With back-to-school season upon us but little time to shop, we stock market nerds can get a heads-up on the latest fashions and trends simply by reviewing a few choice conference calls.

Consider, for example, American Eagle Outfitters (AEOS).

During the second quarter, our men’s business was strong, delivering a high single digit comp increase. Strength was broad-based across most major categories, including men’s shorts, knit-tops, and woven shirts. Our overall women’s comp declined slightly with strength in aerie, bare knit-tops, shorts, and dresses offset by declines in graphic tees and polos, skirts, and accessories….

We are now in the midst of the back-to-school season and are pleased with the customer response to our collection. Our new line of women’s knit tanks and tees is a major step forward from spring and summer and a better reflection of what on trend means for our customer.

We are also seeing ongoing momentum in denim. Building on our strong jeans business, this season we took our offering to a new level with a significant amount of fashion newness in our blue issue collection and within our fit systems. Both guys and girls are embracing new fits and responding positively to fashion elements.

(Excerpt from full AEOS conference call transcript)

Abercrombie and Fitch (ANF) saw some of the same trends.

the shorts business was very strong for the quarter, and I can also tell you that the trend in denim improved over the course of the quarter.

Now, what that means go forward, we really can’t comment on and again, overlaying that, our tops business has continued to be very strong across all categories — fashion knits, fleece, just continued to be very strong but I don’t want to get into commenting about the back half of the business.

(Excerpt from full ANF conference call transcript)

Footlocker (FL) comments on the shoe business.

There were also a number of external factors that contributed to our disappointing second quarter results, including the summer fashion trend of sandals, slides and flip flops, a continuing fashion shift to brown shoes, lack of newness in the athletic category, the back to school shift from July to August in certain important states like Florida and Texas. And while steps that we took in June and July adversely impacted our profits for the second quarter, our cash flow was strong, and I believe positions our business better for the back half of this year.

From a merchandising standpoint, the story for the quarter was mostly about clearance. With that said, the marquee category led by brand Jordan, Shox Running, some Nike Max Air products, Adidas Bounce, New Balance Zip and the high-end of ASICS continues to be a very important part of our business.

(Excerpt from full FL conference call transcript)

Finally, you’ve got to have some fun during back to school season. According to GameStop (GME):

The incredible acceptance of the Wii and DS Lite platforms, coupled with the emergence of what could almost be considered a new category – non-game games such as Guitar Hero, SingStar, Boogie, et cetera — has not only attracted more customers, but we are seeing an increasing number of young girls and women in our demographic as well.

(Excerpt from full GME conference call transcript)

So there you have it. The two-minute update on the latest fashions, courtesy of SEC Fair Disclosure regulations.

Mid Cap Watch List (Track at Marketocracy) and Large Cap Watch List (Track at Marketocracy) member Abercrombie & Fitch (ANF) reported net sales of $215.0 million for the four-week period ended June 2, 2007, a 16% increase over net sales of $185.7 million for the four-week period ended May 27, 2006. May comparable store sales decreased 5% for the four-week period ended June 2, 2007, compared to the four-week period ended June 3, 2006. Those results mark a slowdown from the 4% same store sales decline last month.

The Cato Corporation (CTR) reported sales of $75.9 million for the four weeks ended June 2, 2007, a 3% increase over sales of $73.8 million for the four weeks ended May 27, 2006. Comparable store sales for the month increased 2%, which is more or less in line with the results over the last two months.

These results join those of Small Cap Watch List (Track at Marketocracy) member Aeropostale (ARO) to offer modest support to a continued consumer slowdown.

Mid Cap Watch List (Track at Marketocracy) and Large Cap Watch List (Track at Marketocracy) member Abercrombie & Fitch Co. (ANF) reported unaudited results which reflected record first quarter net income of $60.1 million and net income per diluted share of $0.65 for the thirteen weeks ended May 5, 2007.

Analysts had been expecting the company to earn $0.65 after the company recently preannounced. For the second time. Sales managed to rise 13% overall to $742 million despite a 4% decline at stores open more than one year. The sales number also failed to meet consensus estimates. Still, shares were up following the report on hopes that the worst of the same-store sales declines are past:

The Company reaffirmed its previously disclosed earnings guidance which stated it expects net income per diluted share for the first-half of Fiscal 2007 to be in the range of $1.47 to $1.52, representing between 10% to 13%
earnings growth over the first half of Fiscal 2006. The low end of the guidance reflects a flat comparable store sales scenario for the second quarter of Fiscal 2007.

