Movie Gallery (MOVI) shares were off 54% yesterday. While a 1st quarter earnings report suggested to some MOVI had perhaps hit a positive turning point, 2nd quarter results clearly brought things back into perspective. That is, rental industry trends continue to be weak and Movie Gallery is losing significant share. Exacerbating MOVI's distress is an unsustainable debt burden.
Red Robin Gourmet Burgers (RRGB) expects profit, excluding some items, of $1.74 to $1.83 a share this year. Tom Coughlin, the former Wal-Mart vice chairman who admitted to stealing thousands of dollars from the company, was sentenced to 27 months of home confinement. Coughlin had faced up to 28 years in prison and $1.35 million in fines. Coughlin said he would spend the rest of his life trying to undo the damage he had caused.
Target (TGT) reported 2nd quarter 2006 EPS of $0.70 versus last year’s $0.61 which was in line with estimates. Gross margins were up slightly while SG&A de-levered. EBIT margins at the retail division were down 16-bps but strong credit trends help drive total operating margin expansion of 30-bps. Credit contributed to 19% of the operating income vs. 14% last year. Receivables increased in line with sales. Delinquencies are rising, as expected, but Target is adequately reserved.
Parlux Fragrances (PARL) plunged 37 percent, the maker of Paris Hilton and Andy Roddick colognes, said in a statement filed with the SEC it delayed filing its form 10-Q and second-quarter profit may be as much as 5 cents a share. Analysts expected 22 cents.
Pacific Sunwear of California (PSUN), retailer of casual apparel and footwear catering to teenagers, said it may earn 22 cents to 30 cents a share in the third quarter. Analysts expected 49 cents, on average.
Rent-A-Center (RCII), the largest U.S. rent-to-own retailer, will pay $4.95 million in a settlement with about 6,000 employees who had alleged violations of wage and hour laws in California, the company said in a statement.