Shop Talk

Retailers, consumers and prices

Check Out Line: Hitting an easy Target

May 20, 2009

USA/Check out Target maintaining retail margins.
 
That counts as a win in retail these days. The discounter was able to better manage markups and markdowns than last year, helping it keep gross margin steady, even though consumers are spending more on less profitable staples and less on discretionary items.
 
The company soundly beat analysts earnings estimates for the quarter. But profit still fell 13.3 percent in the quarter, not necessarily a good thing when you are in a proxy fight with an activist investor.
 
The story from Target was the same as the story from most retailers during this recession. Sales are sluggish or falling, they are controlling inventories and trying to rein in expenses.
 
AnnTaylor had the same story and reported a smaller-than-expected loss.
 
But it’s outlook was also cautious as the recession keeps women from buying work clothes and luxury apparel.
 
The question is, if consumers keep on the sidelines, how much more cost cutting can retailers do to limited the bleeding.
 
Also in the basket:
 
Tween brands posts narrower-than-expected Q1 loss
 
BJ’s Wholesale profit tops view; forecast raised
 
Sodas a tempting tax target (N.Y. Times)

(Reuters photo)

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