Before the bell: Futures up on oil, Verizon's possible deal, retail sales

Starting with an aggregate of recent airlines news:

Continental Airlines (NYSE: CAL) said it would cut 3,000 of its 45,000 jobs, about 6.5%, and cut capacity 11% in the fourth quarter. The company will eliminate 67 planes and the company's chief executive and president say they will not take a salary for the rest of this year and will decline bonuses.

Delta Airlines (NYSE: DAL) May traffic rose 4.2% from the year-earlier month to 10.51 billion revenue passenger miles. Delta's May capacity increased 1.5% to 12.67 billion available seat miles. Load factor, or the percentage of seats filled with passengers, in May rose to 82.9% from 80.9%.

US Airways Group Inc. (NYSE: LCC) said its May mainline traffic rose 0.6% to 5.39 billion revenue passenger miles from last year. May mainline capacity was flat at about 6.54 billion available seat miles. Mainline load factor in May rose to 82.3% from 81.9% a year ago. It also said Wednesday it is cutting up to 1,100 more jobs, about 3% of its workforce.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Aeropostale Inc. (NYSE: ARO) posted strong Q1 results on increased same-store sales.
• Analog Devices Inc. (NYSE: ADI) reported solid Q2 results and raised its Q3 guidance.
• BMC Software Inc. (NYSE: BMC) Q4 results beat estimates and it raised its full-year guidance.
• Charming Shoppes Inc. (NASDAQ: CHRS) posted a Q1 loss its worst sales decline in years.
• Ford Motor Co. (NYSE: F) warned that it doesn't expect 2009 profit despite some strength overseas.
• Gymboree Corp. (NASDAQ: GYMB) reported strong Q1 results due to higher retail sales.
• Hormel Foods Corp. (NYSE: HRL) posted solid Q2 results that beat Wall Street estimates by a penny.
• Intuitive Surgical Inc. (NASDAQ: ISRG) warned that it might not meet expectations for 2008.
• Limited Brands Inc. (NYSE: LTD) disappointing Q1 results were offset by a one-time sale of an asset.
• PetSmart Inc. (NASDAQ: PETM) posted weak Q1 results that beat estimates, and offered weak guidance.
• Salesforce.com Inc. (NYSE: CRM) reported strong Q1 results that led to analyst upgrades.
• Talbots Inc. (NYSE: TLB) restructuring costs and soft same-store sales dragged down Q1 earnings.
• Toro Co. (NYSE: TTC) Q2 profits and revenues declined but beat low expectations of analysts.

Additional earnings highlights:
Home Depot, Gap, Lenovo, Air France, Activision, Suntech and others
Hewlett-Packard, Target, Barnes & Noble, Campbell, Staples and others

Upcoming results to watch for include Borders (NYSE: BGP), Polo Ralph Lauren (NYSE: RL), TiVo (NASDAQ: TIVO), Big Lots (NYSE: BIG), Costco (NASDAQ: COST), Dell (NASDAQ: DELL), HJ Heinz (NYSE: HNZ), Sears (NASDAQ: SHLD), Lions Gate (NYSE: LGF), and Tiffany (NYSE: TIF).

Visit AOL Money & Finance for more earnings coverage.

First quarter results for apparel retailers reporting earnings on Wednesday were mixed, as consumers continue to scale back their spending.

Talbots Inc. (NYSE: TLB) first-quarter profit dropped 69% to 3 cents per share, hurt by noncore operations and restructuring charges. Same-store sales fell 9.8% during the quarter, and revenue fell 5% to $542.4 million, which missed the estimates of analysts polled by Thomson Financial. Shares rose 6% Wednesday to $7.88.

Hot Topic Inc. (NASDAQ: HOTT) first-quarter loss widened to 3 cents per share due to a 2.8% drop in same-store sales. Revenue rose 1.1% to $159 million. Analysts had expected a loss of 4 cents per share on $159.3 million in revenue. Shares fell 13 cents, or 2.6%, to $4.84.

