Retail sales reports are out today, and for my Watch List companies they don’t look so hot.

Small Cap Watch List (Track at Marketocracy) member Big Five Sporting Goods (BGFV):

For the fiscal 2007 second quarter, net sales increased $6.0 million, or 2.9%, to $217.8 million from net sales of $211.8 million for the second quarter of fiscal 2006. Same store sales declined 0.2% for the fiscal 2007 second quarter, representing the Company’s first quarterly decrease in same store sales in over eleven years. The Company now expects earnings per diluted share for the fiscal 2007 second quarter to be in the range of $0.23 to $0.26, compared to previously issued earnings guidance of $0.25 to $0.33 per diluted share.

Mid Cap Watch List (Track at Marketocracy) member Abercrombie & Fitch (ANF) was slow, but at least improved from the dismal performance of recent months:

June comparable store sales increased 2% for the five-week period ended July 7, 2007, compared to the five-week period ended July 8, 2006.

Other signs are pointing to the consumer slowdown extending beyond just housing-related stores. The consumer was the last leg in the economy’s stool, so businesses had better take up the slack or we could be in for more of a slowdown than we already have.

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.

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 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:

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 Small Cap Watch List (Track at Marketocracy).

Frankly, we were surprised at the amount of turnover in our screens. Only 9 of the original 29 names made the cut for the new list (which comes in at only 24 names.) Still, 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); Steel Dynamics (STLD - Annual Report); NVR (NVR - Annual report); Middleby (MIDD); Vector Group (VCG); Sanderson Farms (SAFM); Downey Financial (DSL); Waddell & Reed (WDR); Wilshire Bancorp (WIBC); Harrington West (HWFG); Gamco Investors (GBL); Apria Healthcare (AHG); Papa John’s (PZZA); Cato Corporation (CTR); Meredith Corporation (MDP); CSG Systems (CSGS); Energy East (EAS); Dynamics Research (DRCO); Ingram Micro (IM); and Dade Behring (DADE).

The new watch list will be:

Small Cap Watch List (Track at Marketocracy) and Mid Cap Watch List (Track at Marketocracy) member Cato Corporation (CTR) reported earnings of $0.40 for the fourth quarter and $1.62 for the full year on $862.8 million in sales. While the EPS results compare favorably to consensus estimates of $0.36 for the quarter and $1.57 for the year, management notes that the company benefitted from several one-time items – not the least of which being an extra week of sales:

Similar to other retailers that use the National Retail Federation 4-5-4 calendar, the Company’s fiscal year 2006 included 53 weeks as compared to 52 weeks in 2005. During the year the Company received an insurance settlement related to hurricanes in the southeast in 2005 and a settlement related to excess credit card service fees the Company paid over a number of years. The after-tax effect of these items was an additional $3.0 million in net income or $.10 per diluted share.

Seen in context, then, the results look like a “miss,” particularly when the consensus revenue estimate of $870 million for the year is factored in. Guidance falls short of the $1.68 currently expected by analysts:

Due to the one-time items noted above and a return to a 52-week year, the Company expects 2007 to be a more challenging year for earnings growth. The Company estimates that 2007 net income will be in a range of $51.5 million to $53.3 million, a flat to 3.5% increase over 2006, or $1.60 to $1.66 per diluted share. This estimate reflects a 1% to 3% comparable store sales increase over 2006.

The company expects to open 90 new stores this year and close 15 existing ones. The latter number appears oddly specific given that “at this time, no stores have been identified for closure.” We say if they can’t figure out which stores are doing so poorly they need to be closed it’s no wonder the company is missing earnings.

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 Mid Cap Watch List (Track at Marketocracy) (to be measured against the S&P 400) follows.

Astute observers will notice a significant overlap between the names in the Small Cap Watch List and this one. In fact, of the 29 names on the Small Cap Watch List (Track at Marketocracy), 19 are included among the 29 names in the Mid Cap Watch List (Track at Marketocracy). The main reason is that we ran our screens against the criteria in the relevant indices rather than the names in the indices. Since the largest market cap in the S&P Small Cap is $3.5 billion and the smallest market cap in the S&P Mid Cap is $600 million, there is room for a good deal of overlap if one is willing to accept it.

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.

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 Small Cap Watch List (Track at Marketocracy) (to be measured against the S&P 600) follows.

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.