H&M pays cotton toll, Nike wins Reebok

The FashionUnited Top 100 Index closed down Thursday at 1442.13

after giving up 3.96 points. H&M took the lead within traded apparel companies, highlighting how their figures are paying the cotton rising prices’ toll.

The Swedish retailer reported net income of about SEK 2.74 billion, compared to SEK 2.62 billion in the same period the prior year. The Street was looking for net income of SEK 2.99 billion. Sales rose 14% to SEK 27.8 billion, with comps up 3%. Gross margins also compressed by about 200 basis points from 57.8 % last year to 55.8%. Gross margins are at the lowest point since 2004.

H&M shares are down about 5.3% in European trading. Other clothiers are flat early Thursday In Europe, retailers were on decline and followed H&M lower as the Swedish fashion retailer missed analysts’ expectations for fiscal first-quarter results and saw input costs rise. Marks & Spencer Group PLC shed 3%, Next PLC gave up 1.1%.

According to StreetInsider.com investors will be focused on clothing retailers like The Gap (NYSE: GPS), Aeropostale (NYSE: ARO), Zumiez (Nasdaq: ZUMZ), American Eagle (NYSE: AEO), and others following the release of Hennes & Mauritz's (H&M's) first-quarter results.

Other stocks playing a central role Thursday were Nordstrom, Inc. (NYSE: JWN) was upgraded by analysts at Goldman Sachs from a “neutral” rating to a “buy” rating.

Finally, Nike lost 0.61% after news was made public on the company suiting rival Reebok. Nike Inc., the world’s biggest sporting-goods company, won a judge’s order temporarily blocking Adidas AG (ADS)’s Reebok International (RBK) from using quarterback Tim Tebow’s name on New York Jets-related clothing. Bloomberg reported how U.S. District Judge Kevin Castel in Manhattan yesterday granted Nike’s request for a temporary restraining order, a day after the Beaverton, Oregon-based company filed a lawsuit. Reebok’s licensing agreement with the National Football League ends March 31 and Nike is to become the official supplier of licensed NFL apparel.