The guidance implies second quarter EPS of $0.82 - $0.87, and analysts were at the low end of that range with $0.83. The key will be whether the company can finally live up to its early forecasts.

It is retail sales reporting day, and here is what our Watch List names are saying.

Mid Cap Watch List (Track at Marketocracy) and Large Cap Watch List (Track at Marketocracy) member Abercrombie and Fitch (ANF):

April comparable store sales decreased 15% for the four-week period ended May 5, 2007, compared to the
four-week period ended May 6, 2006. Total Company direct-to-consumer net sales increased 48% to $13.6 million for the four-week period ended May 5, 2007, compared to the four-week period ended April 29, 2006.

The Company expects to report net income per diluted share of $0.64 to $0.65 for the first quarter of fiscal 2007. Despite difficult selling conditions, the Company expects to achieve its projected growth primarily through prudent expense management.

Analysts were expecting $0.66. And to think, last month they seemed immune.

Small Cap Watch List (Track at Marketocracy) member Aeropostale (ARO):

Aeropostale, Inc. (NYSE: ARO), a mall-based specialty retailer of casual and active apparel for young women and men, today announced that total net sales for the four-week period ended May 5, 2007 decreased 9.8% to $75.4 million, from $83.6 million for the four-week period ended April 29, 2006. Same store sales for the month decreased 14.0%, compared to the corresponding four-week period ended May 6, 2006.

Julian R. Geiger, Chairman and Chief Executive Officer said, “While our results for the month reflect the negative effect from the shift in Easter, we remain very pleased with our performance for the first quarter, particularly the combined March and April period in which we generated a 2.6% comparable store sales increase. During the month we continued to control both the depth of our promotions and level of our inventory. Accordingly, we were able to maintain the positive trend in our gross margins and we are on track to end the quarter with earnings above our previously issued guidance. We also remain well positioned for a smooth transition into the summer selling season.”

Based on the positive trend in gross margins for the month, the company updated guidance for the first quarter of fiscal 2007. The company now expects net earnings in the range of $0.24-$0.25 per diluted share, versus its previously issued guidance of $0.22-$0.23 per diluted share.

Analysts were expecting $0.23.

Large Cap Watch List (Track at Marketocracy) member TJX Companies (TJX):

Sales for the four-week period ended May 5, 2007, were $1.28 billion, up 2% over the $1.26 billion achieved during the four-week period ended May 6, 2006. For the thirteen weeks ended May 5, 2007, sales reached $4.2 billion, a 7% increase over last year’s $3.9 billion. Consolidated comparable store sales for the four-week period ended May 5, 2007, decreased 1% versus last year.

Carol Meyrowitz, President and Chief Executive Officer of The TJX Companies, Inc., stated, “Comparable store sales results in April were below our expectations, which we attribute to the unseasonably cold and wet weather across most regions of the country during the first half of the month. That said, when the weather warmed up during the second half of the month, customer demand for spring apparel accelerated significantly and comparable store sales ran ahead of our plan. Furthermore, despite April’s unseasonable weather, comparable store sales for the combined March/April period, which includes the Easter holiday, were up 3%, which was in line with our plans.”

All in all a mixed bag, with lots of things on which to blame any missteps.

Small Cap Watch List (Track at Marketocracy) member Aeropostale (ARO) reported strong March sales and upped their guidance.

Aeropostale, Inc. (NYSE: ARO), a mall-based specialty retailer of casual and active apparel for young women and men, today announced that total net sales for the five-week period ended April 7, 2007 increased 31.5% to $124.8 million, from $94.9 million for the five-week period ended April 1, 2006. Same store sales for the month increased 15.9%, compared to the corresponding five-week period ended April 8, 2006.

While the Company said they saw a benefit to comparable store sales in March due to the early timing of Easter, they also raised guidance for the quarter, which ends in April:

The company now expects net earnings in the range of $0.22-$0.23 per diluted share, versus its previously issued guidance of $0.19-$0.21 per diluted share. This compares to net earnings of $0.15 per diluted share in the first quarter last year.

