Retailers, consumers and prices
Check out signs that a slow recovery is in the offing.
Retail executives see only gray skies ahead as U.S. shoppers are still spending cautiously, giving weight to the notion that a recovery will remain weak beyond 2010.
“The economic backdrop is not optimal,” Ken Perkins, president of retail research firm Retail Metrics, told Reuters. “It’s not catastrophic like it was in 2008 and the first quarter of 2009, but it’s just very sluggish.”
Indeed, Wal-Mart Stores posted its fifth consecutive quarterly drop in U.S. same-store sales (sales at stores that were open for at least a year) and said that trend may not reverse itself in the current quarter, Home Depot cut its full-year sales view and Kohl’s, which caters to middle-income consumers, and BJ’s Wholesale cut their profit forecasts.
“The landscape hasn’t changed, and you can make the case that perhaps it has worsened,” Kohl’s Chief Executive Kevin Mansell told Reuters last week.
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.
Check out the differing prospects at Home Depot and Lowe’s.
Home Depot topped analysts’ expectations with its quarterly report on Tuesday morning and raised 2010 forecasts after its strong start out of the gate.
That dose of confidence came a day after smaller rival Lowe’s issued guidance that disappointed investors. Remember, Lowe’s was a bit cautious when it came to talking about the possibility of an economic recovery.
For Home Depot, Black Friday comes in spring.
As many Americans prepare to spruce up their gardens, the world’s largest home improvement retailer will host “Spring Black Friday” — a weekend of regional door buster deals in March and April.
Like the traditional Black Friday that occurs the day after Thanksgiving to unofficially start the holiday shopping season, the home goods retailer hopes its spring event will jumpstart its busiest selling season.
Check out the recession. It appears it was still alive and well at Saks in the second quarter.
The upscale retailer posted a $54.5 million loss in the quarter, wider than the $32.7 million seen a year earlier.
Same-store sales fell 15.5 percent in the quarter and Saks expects that measure to fall in the mid-to-high single digits in the second half of the year.
The company has been cutting expenses and controlling inventory. The loss also was not as bad as analysts expected.
But unless a Versace dress becomes the “must-have” back to school item, the tough sales environment at Saks is likely to continue.
Also in the basket:
Cost cuts help Home Depot beat estimates
Big part of U.S. back-to-school sales still ahead: NRF
CKE same-store sales off 3.6 pct in latest four weeks
Target profit falls, but beats Wall Street view
Check out the ten largest U.S. retailers.
The National Retail Federation’s STORES magazine is out with its annual ranking of the top 100 retailers.
The list shows that U.S. consumers have been focused on bargains and basic necessities, such as food and medicine. Wal-Mart tops the lineup, followed by Kroger and Costco. Home Depot fell from No. 2 in 2007 to the fourth spot in 2008 as many shoppers decided to cut back on costly home-improvement projects.
The latest example of this new reality is Home Depot’s revised profit outlook.
The world’s biggest home improvement retailer said this year’s earnings from continuing operations could be flat to down 7 percent. That compares with its earlier call for a fall of 7 percent.
Home Depot, the top specialty home improvement retailer, said its quarterly profit was 35 cents per share in the first quarter, excluding items, topping Wall Street estimates for profit of 28 cents.
Home Depot said it is gearing up for spring with a wide assortment of lawn equipment and fertilizer products, looking to cash in should consumers cancel their contracts with professional landscaping companies.
Home Depot is hoping that U.S. President-Elect Barack Obama will take actions that will help bring the housing market out of its years-long slump.
As recent as early September, the retailer’s top executive said the housing market may be nearing the bottom of its decline. But that was before the financial crisis and rising unemployment took a toll on consumer confidence.