Thursday, August 08, 2013

Orbitz Leaps 40% Due to Great Numbers but Teen Clothing Retailers Suck

I have tried Orbitz for my last trip and was pretty happy with the results. It seems that they are doing very well this past quarter.

Before the market opened, Orbitz reported earnings of $561,000, or breakeven on a per-share basis, on revenue of $225 million, compared with a profit of $4.6 million, or 4 cents a share, on $201 million in sales in the same period a year ago. Excluding one-time items, Orbitz would have earned 17 cents a share. Wall Street analysts surveyed by Thomson Reuters had forecast Orbitz to earn 9 cents a share on $218.9 million in revenue. The company said its results were helped by gains in sales of hotel rooms and vacation packages, which made up 48% of Orbitz's revenue in the quarter. Orbitz also said it now expects revenue for the year to come in between $840 million and $850 million, while analysts had estimated sales of $831.4 million.

I guess this means Americans are starting to travel more and are spending more money. The jump in vacation packages are especially telling since Americans had sworn off vacations for the last few years. What is interesting is that Teen Clothing Retailers are seeing pain at the same time.

Aeropostale slumped after the teen apparel retailer said same-store sales in the second quarter plunged 15 percent and the company now sees a second-quarter loss of between 23 cents a share and 25 cents a share, versus Wall Street estimates for a loss of 17 cents a share. Teen specialty apparel store Zumiez posted a weaker-than-expected 0.8 percent gain in July same-store sales. Roth Capital cut its price target on Zumiez to $32 a share from $36. 

And earlier this week, rival teen clothing retailer American Eagle Outfitters said its second-quarter profit will likely be less than half of what Wall Street was expecting, citing weak sales and lower margins.


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