Mid Cap Watch List (Track at Marketocracy) member Abercrombie & Fitch (ANF) also reported strong results, and said nothing whatsoever about Easter:

Abercrombie & Fitch (NYSE: ANF) today reported net sales of $331.2 million for the five-week period ended April 7, 2007, a 29% increase over net sales of $256.7 million for the five-week period ended April 1, 2006. March comparable store sales increased 7% for the five-week period ended April 7, 2007, compared to the five-week period ended April 8, 2006. Total Company direct-to-consumer net sales increased 47% to $17.7 million for the five-week period ended April 7, 2007, compared to the five-week period ended April 1, 2006.Year-to-date, the Company reported a net sales increase of 20% to $537.8 million from $449.5 million last year. Comparable store sales increased 1% for the year-to-date period. Year-to-date, total Company direct-to-consumer net sales increased 41% to $29.8 million.

By contrast, Target said yesterday that while March results were very strong, it expects sales at its stores open at least a year to decline 2 percent to 4 percent in April due to the earlier timing of Easter.

Today it was Cato (CTR) and others saying March sales were favorably impacted by the shift of Easter to April 8 this year versus April 16 last year, while April sales are expected to be unfavorably impacted by this shift.

So, are teen retailers insulated from Easter fluctuations or are the other companies just using Easter as an excuse?

With the end of the first quarter approaching, it is time to adjust the names in our Watch Lists. We will price all the new lists as of the close on Friday, March 30. Today we present our planned updates to the Large Cap Watch List (Track at Marketocracy).

Though less than the Small Cap Watch List and Mid Cap Watch List (Track at Marketocracy), there was still relatively high turnover in this list. 14 of the original 33 names made the cut for the new list (which was trimmed to just 26 names.) Part of the reason for the turnover was to reduce overlap between the lists. One third of the Mid Cap Watch List (Track at Marketocracy) names appear on each of the Small Cap and Large Cap Watch List (Track at Marketocracy)s, but there is no longer any overlap between small and large.
So without further ado, the names on the chopping block from the previous list are:

3M (MMM); Continental (CTTAY.PK); Mitsui (MITSY); Anheuser-Busch (BUD); ConocoPhillips (COP); Helix Energy (HELX); IndyMac Bancorp (NDE - Annual Report); Barr Pharmaceutical (BRL - Annual Report); Quest Diagnostics (DGX); Public Storage (PSA); ITT Educational Services (ESI); Equifax (EFX); Rent-a-Center (RCII); Kroger (KR); Ricoh (RICOY); First Data Corp. (FDC); Expeditors International (EXPD); and Keyspan (KSE).

The new list is:

With the end of the first quarter approaching, it is time to adjust the names in our Watch Lists. We will price all the new lists as of the close on Friday, March 30. Today we present our planned updates to the Mid Cap Watch List (Track at Marketocracy).

As with the Small Cap Watch List (Track at Marketocracy), we were surprised at the amount of turnover in our screens. Only 7 of the original 29 names made the cut for the new list (which comes in at only 24 names.) Part of the reason for the turnover was to reduce the overlap between the Small Cap and Mid Cap Watch List (Track at Marketocracy)s. Now there is only one-third overlapping names rather than two thirds. Furthermore, given the level of outperformance we saw in the first quarter (actually just two months) and the fact that much of those gains were achieved early, perhaps the turnover is warranted.

So without further ado, the names on the chopping block from the previous list are:

Silgan Holdings (SLGN - Annual Report); Middleby (MIDD); Olin (OLN); Vector Group (VGR); Sanderson Farms (SAFM); Tesoro (TSO); Downey Financial (DSL); Waddell & Reed (WDR); Gamco (GBL); Apria Healthcare (AHG); Quest Diagnostics (DGX); ITT Educational Services (ESI); Equifax (EFX); Delhaize Group (DEG); Papa John’s (PZZA); Rent-a-Center (RCII); Cato Corp (CTR); Dassault Systemes (DASTY); Ingram Micro (IM); Energy East (EAS); South Jersey Industries (SJI - Annual Report); and American States Water (AWR).