Tween Brands Inc. (NYSE: TWB) first-quarter profit declined on a hefty charge, but results still topped Wall Street expectations. Adjusted earnings per share were 21 cents, and revenues rose to $251.7 million. Analysts had expected 16 cents in earnings per share and sales of $242 million. Total same-store sales decreased 1%. Shares fell more than 10% to $19.20, but rebounded 7.5% in after-hours trading.

General Motors (NYSE: GM) reached an agreement with workers at its Kansas City, Kan., assembly plant Tuesday that could help it end a string of labor problems. The deal could end the strike of 2,500 workers at the factory, which makes the hot-selling Chevrolet Malibu as well as the Saturn Aura, since May 5.

Barnes & Nobel (NYSE: BKS) is exploring a possible bid for rival Borders (NYSE: BGP), according to a report in the Wall Street Journal.

Reporting today: Limited Brands Inc. (NYSE: LTD) which is forecast to post earnings of 8 cents a share in the first quarter and Salesforce.com Inc. (NYSE: CRM), which is forecast to post earnings of 7 cents a share in the first quarter among other companies.

Before the bell: Stocks could bounce back; retail sales, TM, BBY on tap

Unilever (NYSE: UL) is the world's second-largest maker of food and detergent, so you would expect the company to hurt with rising commodity prices. But Unilever has been proactive and has raised prices 4.8% in the quarter to offset its rising costs. In fact, the company said revenue will beat its forecast for the first time in six years on increased prices and sales of Dove soap, Hellmann's mayonnaise and Lipton tea. First-quarter net income climbed 33%, exceeding analysts' estimates.

As expected, April retail sales have so far indeed been strong, although there are some ares weakness is seen.

• Costco (NASDAQ: COST) shares are up 1.2% in premarket trading after the warehouse club retailer said April same-store sales increased 8%, beating analysts' expectations of 6.1%.
• Wal-Mart Stores Inc. (NYSE: WMT) shares are also higher in premarket trading, up 1.8%, after the world's largest retailer, said same-store sales climbed 3.2%, beating the 2.1% forecast by analysts. Staying with Wal-Mart for a moment, it said it plans to invest millions in Canada and open more supercenters.
• The more luxurious items, though, such as lingerie sold at Limited Brands (NYSE: LTD) have seen a slowdown as the company said that April same-store sales fell 5%, falling short of the 2.3% sales decline analysts had anticipated.

A few years back, The Onion ran a spoof article in which it claimed that Microsoft was trying to copyright ones and zeros, in an attempt to corner the market on binary code. Of course, the problem with satire is, just when you think you've hit the jackpot on ridiculousness, reality trumps you.

Recently, Juicy Couture Inc. filed a lawsuit against Victoria's Secret, claiming that the lingerie giant had stolen many of its marketing gimmicks and design features. Among other things, Juicy stated that Victoria's Secret had copied:

• Juicy's packaging, which resembles candy (Lingerie disguised as candy?!? Didn't Spencer's Gifts come up with this idea somewhere around 1978?).
• Juicy's most popular color scheme, which revolves around the color pink (Pink? For girls? Clearly, Juicy's designers are underappreciated revolutionaries!).
• Juicy's most popular design, in which its logo is emblazoned across the backside of the wearer (I wonder if Juicy's next step will be to go after all the lower-back tattoo wearers out there. Tramp-stampers, beware!).

While Victoria's Secret (a subsidiary of Limited Brands, Inc.: NYSE: LTD) may well be guilty of plundering the ideas of others (in particular, Katerina Plew, whose lawsuit seems to have a little more merit), it seems like Juicy is getting a little ridiculous. Intellectual property is all well and good, but is it legitimate to copyright the color pink?

Still, as a luxury item, lingerie is probably not selling all that well right now. Maybe Juicy needs the dough?

With recession fears, housing market worries and credit concerns, retailers have been facing tough times, especially during the holiday winter season of December and January when sales came with weak numbers. But on the heels of these disappointing results, retailers got a beam of hope as February's sales numbers showed a surprising increase.

