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 weaker-than-expected earnings at Lowe’s.
Giving fuel to pessimists about the U.S. economy, Lowe’s, the No. 2 home improvement chain behind Home Depot, posted a quarterly profit and sales that missed analysts’ expectations, and also forecast lackluster earnings in the current quarter, underscoring “limited visibility into near-term demand.”
Sales at companies like Lowe’s had benefited immensely from the homeowner tax credit and cash for appliances programs, but now more and more uncertainty seems to be the watchword.
Check out the apparent return of the frugalista.
Worries about stubbornly high U.S. unemployment and a tempermental economic recovery has shoppers reeling in spending on all but the essentials.
The 28 retailers tracked by Thomson Reuters reported an overall 2.9 percent rise in July sales at stores open at least one year, missing Wall Street forecasts of 3.1 percent. Seventeen of those retailers reported lower-than-expected sales, while nine — including Macy’s and Kohl’s — beat estimates.
Check out the latest celebrity designed clothing line.
Spears, whom Forbes magazine once ranked the most powerful celebrity in the world and still ranks No. 6, has designed her first collection of clothing and accessories for Iconix Brand Group’s Candie’s brand, for which she has been the face the past three seasons.
Check out department stores’ forecasts coming in below expectations as they try to gain market share.
On Friday, JC Penney became the latest chain to issue outlook that falls a little bit short of what Wall Street had already expected.
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.
Looks like Kohl’s has not found its partnership with pop starlet Britney Spears and the clothing line she shills to be “Toxic.”
Kohl’s, seen in some circles as dowdy and bland, has been on a campaign to spice things up in recent years, hence Britney’s pitching gig for Candie’s, a line of women’s clothes available only at Kohl’s.
In a research note this week, Credit Suisse analyst Michael Exstein examined what changes in the media world mean for retailers who are used to reaching consumers through traditional channels — like the newspaper.
Check out the cost cutting formula failing at Sears.
In the past few weeks a slew of retailers, ranging from Target to Macy’s to Dillard’s, have posted results that were better than Wall Street expected, helped by cost cuts. Retailers have done everything from freezing executive salaries to eliminating jobs to slowing store expansion plans.
But on Thursday, Sears reported a surprise loss in its second quarter while analysts were expecting a profit.
Check out the quarterly results at Wal-Mart.
The retail giant posted a flat profit in line with Wall Street’s expectations, but it gained market share in the recession as consumers sought to take advantage of the company’s low prices on necessities.
Wal-Mart Chief Executive Mike Duke said the company remains cautiously optimistic about the timetable for the economic recovery, while Vice Chairman Eduardo Castro-Wright said a large part of its U.S. growth was coming from new customers.