday, August 15. Wal-Mart executive management will host a conference call to discuss the results and provide their perspective on market dynamics. The call will be broadcast live via the Internet. As broadly reported by trade media, Wall Street anticipates WMT will earn 1.25 dollars a share for the quarter although iStock expects the apparel retailer to beat analysts’ consensus forecast with 1.26 dollars per share.

It’s noteworthy that Wal-Mart has surpassed the consensus estimate 12 of the last 16 quarterly releases. As stressed by the analysis team at iStock, on average, WMT has beaten the market expectations for the last months, so, allegedly, investors can feel confident that earnings won't disappoint by too much.

In the meantime, upscale department store chain Macy’s (M) disclosed a weaker-than-expected 0.7 percent profits for the second-quarter profits on Wednesday, lowering its full-year earnings outlook accordingly. On the back of the news, Macy’s shares dove by 4.6 percent ahead of the opening bell.

Macy’s earned 281 million dollars, or 72 cents a share last quarter, compared with a profit of 279 million dollars, or 67 cents a share, a year earlier. These figures come below analysts’ expected EPS of 78 cents.

Revenue contracted as well for the retailer, 0.8 percent to 6.08 billion dollars, again behind the Street’s view of 6.26 billion dollars. Same-store sales also fell 0.8 percent, missing forecasts from analysts for a jump of 2.3 percent. “Our performance in the period, in part, reflects consumers` continuing uncertainty about spending on discretionary items in the current economic environment,” CEO Terry Lundgren said in a statement.

With the weaker results in mind, Macy’s has downgraded its EPS guidance to a range of 3.80-3.90 dollars, compared to its previous 3.90-3.95 and below estimates from analysts for 3.94 dollars. For the full year, management expects same-store sales to increase 2 percent to 2.9 percent, compared with the company’s prior target of about 3.5 percent.

Another big player within the apparel industry in the US, Nordstrom - NYSE:JWN - reported losses for the seasonal financial period, seeing its stock down to a close of 60.18 dollars with the total traded volume of 3.06 million shares. Nordostrom’s current market capitalisation stands at 11.74 billion dollars. The stock has a 52-week high price of 63.34 dollars and its 52-week low was recorded at 50.94 dollars.

Finally, New York-based Cache reported a loss of 3.2 million dollars, or 17 cents per share, for the quarter ended June 29, compared with a profit of 1 million, or 8 cents per share, a year ago. The women’s apparel retailer said costs of its turnaround efforts resulted in a loss for its second quarter.

The company said it incurred costs of 956,000 dollars in the latest quarter associated with employee separation charges. Sales ended into the red as well, coming lower to 60.1 million dollars, with sales at stores open at least a year slipping 0.5 percent, compared with 4.7 percent growth in the year-earlier quarter.