Encouraging news for retailers showing a rebound in consumer spending during the past month came after world's largest retailer Wal-Mart Stores Inc. (NYSE: WMT) announced a rise of 2.6% for its February same-store sales. The company said that its same-store sales during the period were helped by strong gains from gas, food and flat-panel TVs. Analysts were expecting the retailer show an increase of 1.1% for its same-store sales, according to Thomson Financial.

Among other retailers that showed a rebound in February sales were Costco Wholesale Corp. (NASDAQ: COST) and Saks Inc. (NYSE: SKS), both of which reported stronger-than-expected gains. Apparel retailers Pacific Sunwear of California Inc. (NASDAQ: PSUN) also reported earnings results exceeding estimates of 6% sales growth last month.

For Limited Brands Inc. (NYSE: LTD), though, February didn't come with positive results. The company stated that higher energy and food prices put pressure on consumers who focused on necessities.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.

Before the bell: Futures decline with the dollar (HRB, MOT, UBS)

Wal-Mart Stores Inc. (NYSE: WMT) shares are trading over 1.1% higher in premarket trading after the discount retailer reported that same-store sales rose 2.6% in February due growth in grocery, electronics and health items. Analysts expected a 1.1% increase according to Thomson Financials. The overall weak sales trend, however, continued into February and shows no sign of improvement.

While discount retailers and wholesale clubs expected to do better, most retail stores were expected to do worse. For example, specialty retailer Limited Brands Inc. (NYSE: LTD) reported that same-store sales fell 9% in February, a smaller drop than the 11% analysts were expecting. While sales fell 10% at Victoria's Secret, they rose 1% at La Senza. Total sales fell 16% and the company expects March to show much the same results.

Meanwhile, Thornburg Mortgage Inc. (NYSE: TMA) is dropping over 58% in premarket trading after it disclosed Wednesday that it failed to meet a $28 million margin call, causing a series of cross-defaults.

In a short story in the Wall Street Journal [subscription required], Sharen Turney, chief executive of of Victoria's Secret, confided during a conference call that the lingerie chain may have gotten off track at some point and may now be just too sexy.

Can there be such a thing as too sexy? There are times you can be too trashy, or too slutty, but can you be too sexy? I think not!

It may be that some of the advertisements on television are inappropriate for the time-slot. It may be that at times the ads are viewed like soft porn and teenage boys are the first to peruse the monthly mailing. But too sexy? That is a very strange comment coming from a company that has made a reputation for itself and pushed sales growth for years based on a foundation of sex appeal.

The Victoria's Secret chain is a division of the Limited Brands Inc. (NYSE: LTD) and Turney said she wants to bring a more sophisticated image back to the product line - hmm. I wonder if this is just a smoke screen to avoid criticism by conservatives in an election year.

• I can just hear the discussion in the board room: "There are some folks that think we have gone too far, and that we present an image that is just too darn sexy. All those in favor of being less sexy raise your hands"

This just does not seem possible, does it? LTD closed yesterday at $17.82 but is down over 9% in midday trading. Maybe Wall Street traders prefer more sexy, not less?

UPDATE: LTD closed at $15.85 down $1.87.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own shares of LTD.

"SEXY." The capital letters blared at me from the window of Victoria's Secret in Pioneer Place here in Portland. Next to the clean lovely windows of the Apple store, I felt I almost had to shield my eyes, to protect me from the glare. The mannequin dressed in a red bustier seemed more Elvira than Rebecca Romijn, the sweet face of Victoria's Secret when I was a loyal customer in my early 20s.

I'm not the only one turned off by the company's recent focus on sexy above all else. In rather shocking statements during this morning's Limited Brands Inc. (NYSE: LTD) analyst call, Victoria's Secret CEO Sharen Turney said the company has "gotten too much off our heritage" and was "too sexy," no longer the ideal "ultra-feminine."

With black lacquer and shocking pink decor, the "s" word thrown around like neon signs in a red-light district, and rather unsubtle displays, this isn't my mother's Victoria's Secret.

Limited (NYSE: LTD) closed at $17.82 Wednesday.

