Deficit and unemployment drag down stocks

Friday, 29 October 2010
With unemployment rates soaking in Europe helped by rallies and strikes all across the main economies in the world, markets are not going through their best moment these days. As a loyal echo of the ongoing social and economic unease, the FashionUnited Top 100 sinked on Thursday down to 1173.63 points, advancing a lower closure also for Friday.

Alien to the solitary German relief -their unemployment rate has hit the lowest rate in ten years; Puma AG fell by 4.9%, as well as Hugo Boss that noted a light cut of 0.08%. To make the balance, Triumph gained 4.31% and Adidas AG added 0.43%. Most of companies located in Europe saw losses on Thursday as a result of all the EU warnings to Member States to keep their public debt and unemployment rates under control.

In United States, textiles shares were relative laggards, down on the day by about 2.2%. Helping drag down the group were shares of Skechers , off about 17.2% and shares of American Apparel off about 13.1% on the day.

Breaking the ice for the first fortnight of November, fully packed with corporate releases, Carter's, Inc., the largest branded marketer in the United States of apparel exclusively for babies and young children, yesterday reported its third quarter 2010 results. Consolidated net sales increased $36.4 million, or 7.6%, to $517.9 million. Net sales of the Company's Carter's brands increased $30.3 million, or 7.9%, to $412.3 million. Carter's wholesale sales increased $20.7 million, or 12.5%, to $186.4 million due to earlier demand for seasonal product and strong over-the-counter performance, primarily in the Company's baby replenishment business. "We achieved good growth in sales in the third quarter; however, higher transportation expenses resulted in a slight decline in earnings," said Michael D. Casey, Chairman and Chief Executive Officer. "While we expect to achieve a record level of sales and earnings in fiscal 2010 and expect continued growth in sales, we believe rising product costs, particularly historically high cotton prices, will negatively impact earnings in the fourth quarter and through 2011."

Amidst the tsunami tragical aftermaths, Esprit Holdings Ltd. (reported Thursday a 9.1% drop in revenue for the three months ended Sept. 30 as its wholesale business continued to struggle.

The company said in a statement its unaudited revenue in the first quarter of its financial year ending June 30 was HK$8.51 billion, down from HK$9.37 billion a year earlier. H&M and Zara Asian competitor's revenue from the company's wholesale business dropped 20% to HK$4.16 billion and accounted for 49% of total revenue, down from 55% in the year-earlier period.

Related News