Costco, Abercrombie & Fitch and Ross Stores slumped Friday amid their latest earnings reports, after the retail stocks surged to highs.
Late Thursday, Costco missed holiday-quarter revenue expectations, offsetting higher e-commerce sales.
Abercrombie & Fitch guided high Wednesday after beating lofty expectations for the fourth quarter. On Tuesday, Ross Stores gave cautious guidance after easily beating earnings and revenue estimates.
Elsewhere in the retail space, Dick's Sporting Goods reports next Thursday.
Led by Abercrombie, the retail stocks posted blistering gains in the past year. Despite their earnings tumble this week, they remain comfortably above their longer-term moving averages.
Costco Earnings
Estimates: Analysts expected Costco to earn $3.62 per share on revenue of $59.11 billion. Year over year, Costco earnings were seen growing nearly 10% as sales rise 7%.
Results: Late Thursday, Costco reported EPS of $3.92, up nearly 19% and ahead of estimates. Revenue rose 5.7% to $58.442 billion, missing views.
In the fiscal second quarter, earnings were "positively impacted by a $94 million ($0.21 per diluted share) tax benefit due to the deductibility of the $15 per share special dividend to the extent received by 401(k) plan participants," the company said in a release.
Sales were negatively impacted as "a result of the fifty-third week last year."
Comparable sales grew almost 6% vs. a year earlier. Online sales grew 18% vs. a year ago.
Shares slid more than 7% on the stock market today, down more than 3% for the week. Costco set a fresh 52-week high Thursday ahead of earnings. Costco stock has leapt up 53% in the past year.
Shares are far extended from a September 2023 flat-base breakout, the MarketSurge pattern recognition shows. That means they are not in buy range.
Analysts turned in a couple of price target hikes early Friday. Baird raised to 850, from 775, with an outperform rating on the stock. Wells Fargo lifted its target to 750, from 675, with an equal weight rating.
Retail Stocks: Dick's Sporting Goods On Deck
Dick's Sporting Goods is due to report March 14 before the market opens.
Dick's stock edged higher, near 182, Friday. Shares jumped 24% in the past year. The retail stock is well extended from its January breakout past 152.61.
Dick's Sporting Goods stock set a new high Wednesday. Shares nudged lower Friday, near 181.
Abercrombie & Fitch Earnings
Estimates: Wall Street expected Abercrombie & Fitch to deliver earnings of $2.83 per share on revenue of $1.429 billion for the holiday quarter. Year over year, earnings were seen surging nearly 250%, with sales up 19%. The retail is lapping a 29% earnings decline in the year-ago quarter.
Results: Early Wednesday, Abercrombie posted EPS of $2.97, a 267% increase and above views. Revenue grew 21% to $1.453 billion.
Outlook: The teen-friendly apparel retailer guided expectations for fiscal 2024 sales growth of 4%-6%, up from $4.3 billion in 2023.
Analysts were expecting 3.4% revenue growth in fiscal 2024, FactSet shows. Abercombie's fiscal year ends in January.
Abercrombie stock sank 7.1% Friday, sliding in big volume for a third consecutive day. It slid nearly 10% for the week.
Shares of the once-bankrupt retailer set a 52-week high Tuesday, ahead of earnings.
The retail stock soared 355% in the past year. It is far extended from its prior breakout last June.
"Abercrombie & Fitch's ability to persuade middle-aged shoppers to retread the choices of their youth helped its shares quadruple last year, to an all-time high," the Financial Times said in January, also noting "sharp efficiency gains."
Ross Stores Earnings
Estimates: Analysts expected Ross Stores to earn $1.66 per share on revenue of $5.812 billion, according to FactSet. Year over year, earnings were seen jumping almost 27% as sales grow 12%.
Results: Late Tuesday, Ross Store earnings came in at $1.82 per share, easily beating estimates. Sales jumped 15.5% to $6 billion, also above views. That marks the fifth straight quarter of quickening sales growth for the discount retailer.
The sales results saw a $308 million benefit from an extra week vs. a year ago, Ross Stores said.
Margins improved during the quarter, with the company citing "strong gains in same store sales and lower freight costs that were partially offset by higher incentives."
Outlook: The retailer guided Q1 EPS of $1.29-$1.35 and full-year 2024 EPS of $5.64-$5.89. Analysts, on average, were expecting Q1 EPS of $1.26 and 2024 EPS of $5.90.
The guidance reflects "ongoing uncertainty in the macroeconomic and geopolitical environments," the Ross Stores earnings release said.
The company authorized a new two-year stock repurchase program and raised the quarterly dividend.
Ross Stores stock gave 0.2% Friday, down nearly 3% for the week. Shares pegged a 52-week high Feb. 29, ahead of the earnings report.
Ross stock is far extended from a November 2023 flat-base breakout.
