As overseas indices hovered in the red, U.S. stocks stepped into positive territory at the bell with the Dow Jones Industrial Average showing a 0.34 percent gain to 17,918.27. Investors are eyeing declining oil prices and its impact on the market.
Meanwhile, the WWD Global Stock Tracker remains up over 6 percent to 114.96 for the prior three-month period. Leading issues driving the tracker higher include American Apparel Inc., up 53 percent, Salvatore Ferragamo Italia SpA, up 34 percent, and American Eagle Outfitters Inc., up 33 percent.
American Apparel is getting a boost from recent announcements of a new management team that includes marketing and digital gurus charged with turning the company around. For Salvatore Ferragamo, a weaker euro helped drive sales within the tourism segment.
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Last week, American Eagle Outfitters Inc. posted a 3 percent topline gain to $1.07 billion for its fiscal year. The company also noted a 13 percent gross profit increase – rising 320 basis points to 35.1 percent as a ratio to sales.
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In its quarterly report, the teen retailer said the margin improvement “was driven primarily by reduced markdowns and was partially offset by 90 basis points of rent deleverage, combined with higher delivery costs related to an increase in direct orders, including orders fulfilled through our buy online ship from store program.” The higher gross margins is a good sign, and Wall Street is noticing.
In her morning report, Dana Telsey, chief executive officer of Telsey Advisory Group, said of the companies that her firm tracks, “44 percent beat our sales expectation, but a whopping 78 percent beat our gross margin expectation, due to a favorable mix shift and less promotional pressure.”
Telsey went on to say that this indicates a “better consumer environment” with less promotions as well as the fact that companies “are getting smarter with promotions to limit the impact on profits.”