Shop Talk

Retailers, consumers and prices

Check Out Line: It was the best of times, it was the worst of times…

October 27, 2009

tugofwar1Check out the tale of two cities in the retail world.

We are in the heart of the earnings season and every day brings reports that offer grist for both sides of the argument about whether the recovery has begun.

For the optimists, we have sports clothing and footwear maker Under Armour, which posted a stronger-than-expected quarter and raised its outlook, and yoga clothing and athletic gear maker Lululemon Athletica, which raised its forecast.

Meanwhile, DineEquity, home of the Rooty Tooty Fresh ‘N Fruity breakfast at IHOP, topped Wall Street’s expectations due to lower costs, and better sales and more efficient staffing allowed outdoor gear retailer Cabela’s to post stronger-than-expected earnings.

On the other side of the tug-of-war, pessimists can point to VF Corp. The maker of such brands as the North Face, Vans, Wrangler and Lee missed analysts’ expectations and said consumer spending would remain challenged.

Meanwhile, Winn-Dixie posted a wider loss and gave a weak 2010 outlook as recession-hit consumers shopped for fewer items on visits to the supermarket chain, and Limited Brands, the operator of the Victoria’s Secret and Bath & Body Works chains, warned that its October sales are trending below expectations.

The market weighed in as S&P 500 index futures edged higher on Tuesday as better-than-expected earnings offset worries that the market’s seven-month rally was reaching its end.

Also in the basket:

PepsiCo wins EU approval to buy two bottlers

Analyst: Store Closures Predicted to Peak in ’10 (WWD, subscription required)

Men’s Wearhouse to spiff up K&G stores (New York Post)

(Reuters photo)


I used to like the Rooty Tooty Fresh ‘N Fruity breakfast, but before going to IHOP again, my family and I are keeping in mind that the company has been exposed for animal cruelty and food safety in its supply chain. For more details, check out:

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