Weekly Wrap

First and most important... The Powerball is 120 million!!! I know we shouldn't be promoting any sort of gambling here on the Chicks' website, but come on, you can't help but dream about it. I have to confess, I buy a ticket every week. I know I know, what are the chances, but my one buck lets me fantasize about what kind of airplane I would buy, what kind of castle I would build in Scottsdale, and the trips around the world that I'd bring my whole family on. Tell me it wouldn't be fun? If anything, it beats thinking about the stock market these days.

It was an earnings extravaganza this week in the market. Tons of companies reported how well, I mean, how poorly they did. I'm going to point you in the direction of a great earnings calendar over at www.fool.com.  On Tuesday, we had the following companies reporting: Applied Materials (AMAT), Abercrombie & Fitch (ANF), Four Seasons Hotel (FS), Home Depot (HD), Hancock Fabrics (HKF), JC Penny (JCP), Reader's Digest (RD), and Wal-Mart (WMT). There's more, but that's all that caught my eye. On Wednesday, we had a couple of my favorites, Ann Taylor (ANN), Donna Karan (DK), and Too, Inc. (TOO). And finally on Thursday, we had Dell (DELL), Estee Lauder (EL), The Gap (GPS), Hormel Foods (HRL), Nordstrom's (JWN),  Kohl's (KSS), The Children's Place (PLCE), and The Sharper Image (SHRP). I'll highlight a few of them but if you need to know more, click on their ticker symbol over at the Fool.com site and it will bring you to the latest news.

Kohl's - I mention this Menomonee Falls, Wisconsin discount retailer first as I'm heavy into that back-to-school shopping. Can't find a better place to get kids clothes, and it looks like I'm not the only one who thinks that. They're second quarter ended August 2, and their sales increased in the stores that have been open at least a year by 5.4% and overall sales were up 20.7%!

Dell - Duuuuuuuuude, did you read my article yesterday? All this week in the Chicks' Eye View we are featuring people on the Fortune 500's Richest List. We've highlighted the bosses of Home Depot, Fox, Intuit and finally, Dell. Dell Computer Corp. reported a net loss this second quarter to the tune of $101 million. (Compared with a net profit of $603 million a year ago.) These losses included a pretax charge of $742 million that the company took for RIFF*-ing some employees, closing down buildings, and impairment of assets. (Isn't that a funny way to say that your product is not being sold? Our assets are impaired. I wonder if those Dell laptops tipped back one too many brewskie's at the Texas Rangers game.) If you excluded the impaired assets cost and the cut employees, they posted a second quarter profit! Their sales equaled their sales last year of 7.61 billion, which is a lot better than what their competitors can say. Actually, it's not too bad considering the market we've been suffering in. Duuuuuuuuude, there are a bunch of people still buyin' a Dell.

Estee Lauder - Again, another must have on a teenager's back to school product list. Estee Lauder beat analysts' expectations this past week when they reported that their fourth quarter earnings rose 6%! And, good news, they forecasted that their fiscal year will also beat analysts expectations as they anticipate their sales for 2002 to be up 7 to 9%!

The Gap, the No. 1 U.S. apparel chain, said this past week that their second-quarter profits fell 51 percent from a year ago. How long has it been since we've heard any good news from this company? Gap, which operates Banana Republic, Gap and Old Navy stores, also said that for their current quarter (3), their earnings could also be lower than expected. The company has already RIFF'd 1,600 jobs so far this year in a cost-cutting drive.  Now they say that their number one priority is to concentrate on their costs and inventory and trying to find a good balance between them. (i.e. Flow Ratio).

Wal-Mart's earnings were inline with analysts' expectations. Nothing really exciting there, except that their next quarter might be a bit lower than expected.  Oh wait, that's not exciting either. They said that their back to school shopping is off to a slow start.

Home Depot beat Wall Street's estimates! Overall sales rose 16%, and stores open at least a year did 1% more business.

In other market news, Ford (F) said that they would cut between 4,000 and 5,000 employees across North America by year's end. It will result in a one-time RIFF charge of about $700 million. They thought they'd give us a heads up warning. Thank you, Ford. They also warned that their full-year earnings wouldn't be what were expected. They're missing analysts' expectations by five cents a share. Woops. Also doing a little RIFFing is Tyco International (TYC). The company announced plans to cut 11,300 jobs and close nearly 300 plants.

My good friend Chuck has decided a few of his employees have got to go too. With hardly a person doing any stock trading these days, Charles Schwab (SCH), the nation's biggest discount and online brokerage, announced that they would be doing some more RIFFing. They've already given the pink slip to 13% of their employees, and quite a few more should be receiving the bad news before year's end. The stock has dropped 53% since January 1. Yikes. 

Three other noteworthy items in the market this week.

The CEO of United Parcel Service (UPS) announced that he would be retiring next January. We featured Mr. James Kelly here on our site in July, and I have to say, I'm sad to see him go. He's been with UPS forever, starting as a package delivery driver in 1964, and moving his way up the corporate brown truck. He became the CEO in 1992 and expanded the company to do almost 30 billion in sales last year. Gotta love him.

The Chick-held AOLTimeWarner (AOL) also made news this past week. The world's largest Internet media company announced that they would be creating an interactive video division. This has long been the reason for the merger of AOL and Time Warner. They are going to get moving on their iTV division, or Interactive TV, which hopes to combine many different aspects of the media industry, (television, internet, movies, cable, etc.) and make it interactive. Should be interesting to watch over the next few months. Their first move was to appoint Joseph Collins, the current chief executive at Time Warner Cable, the chairman of the new interactive video division. Glenn Britt, currently president of Time Warner Cable, will replace Collins as chief executive. I'll keep you posted! During the same time, they are mulling over laying off more than 1,000 employees in its Internet division.

AOL's biggest rival, Microsoft (MSFT), announced this past week that they might have to delay the shipping of their Xbox video game. Seems there is a glitch in the Intel (INTC) hardware, but that isn't stopping them from making the 1.5 million units. They just aren't sure when they will ship.

I must get going, the Powerball is calling.  3, 9, 11, 20, 29  Powerball - 1. I think I'll put in a guesthouse at my new mansion... with a pool, a spa, a tennis court, an airplane-landing pad, and a butler.

Chick Karin

*RIFF-ing - Means Reduction In Force, or slashing employees jobs, pink slips, laying off, job cuts, getting the ax, well you get the picture.

Closing Market Numbers