Check out Macy’s disappointing fourth-quarter forecast.

Apparently, the Thanksgiving Day Parade may be the highlight of the quarter.

The department store chain operator forecast fourth-quarter profit below analysts estimates and its shares fell Wednesday morning.

The retailer also expects same-store sales to drop 1 percent to 2 percent in the quarter.  While that is less of a decline than the full year, it is also off a pretty easy comparison.  Same-store sales fell 7 percent in the year-earlier fourth quarter, when the country was waist deep in a recession and credit crunch.

Macy’s, which grew through acquisitions into a national brand, has shifted its focus to offering local items in specific markets in order to try to boost sales.

So far, that might have staunched the bleeding.  But most department stores are still out of favor as consumers stay at shops like Wal-Mart in order to save money.

But hey, Wal-Mart doesn’t have the cool balloons in Manhattan in November, does it?

Also in the basket:

Wal-Mart to offer $100 gift card on BlackBerry purchases

Flowers Foods Q3 sales miss estimates, cuts FY view

Best Buy’s international CEO to retire

Luxury brands step up expansion in China (WWD, subscription required)

(Reuters photo)

Check Out J.C. Penney’s new store in Manhattan.

On July 31, J.C. Penney will open its first Manhattan store in the midtown area, promising to deliver trendy yet affordable items for New York’s notoriously savvy shoppers.

Penney is taking direct aim at rival Macy’s, whose flagship Herald Square store is a block away.

In fact, the department store chain, which signed the lease for the space in December 2007 just as the U.S. slipped into recession, hopes the store will give its sales a much-needed boost and help it snag some of the city’s higher-income shoppers, just when they may need it most. 

“I think they will be glad to save some money too, don’t you, especially if they are bankers?” Penney District Manager Pete Sadler said during a walk-through of the store ahead of its opening later this month.

The store, located inside the Manhattan Mall at 34th Street, occupies a space that once included a food court.

The 153,000 square foot store is smaller than some other J.C. Penney stores and stocks merchandise ranging from women’s clothing and accessories to home goods. It has a Sephora makeup boutique, and fine jewelry store and will even deliver to people’s homes for a $15 charge.

Texas-based Penney is using the store opening to launch two exclusive brands — Joe by designer Joseph Abboud and Cindy Crawford Style home goods — as it tries to draw shoppers with the promise of affordable but special merchandise.

But even before the launch, the Joseph Abboud line was already on sale. Sadler was unsure why, but speculated that it could be in keeping with a storewide discount drive.

An opening event on July 31 will feature an appearance by Mayor Michael Bloomberg, fashion events and prize giveaways, Sadler said.

But for consumers who are not penny pinching that much, Nordstrom is planning to open its first Nordstrom Rack store in Manhattan’s Union Square next year.

Also in the basket:

Pepsico posts stronger-than-expected profit

Whirlpool beats views; cost cuts offset weak sales

Altria profit rises; beats Street view

Starbucks brews up profit beat

P&G drug unit closer to sale - (WSJ) 

(Photos/Reuters)

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.

Department stores and apparel chains are expected to post the worst drops at 9.4 percent and 5.1 percent, respectively, as consumers turn  thrifty and focus on essentials in the recession.

Meanwhile, in another bad sign for a recovery, delinquencies on credit card debt rose to an all-time high in the first quarter as a record number of cash-strapped consumers fell behind on their bills, according to the American Bankers Association.

Also in the basket:

Obama administration takes action on food safety

Walmex quarter seen strong despite recession

Canada’s Jean Coutu narrowly tops estimates

Retailers Do More With Less Inventory (WWD, subscription required)

Tight Squeeze: Making Room For a New Men’s Fashion (Wall Street Journal)

In a Downturn, Jewelers Aren’t So Precious (New York Times)

(Reuters photo)

Check out the October monthly sales results due this week.

Think of an adjective for “bad” and that pretty much describes Wall Street analysts’ current view for how the month shaped up. 

Retail chains, like Wal-Mart, Costco and J.C. Penney, will release October results on Wednesday and Thursday, and Thomson Reuters is forecasting a decline of 0.1 percent. 

“If the index actually comes in at -0.1 percent, this would be the weakest same-store sales result ever registered since Thomson Reuters began collecting estimates in 2000,” Thomson Reuters said.

Department stores and specialty retailers are expected to be the worst hit, mitigated only slightly by shoppers seeking bargains at discount chains or drugstores. 

“Most Americans have been caught like deer in headlights, not knowing what financial or economic disaster is around the corner,” Susquehanna Financial Group analyst Thomas Filandro wrote in a note. “More and more consumers are broadly pulling back, leaving the retailer with little choice other than to promote.” 

One positive for retailers in October was gas prices. The average price for a gallon of regular gasoline, which was $3.63 at the end of September, fell to $2.65 by the end of October, according to the Energy Information Administration.

Also in the basket:

ADM profit soars on higher prices; shares jump (Reuters)

InBev’s Budweiser purchase resolve put to the test (Reuters)

Madison Avenue Takes Hit From Economic Troubles (WWD, subscription required)

(Photo: Reuters)

Check out Coach opening stores.
 
The pricey leather handbag maker saw earnings fall in the quarter and also ratcheted down its sales forecast for fiscal 2009. But that sales forecast still calls for a 10 percent increase from a year ago.
 
And even in what some economists say is already a U.S. recession, the company is moving ahead with dozens of store openings and, in fact, those openings are ahead of the company’s plan, CEO Lew Frankfort said.
 
