Retail Stocks Respond on Wall Street
New York City Markets surged on Monday, with the Dow closing up 11%; the S&P 500 up 11.5% and NASDAQ up 11.8%. Retail stocks rallied in kind.
Eight of the 10 largest retail companies showed impressive gains. Lowe’s Cos. rose 11.73%; Costco and Target Corp. both jumped more than 10%. The Home Depot was close behind with a 9.92% gain and Safeway showed an 8.27% increase. Kroger climbed 6.69%; Wal-Mart Stores was up 6.51%; and Walgreen Co. rose 5.9%. CVS/Caremark had a more modest 2.66% increase.
Among the 10 largest retail companies, only Sears Holdings fell short, dropping 4.3% during Monday trading.
On the NASDAQ list of stocks that advanced most, Rocky Mountain Chocolate Factory was the one retail company cited, closing at $8.05, a $2.40 increase and a 42.48% leap.
Among the most active retail companies listed by NASDAQ were eBay, up 8.25% on Monday, Starbucks, which rose 5.96%, and Staples, which closed 16.10% ahead.
New York & Company had one of the worst days, closing at $4.27, down $2.98—a 41.10% drop from its previous close.
Longs investor now supports CVS deal
CHICAGO Longs Drug Stores’ largest shareholder, Advisory Research, announced that in view of Walgreens’ withdrawal of its offer to purchase all of the outstanding shares of Longs Drug Stores and the turmoil in the markets, Advisory Research has determined to tender into the CVS Caremark tender offer all of its clients’ holdings of Longs representing approximately 9.2% of the outstanding Longs’ shares.
Walgreens withdrew its proposal has to acquire all of the outstanding shares of Longs Drug Stores for $75 per share in cash. The offer was originally proposed on Sept. 12 and declined by the board of directors of Longs in favor of the proposed acquisition by CVS/Caremark announced on Aug. 12.
Walgreens had proposed to acquire all of the outstanding shares of Longs Drug Stores for $75 per share in cash for a total purchase price of approximately $3 billion including the assumption of debt. The offer, which is subject to standard regulatory approvals and the completion of due diligence, represents a $3.50 per share premium over the cash purchase price to be paid to Longs shareholders under the proposed acquisition by CVS/Caremark announced on Aug. 12.
New York & Company lowers EPS outlook
NEW YORK New York & Company reported that it now expects to realize a loss of $4.5 million to $7 million, or 8 cents to 12 cents per diluted share, for the third quarter of fiscal 2008.
In the third quarter to date period (August and September), comparable-store sales declined by 10.6%, which is significantly lower than the company’s expectations.
The company currently believes that the economic environment will continue to be challenging and the levels of promotional activity will accelerate throughout the key holiday selling period. In response, the company will continue to operate in a disciplined manner, focusing on providing compelling fashion and value, while maintaining tight control of expenses and inventory and by limiting capital outflows.