Retailers, consumers and prices
Christmas may be starting early for many retailers, but that isn’t the case at Starbucks.
While department stores like Macy’s are already in full holiday mode — hoping to get a jump on what is expected to be a dismal holiday season — the Seattle coffee shop chain is waiting until after Halloween and after Thanksgiving to serve up its holiday cheer.
Dorothy Kim, executive vice president of global strategy at Starbucks, said company executives had numerous discussions about when to roll out its holiday products, particularly since the economy is weak and this year’s holiday season has fewer shopping days than usual.
“We thought, ‘Let’s be courageous, let’s launch holiday after Thanksgiving’,” Kim said. “We have four weeks and we’re going to focus our efforts on that.”
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.
It’s Christmas already at Macy’s and yes, indeed, the holiday is on sale.
More than a month ahead of Halloween, the U.S. department store chain has dragged out its colorful collection of ornaments, baubles and beads and discounted the price by 25 percent.
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.
Check out Macy’s profit, or loss, depending on how you count.
The department store operator posted a $59 million loss in the first quarter, hurt by a drop in sales and the costs of restructuring.
So of course its stocks jumped.
Restructuring charges are seen by the investment community as “one-time items” and are generally disregarded when looking at how well a company did in any given quarter.
So without ”one-time items” Macy’s posted a profit of 2 cents a share from continuing operations. That was better than the 2-cents-a-share loss that analysts expected.
Macy’s also affirmed its forecast for a profit of $1.85 to $2.15 a share for the year, possibly a sign that things at least are not getting worse for the company, which, like most department store operators, has been hurt by the slumping U.S. economy.
Of course, that forecast excludes “one-time” items.
Also in the basket:
Barney’s Socol quits, no clear successor (WWD)
Benetton Q1 profit, sales up, outlook confirmed
Check out things looking a little better in retail?
Ann Taylor raised its forecast for first-quarter earnings, citing improved results at its LOFT chain and stronger expense control.
This comes a few days after many retailers posted better-than-expected sales in April and could mark the start of a trend.
Goldman Sachs said the better April could lead to modest first-quarter earnings beats.
“This will be particularly evident across the department store sub sector as most management teams reduced their earnings outlook post March results, which fell short of plan. Kohl’s has already kick started this trend stating EPS would ‘exceed’ previous 40 cents to 42 cents guidance. We suspect J.C. Penney will follow suit, beating management’s 50-cent forecast … given high end of plan sales,” Goldman said in a research note.
Retail earnings get going in earnest this week with reports from Wal-Mart, Macy’s, J.C. Penney and others.
Also in the basket:
April retail sales barely budged: SpendingPulse
Luxury brands Prada, Ferragamo risk competing IPOs