The new list is:

Its a good thing Mid Cap Watch List (Track at Marketocracy) and Large Cap Watch List (Track at Marketocracy) member Abercrombie & Fitch’s (ANF) management won’t have to worry about claims they breached their fiduciary duties, because they’re going to be busy explaining their outlook to investors for a couple of days. according to the company, here are its Fourth Quarter Highlights:

• Total Company net sales increased 18% to $1.139 billion; comparable store sales declined 3%, versus a 28% increase for the fourth quarter of Fiscal 2005
• Abercrombie & Fitch net sales increased 6% to $504.0 million; Abercrombie & Fitch comparable store sales decreased 6%, versus an 18% increase for the fourth quarter of Fiscal 2005
• abercrombie net sales increased 19% to $144.5 million; abercrombie comparable store sales increased 2%, versus a 59% increase for the fourth quarter of Fiscal 2005
• Hollister Co. net sales increased 33% to $476.8 million; Hollister Co. comparable store sales were flat to last year, versus a 34% increase for the fourth quarter of Fiscal 2005
• RUEHL net sales increased 89% to $13.4 million; RUEHL comparable store sales increased 6%, versus an 18% increase for the fourth quarter of Fiscal 2005
• Net income for the fourth quarter increased 20% to $198.2 million from $164.6 million in Fiscal 2005
• Net income per diluted share increased 19% to $2.14 in the fourth quarter of Fiscal 2006 from $1.80 in Fiscal 2005

Total comparable store sales declining 3% hardly seems a highlight - particularly since the fourth quarter and full year benefitted from an extra week of sales compared to the prior year, but we’ll go along with it as the results pretty much exactly matched expectations - as well they should given the fact that the monthly sales reports should have steered analysts in pretty much the right direction. We admire Abercrombie for not dumping these progress reports while the going is tough.

So, since the analysts were able to pinpoint revenue and earnings with laser-like accuracy, it must be the guidance that is sending the shares down after hours:

The Company expects net income per diluted share for the first half of Fiscal 2007 to be in the range of $1.47 to $1.52, representing between 10% and 13% earnings growth over the first half of Fiscal 2006. Due to the impact of the Company’s London pre-opening store costs, along with the difficult comparisons to last year’s tax rate favorability, diluted earnings per share growth in the first quarter of 2007 is expected to be in the mid-single digit range. The low end of the earnings guidance reflects a flat comparable store sales scenario for the first half of Fiscal 2007.

Consensus estimates called for low double-digit EPS growth in the first quarter rather than mid-single digit.

Ah, those press releases issued after everyone’s gone home for a holiday weekend. In this case, it comes from Mid Cap Watch List (Track at Marketocracy) and Large Cap Watch List (Track at Marketocracy) member Abercrombie & Fitch (ANF).

It seems some shareholders filed suit in October 2005 claiming present and former directors breached their fiduciary duty, including:

allegations that the defendants permitted the Company to make false or misleading public statements, certain defendants (including Mr. Jeffries) sold shares of common stock of the Company while in possession of material non-public information and the defendants caused or permitted the Company to engage in certain discriminatory behavior.

The Board of Directors established a Special Litigation Committee to determine whether the company should pursue the claims made against its directors and officers. Apparently the deadline for the report was the Friday afternoon before President’s Day and the report came in just under the wire.

They recommend that the company not pursue the claims. You can read the full release here.

We asked, but no one answered. So we are taking our own counsel and breaking our Watch List into three portfolios: Small Cap, Mid Cap and Large Cap. Each will be tracked against the relevant S&P index going forward from their collective inception date of January 31 (priced at the close of market trading that day.)

For your viewing pleasure, the Large Cap Watch List (Track at Marketocracy) (to be measured against the S&P 500) follows.

Astute observers will notice less overlap between this watch list and the names in the Small Cap Watch List and Mid Cap Watch List. This was not for lack of overlap, as the smallest S&P 500 name has a market capitalization of $600 million, which would allow for complete overlap with the Mid Caps if we chose. Instead we selected an arbitrary low of $2 billion for large-cap names, which cuts off five names that are actually in the S&P 500.
In addition, we will provide a “quick and dirty” analysis of each name, with a goal of one such analysis per day. As the name implies, the quick and dirty analysis will be incomplete. We are hoping you will join in the debate and fill the gaps in our analysis.