Coach plans to open 40 stores in this year in North America, 10 in Japan and five in China.
 
“Our new store openings are profitable from the first day,” Frankfort said in an interview. “All new stores are opening ahead of plan.”
 
And that isn’t just because it’s easier to get better terms from landlords as other retailers go bankrupt. Frankfort told Reuters the retail bankruptcies have had no near-term impact on Coach’s leasing arrangements, though the company should be able to get better terms over the midterm.
 
Like other retailers, Coach is also managing expenses. While there is not a hiring freeze, the company is tightly managing recruitment of new personnel through a “hiring frost,” Frankfort said.
 
Ahh, the first frost of the season. Can Christmas be far?
 
Also in the basket:
 
Ferragamo says uncertain on Q4, no IPO hurry
 
Brinker quarterly profit falls on weak demand
 
Owners say franchisers are passing on more costs (WSJ)
 
Fashion trends toward Obama in presidential race (WWD, subscription  required)
 
(Reuters photo)

Canadian fashionistas will now be able to order from Saks.com, as the luxury department store bids to snatch part of the estimated US$16 billion Canadian market for online retail goods.

This is the first time orders submitted on Saks.com will be shipped outside the United States, says Saks spokeswoman Julia Bentley.

“Being able to ship internationally has been a top priority for saks.com in 2008,” said Roger Scholl, VP of operations for Saks Direct, in a release.

Canadian online spending for retail goods in 2009 is forecast to grow 21 percent and total $16 billion, according to eMarketer.

U.S. fashion brands are looking outside the country to bolster sales during a challenging retail environment, encouraged by a wave of foreign shoppers that has buoyed profits.

(Photo/Reuters)

Check Out Macy’s opening up shop in Dubai.

Two Bloomingdale’s department stores are scheduled to open in the United Arab Emirates’ largest city in February 2010. Macy’s, which owns the Bloomingdale’s chain, says the store’s merchandise and upscale ambiance will be similar to Bloomingdale’s in the U.S., while being ”sensitive to local preferences and customs” of the oil-rich states.

In another sign the Middle East remains a robust market for foreign retail brands, Kuwaiti retailer Villa Moda is partnering with the Dubai International Financial Center, which is owned by the Dubai government. The DIFC is buying a majority stake in Villa Moda, which operates seven multibrand shops in the Gulf region and offers high-luxury brands such as Gucci, Prada and Dolce & Gabbana. 

The two Bloomingdale’s, including a three-level clothing and accessories store and a one-level home store, will anchor The Dubai Mall, scheduled for completion later this year.

The stores will be managed and operated by Al Tayer Insignia, a company of Al Tayer Group, under a licensing agreement. Al Tayer Group operates in 12 countries in the Middle East and beyond and represents brands such as Harvey Nichols, Armani, Gucci, Emilio Pucci, Bvlgari and Boucheron, as well as stores such as Gap and Banana Republic.

Also check out:

JP Morgan cuts Buckle to neutral (Reuters)

JP Morgan starts coverage of 3 U.S. chicken producers (Reuters)

 (Photo/Reuters)

Check out why Heinz didn’t suffer like Hormel did in the past quarter.

H.J. Heinz came in with a quarterly profit that beat Wall Street expectations, helped by price increases and new product sales, while Jennie-O turkey seller Hormel Foods saw its earnings dip.

Food companies have found it tough going as commodity costs shoot up, but Hormel was particularly hard hit. The reason? It raises the turkeys that it eventually sells — meaning spiking corn feed costs hurt its results. 

Also in food news –  Burger King reported quarterly numbers that easily beat analysts’ expectations, as consumers headed to its restaurants for a burger or two. It also issued a fiscal 2009 outlook within Wall Street’s expectations.

On the apparel end, Children’s Place posted a small quarterly profit, helped by summer clothing sales and cost cuts. Still, the kids’ apparel retailer said it expects further pressure on consumer spending due to the weak U.S. economy.

To round up news in the sector, Kohl’s Corp, a mid-tier department store operator, named its president Kevin Mansell as its chief executive, replacing Larry Montgomery, who will remain the company’s chairman.

Also in the basket:

Skechers says still wants to buy Heelys

Shareholder aims to thwart Longs-CVS deal - NY Post   

Tesco completes 605 mln stg of property deals

(Photo: Reuters)

What does gas at $4.50 a gallon mean for some mall-based department stores?

A downgrade by Goldman Sachs.

Goldman sharply raised its forecast for oil prices in the second half of this year, saying it expects U.S. crude to average $141 a barrel, up from a previous projection of $107. Goldman also forecasts prices will rise further next year to average $148.

That is not good news for retailers.

“Higher energy spending in the second half is likely setting the stage for a more challenging backdrop for consumer discretionary sectors, particularly for the department store stocks,” Goldman noted.

Goldman downgraded JC Penney and Nordstrom to ”neutral” from “buy.” It swapped its conviction list “buy” designation on Kohl’s with Wal-Mart. It upgraded off-price retailer TJX to “buy” from “neutral.”

Goldman also cut its second half same-store sales estimates for JC Penney, Kohl’s, Nordstrom and Macy’s.

“We believe companies will face an uphill battle against escalating energy prices offset by easier top-line compares and the anniversary of 2007’s extremely warm Fall season,” Goldman said about the second half of the year. ”In the end, we believe energy and constrained cash flow will win this tug-o-war causing same store sales to re-decelerate as the second half progresses.”
 
(Photo: Reuters)