No Pep for Talbots as Retailer Plummets

by Anthony John Agnello | June 7, 2011 12:48 pm

No Pep for Talbots as Retailer Plummets

The morning heat index is dominated by retailers and firms that serve them with G-III Apparel Group, Talbots and Pep Boys all dropping due to weak earnings reports. In addition, packaging manufacturer Temple-Inland got a big boost from a serious buyout bid.

Temple-Inland (NYSE: TIN[1]), the Indiana-based packaging company specializing in corrugated products and building materials, skyrocketed about 40% to more than $29 on nearly 15 times normal trading volume. The massive jump came after International Paper (NYSE: IP[2]) put in a cash offer to buy TIN for more than $30 per share.

Talbots (NYSE: TLB[3]) dropped a worrying 38% on more than 11 times normal stock volume. Shares were trading below $2.80 midday. Retailer Talbots reported first quarter adjusted operating income of about $8 million, down from $32 million during the same period in 2010. TLB is down 70% since the beginning of the year.

Auto parts retail chain Pep Boys (NYSE: PBY[4]) fell more than 19% to about $11 on 5 million shares. The fall began in after-hours trading on Monday following a disappointing first quarter earnings report. Pep Boys disappointed analysts with reported first quarter revenues of $513 million, off from the expected $537 million. Analysts even less happy with reported EPS of 23 cents compared with expected 30 cents.

G-III Apparel Group (NASDAQ: GIII[5]) was down more than 11% on more than five times normal trading volume. GIII is a clothing manufacturer that provides wares for JC Penny (NYSE: JCP[6]), Kohl’s (NYSE: KSS[7]), and Macy’s (NYSE: M[8]). GIII Monday reported $3.23 EPS for fiscal 2012, below expected $3.25. Piper Jaffray lowered its price target on the company from $46 to $45. Shares were trading under $34 midday.

Rick’s Cabaret (NASDAQ: RICK[9]), owner and operator of numerous nightclubs across the U.S., was down almost 5% on five times normal trading. RICK has fallen steadily since May 17 and now trades below $8.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello[10] and become a fan of InvestorPlace on Facebook.[11]

Endnotes:
  1. TIN: http://studio-5.financialcontent.com/investplace/quote?Symbol=TIN
  2. IP: http://studio-5.financialcontent.com/investplace/quote?Symbol=IP
  3. TLB: http://studio-5.financialcontent.com/investplace/quote?Symbol=TLB
  4. PBY: http://studio-5.financialcontent.com/investplace/quote?Symbol=PBY
  5. GIII: http://studio-5.financialcontent.com/investplace/quote?Symbol=GIII
  6. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP
  7. KSS: http://studio-5.financialcontent.com/investplace/quote?Symbol=KSS
  8. M: http://studio-5.financialcontent.com/investplace/quote?Symbol=M
  9. RICK: http://studio-5.financialcontent.com/investplace/quote?Symbol=RICK
  10. @ajohnagnello: http://twitter.com/#%21/ajohnagnello
  11. InvestorPlace on Facebook.: http://www.facebook.com/pages/InvestorPlace/178906405484848

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