Retailers, consumers and prices
Alberto Culver, the maker of VO5 shampoo and Mrs. Dash seasoning, said its third-quarter profit, excluding one-time items was 30 cents a share, a penny above what analysts had expected, thanks to strong demand for its TRESemme shampoo.
Cigarette maker Lorillard earned $1.71 a share in its second quarter, easily topping the $1.43 Wall Street was expecting, as it boosted prices and its market-share. It also OK’ed a new $750 million stock-buyback plan.
Electronics retailer RadioShack’s second-quarter profit was 39 cents a share — 10 cents above forecasts — on lower costs and improved sales of netbooks, prepaid wireless handsets and digital TVs.
Check out the expected weak back-to-school shopping season predicted by America’s Research Group and UBS.
U.S. consumers will spend 8.5 percent to 12 percent less this year on back-to-school items than they did last year as cash-strapped parents try to get their kids to don last year’s fashions again, according to a survey by America’s Research and UBS. Back-to-school sales fell 5 percent last year.
Parents plan to spend less money on back-to-school gear for their children this year in another worrisome sign for retailers heading into what is normally their second biggest selling period behind Christmas.
The average family with children in kindergarten through 12th grade is expected to spend $548.72 on back-to-school merchandise this year, down 7.7 percent from 2008, according to the National Retail Federation.
Check out the expected June sales declines at U.S. retailers.
Cooler and wetter weather made things tough for companies, especially those selling summer products in the first three weeks. Overall same-store sales for the month are expected to be down 4.8 percent, according to Thomson Reuters.
“The consumer is still up against too many hurdles to be spending too much money,” Storehouse Partners retail analyst Patricia Edwards said.
Check out June same-store sales at drugstore chains.
Walgreen Co and Rite Aid both reported sales at stores open at least a year, pointing to shoppers filling more prescriptions but buying less discretionary summer merchandise. Walgreen said same-store sales in June rose 3.4 percent, while smaller rival Rite Aid saw sales slip 0.6 percent.
Economists and analysts had previously pointed to signs the recession may be nearing an end, but the news is still mixed as the number of jobs cut in June was higher than expected and the unemployment rate rose to 9.5 percent.
Check out the welcome warm weather.
The long anticipated arrival of warm weather helped boost U.S. consumer spending 1.6 percent in the week that ended June 27, from a week ago – the strongest gain since matching its Jan. 31 results, according to a stody by the International Council of Shopping Centers and Goldman Sachs.
On a year-over-year basis, sales rose 0.6 percent.
“A bout of seasonally hot weather late in the week helped to trigger consumer spending,” ICSC chief economist Michael Niemira said in a statement. “This late June sales spark was a welcome sign for the industry and the economy. ”
However, he added, ”for the month as a whole, June sales continue on track for a ‘tough’ month with the early part of the month weighing heavy on its performance.”
Excluding Wal-Mart Stores, which has stopped reporting monthly sales, the ICSC expects June sales to be down by about 5 percent.
Check out the lower level of planned frugality among consumers.
While 52 percent of consumers making less than $35,000 plan to cut back on dining out, that is down from the 72 percent who had such plans last fall, according to a survey by Information Resources Inc.
IRI found most consumers plan to spend less on summer vacations, cook at home more and eat out less often.
While job losses still weigh heavily on the minds of cash-strapped Americans, U.S. consumer confidence rose to a nine-month high in June, the third consecutive month it had reached a new high, a survey showed today.
The Reuters/University of Michigan Surveys of Consumers said its preliminary index of confidence for June rose to 69.0 from May’s 68.7. Economists had expected 69.5, while last September the score was 70.3.
Chief executives from Burberry Group, Hermes, Tiffany, Rolls-Royce and Richmont’s Van Cleef & Arpels are among the many officials who will speak this week at Reuters’ first-ever Global Luxury Summit about what their sector is facing amid a recession that has even well-heeled consumers dialing back spending.
In a new report, Bain & Co predicts sales of luxury goods are expected to drop 10 percent this year and not recover fully until 2012.
On a scale of 0 to 100, where 100 is “very confident,” general economic perception of consumers fell to 36.7 in February from 38 in October, according to a survey by retail research firm NPD Group. The survey uses online answers from 1,000 people each month.
On the heels of worries over the economy, consumers’ intentions to shop also weakened. NPD’s study showed a more than five-point drop to 35.4 in February, compared to 40.7 in October.