Shop Talk
Retailers, consumers and prices
Check Out Line: Mixed financial bag at Talbots
Check out the mixed results at women’s clothing retailer Talbots.
The company posted a higher-than-expected quarterly profit as tighter inventory management boosted margins, but demand lagged analysts’ expectations.
Talbots’ second-quarter results echoed those of the prior three-month period, when sales suffered as the retailer did not stock enough merchandise.
“Our top-line sales performance reflects our decision to remain on plan with respect to our promotional event calendar within what proved to be an aggressively promotional environment,” Chief Executive Trudy Sullivan said.
U.S. retailers posted modestly higher-than-expected August sales as consumers sought out bargains during the key back-to-school shopping season. The reports suggested retailers were able to clear excess inventories ahead of the key selling season without having to resort to deep discounts.
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Check Out Line: More corporate earnings to parse
Check out the latest raft of quarterly earnings.
With investors and denizens of Main Street alike dissecting various government reports and company press releases for hints on the relative strength or weakness of the U.S. economy, the latest slew of quarterly earnings arrived to parse, including better-than-expected results from Wal-Mart Stores and Home Depot.
Wal-Mart posted a better-than-expected profit helped by cost cuts and growth in international markets as sales at U.S. stores open at least a year fell. The world’s largest retailer also raised its full-year profit forecast.
Home Depot, the largest home improvement chain, reported a slightly better-than-expected profit on tighter cost controls, but sales missed analysts’ expectations as consumers curbed purchases in the grim U.S. economy. The results prompted the company to boost its profit outlook and shave its sales forecast for the year.
Apparel retailer Abercrombie & Fitch also posted a profit that topped expectations as the company’s discounts drew customers and lifted sales, while Danish brewer Carlsberg’s higher profit surprised and it raised its 2010 outlook.
Even for those in negative territory, there were silver linings as apparel maker Perry Ellis said it expects to post a narrower-than-expected quarterly loss and earn more than it had previously forecast for fiscal 2011. Department store Saks reported a smaller-than-expected loss due to an uptick in luxury spending and its ability to sell more items at full price.
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Check Out Line: Reading the earnings tea leaves
Check out the latest batch of quarterly earnings to parse in the consumer world.
Fortune Brands and Newell Rubbermaid both posted a stronger-than-expected quarterly profit and raised their full-year forecasts despite talk of “headwinds” in the second half of the year by the former and a “lackluster economy” by the latter.
Consumer goods maker Fortune Brands said its results were helped by double-digit sales growth for its home and security products. The maker of Jim Beam bourbon, Titleist golf balls and Moen faucets cited headwinds for the rest of the year higher but still raised its profit outlook.
“We anticipate the back half of the year will be impacted by certain headwinds we’ve previously discussed, including higher costs for raw materials and transportation, the stronger U.S. dollar, annualizing cost savings and increasingly challenging comparisons to last year’s improving results,” Chief Executive Bruce Carbonari said in a statement.
“However, even with these headwinds, we continue to believe that the markets for each of our three brand groups will grow at a low-single-digit rate for the year,” he added.
Newell said price hikes and strong demand in Latin America and other key markets drove its strong results. That prompted the maker of Rubbermaid containers, Sharpie pens, Graco strollers, Calphalon cookware and more to raise its full-year profit forecast despite what it called “a lackluster economy.”
Of course, with the good earnings news comes the bad.
Check Out Line: Earnings to quench investors’ thirst
Check out the latest quarterly earnings for signs of a recovery.
Whirlpool and PepsiCo both reported better-than-expected quarterly profits and pointed to improving trends, lending hope to optimists that the economy is slowly improving.
While citing continuing macroeconomic challenges, PepsiCo, which makes Tropicana juice, Frito-Lay snacks and Quaker Oats in addition to its namesake cola, posted stronger-than-expected results and affirmed its earnings per share growth target for the fiscal year.
“We are benefiting from both the acquisition of our anchor bottlers earlier this year and from improving trends across our global business. As planned, we have stepped up incremental investments around the world to capitalize on untapped consumer demand,” Chief Financial Officer Hugh Johnston said in a statement.
Meanwhile, Whirlpool beat profit and sales estimates on strong demand in Asia and Latin America, prompting the world’s largest appliance maker to raise its outlook for the year.
Nevertheless, pessimists have their data points. Unemployment continues to weigh on consumers and U.S. homebuilder confidence fell to a 15-month low in July. Whirlpool rival Electrolux also missed earnings forecasts, sending shares in the Swedish company sliding on fears that recent growth trends have topped out.
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Check Out Line: Retail earnings present a mixed bag
Check out U.S. retailers posting better-than-expected profits but seeing their shares fall.
Kohl’s Corp on Thursday posted quarterly profit that rose more than Wall Street had expected. But the mid-tier department store operator’s shares fell nearly 3 percent after its forecast for the second quarter and full year fell short of analysts’ estimates.
