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Bed, Bath & Beyond climbed more than 6 per cent to lead US equities in early activity on Thursday as retailers reported better than expected sales for the month of March.
Same stores sales rose 4.3 per cent last month, well above the 1.8 per recorded by retailers in the period a year ago, according to data indexed by Thomson Reuters.
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A boon for US retailers, demand for the latest fashion trends is typically strong in the lead-up to the weekend’s Easter holidays, even as goods are still sold at full price, said Jharonne Martis, director of research at Thomson Reuters. Significantly warmer weather in March throughout the US also helped boost pent-up demand for spring clothing, he said.
Shares in Bed, Bath and Beyond gained 6.4 per cent to $70.50 to lead all stocks on the S&P 500. The home goods and appliances retailer reported fourth-quarter earnings per share above analyst projections and revised up its forecast earnings per share for its first quarter of this year.
The company reported fourth-quarter earnings per share of $1.48 beating analyst projections of $1.32.
“This was 15 cents above the high end of guidance,” said Laura Champine, analyst at Canaccord Genuity. “Bed, Bath and Beyond has beaten the high end of its guidance range for 13 consecutive quarters dating back to the February 2009 quarter,” she noted and raised the price target for its shares to $73.
Kate McShane, analyst at Citigroup, also increased her price target for the company but warned that earnings per share growth may decelerate as competition from online retailers increased.
Overall, the S&P 500 was in negative territory for a third consecutive day as the benchmark US index retreated further below the 1,400 threshold. The S&P 500 fell 0.2 per cent 1,396.88.
The Dow Jones Industrial Average declined 0.2 per cent to 13,046.22, while the Nasdaq Composite Index was flat at 3,067.87.
Another retailer Constellation Brands fared far worse in the morning session. Shares in the world’s largest wine company sank by 10.2 per cent to $22.17 to make it the worst-performing equity on the main US market as trading began on Thursday.
The decline came after the company said full-year earnings per share would come in below analyst projections. A Bloomberg survey had put 12-month earnings per share around $2.23, but the company warned that it was likely to be between $1.93 to $2.03 instead.
TJX Companies , operator of the US retail chains TJ Maxx and Marshall’s, rose 2.2 per cent to $40.22 after it reported that same stores sales climbed 10 per cent in March and increased its first-quarter earnings per share guidance.
