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NEW YORK, United States — Retail stocks rallied on Friday after Ross Stores Inc., Abercrombie & Fitch Co. and Foot Locker Inc. reported better-than-expected sales, giving a boost to an industry that's been battered in recent weeks.
A wide range of retailers advanced, helped by a broader stock resurgence and more encouraging results than what investors saw last week from Macy's Inc. and Nordstrom Inc. Even shares of Gap Inc., which lowered its annual forecast and doesn't expect a sales rebound until spring, rose as much as 7.4 percent on Friday.
Retailers have been circumspect about the holidays, stoking fears that consumer spending will be disappointing during this crucial sales period. Best Buy Co. said earlier this week that revenue would decline in the fourth quarter, partly because fewer shoppers are buying tablets. With the latest results, retailers struck a more optimistic note. Foot Locker and Ross both beat sales and profit estimates. At long-beleaguered Abercrombie & Fitch, meanwhile, sales fell less than projected.
The bleak view of the retail industry helped Abercrombie shine on Friday, according to Paul Lejuez, an analyst at Citigroup Inc. Abercrombie’s adjusted third-quarter profit was 48 cents a share, compared with the 29 cents Lejuez had estimated.
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“With market expectations reduced after hearing earnings reports from other retailers over the last several weeks, today’s number was impressive,” he said in a report.
Foot Locker shares increased as much as 10 percent to $67.67, the biggest intraday gain in more than three years. Ross, a discount chain, rallied the most in more than seven years. Its stock climbed as much as 10 percent to $51. Gap’s gain was its biggest jump since February 2014.
A $12 billion stock buyback plan at Nike Inc. helped lift its shares as well. It climbed as much as 5.6 percent for its best performance since September. Lululemon Athletica Inc., a maker of yogawear that has been cited as a Nike takeover target, rose as much as 8.8 percent.
By Nick Turner, with assistance from Matt Townsend, Lindsey Rupp and Christie Boyden; editor: Mark Schoifet.