“Consumers appeared to be a little more confident in their spending, but remain focused on value and ways to make their dollars go farther,” said Kohl’s CEO Kevin Mansell in a statement.
Meanwhile, specialty retailer Urban Outfitters reported that quarterly profit rose 72 percent, but its earnings per share only topped Wall Street estimates by a penny and its shares fell 3 percent.
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Check Out Line: Barbie and friends sell well
Check out the stronger-than-anticipated results from Mattel.
The toy giant notched a 12 percent jump in sales and a surprise profit in its latest quarter, sending a strong signal that toys are getting year-round attention, not just a holiday season boost.
Barbie’s sales rose 5 percent and some newer items, such as the World Wresting Entertainment and Thomas and Friends collections, were very good sellers, Mattel said. (That’s Triple H showing off his WWE action figure at Toy Fair earlier this year)
American Girl dolls and accessories posted a 6 percent rise in sales, suggesting even pricey goods are back in style.
Mattel’s strength came on the heels of U.S. retailers posting a stellar month of sales growth. Even Canada’s MEGA Brands, which posted a loss last month, said its sales rose for the first time since the first quarter of 2007. Are consumers back for good? We’ll get another dose of data when Mattel’s main rival, Hasbro, issues its results on Monday.
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Check Out Line: Consumers spending again, just not drinking much
Check out Constellation Brands’ lack of optimism.
Even though shoppers are returning in droves to malls to buy clothes and shoes, based on retailers’ boffo business in March, they are more sober -literally- in their spending on booze.
Constellation, which makes Robert Mondavi wine and owns the Svedka vodka brand, managed to squeeze out a bigger operating profit during its fourth quarter, despite a 3.5 percent drop in sales. It also owns half of a joint venture that imports beers like Corona, but said those sales fell 4 percent.
CEO Rob Sands apparently found little to toast about as he looks ahead. The company gave a disappointing profit forecast partly because of how dodgy the economic recovery is and how weak imported beer sales look to remain.
His caution appears to be well placed. A study by business advisory firm AlixPartners conducted in February and released on Friday found that about 89 percent of U.S. consumers (sample size of 1,000) plan on spending the same or less on booze in 2010.
It’s enough to make a CEO cry in his (imported) beer.
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Check Out Line: Tasty outlook from Brinker
Check out the tasty outlook coming from restaurant chain Brinker.
The parent of Chili’s Grill & Bar, On the Border and Maggiano’s Little Italy restaurants raised its full-year earnings outlook while also boosting its quarterly dividend payout by 27 percent.
Brinker now expects a 2010 profit of $1.40 to $1.44 a share excluding one-time items. It had previously forecast a range of $1.15 to $1.30. Analysts were expecting $1.39, according to Thomson Reuters I/B/E/S.
The news continued a nice run for Brinker, which in January posted a better-than-expected quarterly profit. On Thursday, the company said it would sell its On the Border Mexican Grill & Cantina business to an affiliate of Golden Gate Capital for undisclosed terms.
Analysts expect sales trends to continue to improve for U.S. restaurants from last year’s dismal levels, but gains will be tough to come by as spending levels on meals away from home are expected to remain constrained.
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Check Out Line: A basket full of profits
Check out today’s earnings-palooza.
Two retailers topped analysts’ expectations after a strong holiday-season showing, while ConAgra Foods was helped by a makeover of its consumer foods segment.
Best Buy’s better-than-expected profit was helped by demand for devices such as notebook computers. The company’s 12 percent revenue jump came even as Walmart and other chains stepped up their electronics push for the holidays. Of course, this was also the first winter that they didn’t have to compete against the brick and mortar Circuit City stores.
Meanwhile, Signet — the owner of the Kay Jewelers and Jared chains — won some market share in the United States. Its profit came in 10 cents per share higher than analysts had anticipated.
Besides ConAgra, McCormick & Co also posted quarterly results in the food aisle. While the latest quarter came in ahead of expectations, the spice maker’s forecast signals that the current fiscal second quarter will be a weak one.
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Check Out Line: More quarterly earnings to parse
Check out the latest quarterly earnings to size up.
Williams-Sonoma reported a better-than-expected profit on lower costs and strong holiday sales, and the home goods chain said it sees sales and earnings rising for the year.
The operator of the Pottery Barn, West Elm and Williams-Sonoma chains, which won many shoppers in the holiday season by offering more lower-priced home decor items, also boosted its quarterly dividend by 8.3 percent.
PepsiCo and Kimberly-Clark, meanwhile, both backed their 2010 earnings outlooks.
Tiffany’s message was more mixed as the upscale jeweler’s profit was lower-than-expected, but its full-year forecast was above the Street’s expectations.
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