This Is the Week for Retailers
The unrest in Libya is boosting energy prices Tuesday: oil up about 7 percent, heating oil up 4.2 percent, gasoline up 3.8 percent. Saudi Arabia will not allow any supply disruptions from the Middle East to impact global supplies of oil, the Saudi oil minister told CNBC, though that is scant reassurance.
The Borsa Italiana, the stock exchange in Italy, failed to open...officials blamed problems with the data feed system. Since Italy is close to Libya, it couldn't have come at a worse time.
This is the big week for retail earnings, most of which have a quarter that end in January. Results so far are mixed.
1) Wal-Mart is down Tuesday morning. It earned $1.34 in its fourth quarter, beat estimates by 3 cents, but sales of $115.6 billion were below consensus. More importantly, same store sales in the U.S. Wal-Mart division dropped 1.8 percent, the seventh consecutive quarterly drop. Guidance for Q1 of $0.91-$0.96 was also below consensus of $0.96.
2) Home Depot is up. Earnings of $0.36 topped the $0.31 consensus, estimates, sales rose 3.8 percent, company boosting its dividend by 6 percent and raising its full year guidance for revenues and earnings. Lowe's will report Wednesday.
3) Macy's was up in pre-open trading, then dipped after the market open, after beating Street estimates ($1.59 vs. $1.52 consensus) and its own expectations. Comps in the quarter grew 4.3 percent while a 29 percent surge in online sales contributed to about one-fourth of that same-store sales growth.
Guidance for 2011 of $2.25-$2.30 is inline with $2.27 consensus, and the department store chain sees comps growing 3 percent on the year.
4) Office Depot falls 1 percent despite reporting a surprising profit in its latest quarter (profit of $0.09 vs. loss of $0.03 consensus). However, the office supplies retailer still couldn't muster up any sales gains as comps fell 1 percent. Although traffic was up slightly, average transaction amounts were down.
5) Oil refiner Holly announced it is acquiring rival Frontier Oil for $2.85 billion in an-all stock deal. However, that's at a slight DISCOUNT to Frontier's $3.0 billion market cap as of Friday's close.
Frontier shares are down, but don't feel too sorry for shareholders, who will get 0.4811 shares of Holly. It's a pricey deal for Holly, as Frontier has already been hovering at a 2.5-year high and has soared 61 percent (!) over the past month.
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