Dhanya Skariachan

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Check Out Line: A mixed bag of consumer news

May 4, 2010

Mixed bag

Check out a mixed bag of results from the consumer world.

Investors looking for yet another clue to gauge the strength of the U.S. consumer spending recovery might find some solace in online retailer Overstock’s results and women’s apparel retailer Ann Taylor’s strong first-quarter outlook.

Overstock, which sells excess inventories of clothing, accessories, furniture and other items, recorded a 42 percent rise in quarterly sales, while Ann Taylor forecast a same-store sales rise of 11 percent in its latest first quarter.

“Consumers are back in the malls and outlet centers…They are being lured to spend on nonessential goods by pre-planned promotions from retailers and greater confidence in their economic well-being,” Wall Street Strategies’ Brian Sozzi summed it up.

The U.S. consumer is certainly warming up to spending on more than essentials and maybe a tad more comfortable replenishing their wardrobes with news of an improving economy floating around. But just how far will they go? Will we see a simultaneous improvement in all sectors of retail?

Judging by the latest crop of results from the restaurant world, maybe not.

Revenue at DineEquity Inc fell 4.7 percent to $358 million as IHOP’s domestic systemwide same-store sales fell 0.4 percent in the first quarter, while those at Applebee’s fell 2.7 percent.

The results from pizza maker Domino’s Pizza also failed to impress investors and dragged down shares of other pizza sellers.

Also in the basket:

CVS Caremark profit rises, year view brightened

Molson Coors profit misses estimates

Adidas gets a kick out of FIFA World Cup, Reebok

Reuters Photo

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