Retail Winners & Losers: Macy's, Bebe

NEW YORK (TheStreet) -- Retail shares are rallying a day after the sector saw its highest sales gain since June 2008.

One of the biggest gainers is Macy's (M), which is climbing by 5.9% to $19.09 in afternoon trading. The department store was upgraded by J.P. Morgan to overweight from neutral on a second month of improving sales.

On Thursday, the company posted a 0.8% decline in October same-store sales, as it begins to benefit from its national roll-out of its My Macy's localization initiative.

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Saks (SKS) is also gaining ground, up 3.9% to $6.13, after it announced that comparable sales for the month inched up 0.7%, significantly higher than the 3.6% decline Wall Street forecast.

Meanwhile, CVS Caremark (CVS) is regaining some of its massive loss from yesterday, when it reported that it lost $2 billion worth of business in its pharmacy benefits-management unit.

The drugstore also said the Federal Trade Commission is investigating some of its business practices.

Thus, despite a 39% surge in third-quarter profit, shares in CVS still tanked 20% on the news. Today, however, they are growing slightly, up 2.8% to $29.69.

Whole Foods Market (WFMI)vis rising, by 4% to $28.19, after shares tumbled earlier this week when it reported a modest sales forecast for 2010. And while CEO John Mackey said sales turned the corner and are starting to improve, his forecast of a gain of just 5% to 8% didn't impress investors.

Other notable gainers included home furnishing retailers Lowe's (LOW) and Home Depot (HD), which are set to report earnings on Nov. 16 and Nov. 17, respectively. Lowe's is jumping 4.3% to $20.94, while Home Depot is up 2.2% to $26.18.

Amazon (AMZN) is also climbing, by 4.6% to $126.18, in afternoon trading.

But there were also some losers following the sales report. Fred's (FRED) is tumbling 3.3% to $28.56 after it reported same-store sales that missed expectations.

The discounter said October comparable sales rose just 0.4%, below the 1.3% jump analysts forecast.

As a result, the company was downgraded on Friday by Webush Morgan to underperform from neutral.

Likewise, Bebe (BEBE) is in the red after it announced that it swung to a loss in its first quarter on significantly lower sales.

During the quarter, the specialty retailer lost $4.2 million, or 5 cents a share, compared with a profit of $11.2 million, or 12 cents, in the year-ago period. Revenue tanked 23% to $125.7 million, as same-store sales plunged 25.7%.

Shares of Bebe are stumbling 8.9% to $5.95 in afternoon trading.

-- Reported by Jeanine Poggi in New York

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