Posts Tagged ‘consumer discretionary’

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Apollo Group Inc. (APOL) benefits from government ruling

Thursday, June 2nd, 2011

Apollo Group Inc. (Nasdaq: APOL) shares rose 10.2% to $46.50, after the U.S. Education Department softened a rule that had threatened some aid to for-profit colleges.

The Department of Education on Thursday rolled out a rule that denies federal aid if programs don’t lead to “gainful employment” in a recognized occupation.

But the final rule would deny assistance as early as 2015, rather than immediately, if three tests over student loan repayment weren’t met.

“If you get three strikes in four years, you’re out,” Education Secretary Arne Duncan said in a statement. The department estimates that 18% of for-profit programs are expected to fail the thresholds at some point, with 5% of them failing to improve and ultimately losing eligibility.

Phoenix-based Apollo Group was one of a number of companies in the sector that jumped on the news.

Apollo Group, Inc. is one of the world’s largest private education providers and has been in the education business for more than 35 years. The Company offers innovative and distinctive educational programs and services both online and on-campus at the undergraduate, master’s and doctoral levels through its subsidiaries: University of Phoenix, Apollo Global, Institute for Professional Development and College for Financial Planning.

The Company’s programs and services are provided in 40 states and the District of Columbia; Puerto Rico; Latin America; and Europe, as well as online throughout the world.

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Orbitz Worldwide Inc. (OWW) celebrates legal win with stock surge

Thursday, June 2nd, 2011

Orbitz Worldwide Inc. (NYSE: OWW) shares surged 25.8% to $2.78 Thursday morning, after an Illinois court ruled Wednesday that American Airlines must let the online travel company resume selling its tickets. Volume for the stock was 1.3 million shares, or more than four times its all-day average.

American (owned by parent AMR Corporation) had removed its information from the website in December while it disputed the terms that it shares with the global distribution systems that currently act as the distributors for flight data of more than 90% of flights bought by consumers in the U.S.

American and other airlines want to be able to sell more flights of products through their own websites, cutting out the fees that they currently pay to GDS providers. The former re-entered a court dispute with GDS providers Sabre and Travelocity with an antitrust suit it filed in a Texas court Wednesday.

“This reinstatement of American Airlines’ full schedule of flights on Orbitz.com and Orbitz for Business is a win for transparency, consumer choice and for all of our mutual customers,” Orbitz said in a statement.
The decision grants Orbitz and Travelport, which owns nearly half of Orbitz, injunctive relief that was denied late last year by a different judge. Travelport later appealed that ruling.

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Syms Corp. (SYMS) shares soar as Board seeks options

Thursday, May 26th, 2011

Syms Corp. (Nasdaq: SYMS) saw its shares surge by 25.9% Wednesday afternoon to $9.38, after the operator of Filene’s Basement stores and its own namesake chain said it has hired Rothschild Inc. to explore strategic options for the company. Volume for the stock topped 148,000 shares, or more than 12 times its full-day average.

The company, based out of Secaucus, New Jersey, said its Board of Directors has initiated a process to explore and evaluate various potential strategic alternatives, which may include a possible sale of the Company. The Company has retained Rothschild Inc. as its exclusive financial advisor to assist the Company in connection with the strategic review process.

There is no defined timeline for this strategic review and there can be no assurance that the review of strategic alternatives will result in any specific action or transaction. Syms does not intend to comment further regarding the evaluation of strategic alternatives, unless a specific transaction is approved or review process is concluded, or it otherwise deems further disclosure is appropriate or required by law.

Management was not available for comment.

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Guess Inc. (GES) Q1 numbers send shares skyward

Thursday, May 26th, 2011

Guess Inc. (NYSE: GES) shares rose 12.2% to $44.99 a day after the clothing retailer reported first-quarter earnings that beat analysts forecasts. Volume for the stock was 4.1 million shares or quadruple its full-day average.

Wednesday, the Company reported net earnings of $42.7 million, a 15.2% decrease compared to net earnings of $50.3 million for the first quarter of fiscal 2011. Diluted earnings per share decreased 14.8% to $0.46, compared to $0.54 for the prior-year quarter. The current quarter’s earnings per share include $0.09 in net unrealized mark-to-market charges related to foreign currency contracts and balances, while the prior-year quarter’s earnings per share included a $0.04 charge related to the acceleration of pension cost amortization.

Revenues jumped across all operating sectors, with Asian revenues increasing 24%, European revenues growing 12%, North American retail revenues surging 5%, and North American wholesale revenues spiking 7%. Total net revenue for the first quarter of fiscal 2012 increased 9.8% to $592.2 million from $539.3 million in the prior-year quarter. In constant dollars, total net revenue increased 7.9%.

Guess CEO Paul Marciano commented, “We are pleased with our first quarter performance, with all of our businesses delivering earnings within or beyond our previous expectations. We continued to expand the global presence of the Guess? brand, with each of our segments growing in the quarter.

“Europe and Asia continued to drive that expansion, individually delivering double digit revenue increases, which combined to represent almost two-thirds of the Company’s top line growth. Our team executed well, managing costs and inventories tightly, which produced an operating margin that was two full points stronger than our previous expectations.”

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Zale Corp. (ZLC) proves a jewel as shares hike

Wednesday, May 25th, 2011

Zale Corp. (NYSE: ZLC) shares jumped 21% to $5.35, after the diamond and jewelry retailer reported third-quarter revenue that beat analysts’ expectations. Volume for the stock was 4.3 million shares, or more than 10 times its daily average.

Zale announced that for the third fiscal quarter ended April 30, 2011, it had a net loss from continuing operations of $10 million, or $0.31 per share, compared to a net loss from continuing operations of $15 million, or $0.46 per share, in the comparable quarter last year.

Revenues for the quarter were $412 million, an increase of $52 million, or 14.5%, compared to $360 million in the same period last year. Comparable store sales during the quarter increased 15.2%, compared to a decrease of 2.2% during the same period last year. At constant exchange rates, which exclude the effect of translating Canadian currency denominated sales into U.S. dollars, comparable store sales increased 14.2% for the quarter.

Zale CEO Theo Killion commented, “We continue to make progress in our multi-year initiatives to return the Company to profitability. Our results validate that the work we’ve done to improve our marketing, our product and our guest experience is beginning to take hold.”

“This quarter marked the second consecutive quarter of positive same store sales,” concurred CAO/CFO Matt Appel. “We are pleased with the trend of improved financial performance resulting from our turnaround initiatives.”

Irving, Texas-based Zale Corporation is a leading specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,845 retail locations throughout the United States, Canada and Puerto Rico, as well as online.

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