Retailers, consumers and prices
Check Out Ann Taylor’s huge quarterly loss.
The clothing retailer, which operates its namesake stores and Ann Taylor Loft stores, posted a loss that was almost twice as big as Wall Street analysts had expected. The company is also shuttering 46 more stores as working women curb their shopping urges amid rising unemployment and the unabating financial crisis.
Ann Taylor’s loss came a day after top U.S. retailers posted February same-store sales numbers. While the overall result was boosted by Wal-Mart, several apparel chains and department stores are still bleeding sales as consumers continue to spend their money on basics such as food.
The retailer’s dismal results are just another sign that no quick turnaround is in sight for U.S. companies that cater to consumers’ shopping whims.
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Sears Holdings Corp reported a quarterly loss this morning. But the thing that left analysts like Credit Suisse’s Gary Balter scratching their heads was the company’s expectations for higher earnings before interest, taxes, depreciation and amortization (EBITDA) for the full year.
“We are struggling with what we are missing in the context of Q1 being down over $385 million in EBITDA and other comments in the release that talk about the expected difficult sales and gross margin environment,” Balter said in his research note.
Check out the weak sales week.
Chain store sales posted their weakest year-over-year increase in five years in the latest week, according to the International Council of Shopping Centers-UBS index. Sales were up only 0.5 percent in the week ended March 29, the worst performance since April 5, 2003.
One culprit: weak sales of spring clothes.
In a survey taken for ICSC-UBS on March 27- March 30, 59 percent of consumers said they cut back on spring apparel purchases or eliminated buying it altogether.
Just over one-third of people surveyed cited budget constraints, while 10 percent cited weather.
“For the month, ICSC expects industry comparable-store sales to be flat to down slightly on a year-over-year unadjusted basis,” ICSC Chief Economist Michael Niemira said.
ICSC now estimates Target same-store sales to be down 1 percent in March, Kohl’s to be down 8 percent, J.C. Penney to be down 11 percent and Wal-Mart to be up 1 percent.
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