The retail sector's earnings reports from last quarter have largely been crammed into the tail-end of earnings season, but that doesn't make the data any less telling. Here's a look at how four more retailers did last quarter, plus some thoughts about what wasn't being touted in the news releases.
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Citi Trends, Inc. (Nasdaq:CTRN)
Citi Trends took in 3.5% less revenue during Q2 than it did in the same quarter a year ago, though the dip in sales widens to 12.4% if looked at on a same-store basis.

The result? Though the per-share loss was less than a penny, it's a major disappointment compared to income of 20 cents per share in last year's second quarter. And, it was a disappointment to the market, which was expecting a 4 cent profit this time around. (Consensus estimates can send stocks spiraling - but are they representing reality? Read Surprising Earnings Results.)

Given the circumstances and environment, normally these numbers would be perfectly forgivable. In Citi Trends' case though, an almost-cavalier comment in the press release prompts more than a little concern....

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"...As is typical when comparable store sales are negative, gross margin was lower in this year's second quarter due to higher merchandise markdowns; however, the overall decline in gross margin was limited to 60 basis points due to continued improvement in inventory shrinkage results. Selling, general and administrative expenses were managed tightly, increasing only 5.7%, even with a 13% increase in store selling square footage since last year's second quarter."

We thank the company for the added perspective, but an increase of 'only' 5.7% in general, selling, and administrative expenses is nothing to brag about. Gymboree increased sales and earnings in Q2 (below), yet managed to cut those expenses.

Yes, Citi Trends has 13% more square footage to service, but the 3.5% decline in sales says it's not getting any return at all on the investment. It's a troubling disparity for investors.

Limited Brands, Inc. (NYSE:LTD)
Limited Brands posted a 29.6% dip in per-share income during the second quarter, earning 19 cents per share versus 27 cents - after adjustments - for the same quarter a year ago. Taking out the accounting adjustments, the numbers are 23 cents and 30 cents, respectively.

Either way, it's an alarming dip - almost as alarming as the 9% tumble in same-store sales. On the other hand, it's still better than the 16 cents per share analysts expected.

Limited Brands expects a loss of 7-12 cents per share during the third quarter, but expects a profit of 75-90 cents for the year.

The Gymboree Corporation (Nasdaq:GYMB)
Though Gymboree certainly faced the same challenges almost all retailers did last quarter, this children's retailer managed to do something that distinguishes it from almost all others.... sales were up, by 5.0%. Moreover, earnings were up from 27 cents per share to 41 cents for this year's Q2. Analysts only expected a profit of 39 cents.


What was interesting - perhaps stunning - is how the company projected a slight decline in sales and earnings in Q3 of this year despite a great Q2. And, though analysts are saying Gymboree is on track to earn $1.05 per share during the third quarter, the company maintains Q3 earnings should be between 95 cents and $1.03 per share.

What's been obscured is that Gymboree's has topped analyst estimates in at least the last four quarters. So, even if Q3's comps aren't compelling (which is questionable), history says to expect a 'beat' anyway. The retailer has a way of under-promising and over-delivering. (Find out if management is doing its job of creating profit for investors; check out Assess Shareholder Wealth With EPS.)

Hot Topic, Inc. (Nasdaq:HOTT)
Hot Topic took a loss of 7 cents per share last quarter, which was considerably worse than the 1 cent loss made in the same quarter a year earlier. Same store sales fell 7.7%, while total sales fell 5.4%. Though not good, earnings were a penny better then expected, and revenue was just a hair under estimates.

It was also the fight time in a row the company has topped analyst estimates, which makes the lowered Q3 outlook tricky to interpret.

Hot Topic expects to earn between 11-13 cents per share for the current quarter, which includes a 2 cent charge taken because of the store's online music site. Analysts were looking for 15 cents per share without the charge. Could the company be low-balling again, and setting up yet-another once cent 'beat'? That's my guess.

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