Bank of America says: "Q4 Beats on shares; Guidance implies a slow start to Q1."

LTD sells intimate apparel, personal care, women's clothes and beauty products through Limited, Limited Express, Victoria Secret & Bath & Body works. LTD reported operating income of $621 million. LTD says: "now expects February comps in the negative low double digit range verses its previous guidance for negative mid to high single digit comps."

LTD March option implied volatility of 48 is above its 26-week average of 42 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Abercrombie & Fitch Co. (NYSE: ANF) recently opened Gilly Hicks, a provider of women's undergarments like no other.

"The shop, which contains upper-end lingerie, loungewear and intimate accessories, is modeled after a British manor, with columns at its doorways, dark wood paneling and close to a dozen rooms, such as a `bra library' featuring more than 40 styles," according to the Wall Street Journal (subscription required). The company plans to open as many as 15 other Gilly Hicks outlets this year, the paper said.

Abercrombie & Fitch continues to walk the fine line between sexy and soft core porn with Gilly Hicks. The promotional video for the chain on its Web features half-naked and at times totally naked models of both sexes cavorting on a beach in what appears to be Australia. Gilly Hicks, according to the company's marketing department, emigrated from England to Australia in 1932 and opened an underwear store in her family's British colonial-style manor house in Sydney.

This 40-year-old married guy from New Jersey isn't sure if the message of the commercial is that our underwear is so comfortable that you will run around in it in front of total strangers in the beach. Apparently, the models didn't get the message that prolonged exposure to the sun can damage your skin.

MOST NOTEWORTHY: Level 3 Communications, BT Group and Limited Brands were today's noteworthy downgrades:

• Merriman downgraded shares of Level 3 Communications Inc (NASDAQ: LVLT) to Neutral from Buy, as they believe the risks outweigh the rewards until the company can complete its integration and turn FCF positive.
• BT Group Plc (NYSE: BT) was downgraded to Equal Weight from Overweight at Lehman to reflect the company's slowing revenue growth.
• Bear downgraded Limited Brands Inc (NYSE: LTD) to Peer Perform from Outperform, citing the unfavorable macro backdrop, execution issues and management turnover.

OTHER DOWNGRADES:

• Societe Generale lowered its rating on GlaxoSmithKline Plc (NYSE: GSK) to Hold from Buy.
• Morgan Stanley downgraded Cox Radio Inc (NYSE: CXR) to Equal Weight from Overweight.
• UBS dropped Anglogold Ashanti Limited (NYSE: AU) to Neutral from Buy.

With numerous retail stocks hitting multi-year lows and daily headlines about weak consumer spending, something is interesting is happening: The people who should know the most about these companies, the insiders, are buying their own stock at an unprecedented clip, reports Bloomberg.

Executives at Limited Brands (NYSE: LTD) and Dillards (NYSE: DDS) have been scooping up their own beaten-down stock. Executives at Foot Locker (NYSE: FL) and Chico's (NYSE: CHS) have also been significant buyers.

Is this a bullish signal? Perhaps. After all, it's been said that while CEOs sell their shares for all kinds of reasons, they only buy stock for one reason: they think it's going up. That's a pretty good maxim, but it can lead you astray in some cases.

Tonight could prove to be one of those rare times when men and women everywhere will not be fighting over what to watch on television as the nation tunes in to the 2007 Victoria's Secret fashion show. What will be slightly different this time around will be the importance that the show places on its Pink line, a collection of clothes aimed at the college and young teen crowd [subscription required].

Sales at Victoria's Secret have been struggling lately as a result of declining mall visitors, as well as a couple of nasty fashion mistakes at its stores. There has been one bright spot, however, the company's Pink line. The retail line includes items such as colorful underwear, pajamas, clothing and accessories, all aimed at a younger-than-traditional Victoria's Secret audience.

The retailer's parent company, Limited Brands Inc. (NYSE: LTD), has already posted a dismal 48% drop in net income for its third quarter, and has warned investors not to expect too much out of its fourth quarter results either.