Retailers, consumers and prices
from Summit Notebook:
I have no children and I left the public school system in 1991, so perhaps it's not news to some of you that parents of public school children are paying for things that we never would have dreamed we'd pay for when I was in school. To OfficeMax Chief Operating Officer Sam Martin, who visited our Reuters Consumer and Retail Summit on Wednesday, this stuff is no surprise at all because he's the one selling it to the parents.
On his short list of products that parents in some school districts are paying for: markers, chalk, tissues, paper towels.
Seriously? Why? "I think the budgets of local schools are pressured," Martin said. "The trend started a year ago. I expect to see it expand."
And are parents, as one of my colleagues asked, down with that? "Whether they're down with that depends on the mom. I know I supply a lot for my son."
Check out the smorgasbord of quarterly earnings in the consumer sector.
Among the many companies to report earnings on Thursday were P&G, Burger King, OfficeMax, Colgate, Fortune Brands, Bunge, Kellogg, Safeway and Mead Johnson. As usual, there was something for investors of all stripes.
P&G, for example, posted a better-than-expected profit, helped by its biggest volume gain in more than four years. That would please the optimists.
Every year retailers (at least some of them) fight to keep their Black Friday deals and discounts a secret. And every year, they wind up being leaked (or intentionally distributed) online.
Check out consumer-related companies Procter & Gamble, Colgate-Palmolive, OfficeMax, Domino’s Pizza and Sally Beauty Holdings all posting better-than-expected quarterly profits despite weak consumer demand.
P&G and Colgate surprised Wall Street on Thursday, as their efforts to hike prices and cut costs helped offset weaker demand in the recession. Both companies, which are rolling out new products to entice thrifty consumers back to stores, forecast sales growth for the year, excluding the impact of currency fluctuations, acquisitions and divestitures.
The office supplies retailer reported a fourth-quarter loss, compared with a profit a year ago. Excluding items, it reported adjusted earnings that missed Wall Street estimates by 16 cents per share.
Major office supply retailers–Staples, Office Depot and OfficeMax–are offering some basic school supplies for a penny and have marked down other items to give consumers relief from higher gas and food prices and to try to lure shoppers over the next couple of months.
Check out more woe for the office supply sector, specifically Office Depot
The retailer warned that same-store sales in North America fell nearly 10 percent during the second quarter and said operating margins would fall more than expected as business conditions worsened. The news sparked a sharp sell-off in the stock as well as those of rivals Staples and OfficeMax.
Recent months have been tough for Office Depot, which earlier this year faced a proxy challenge from a shareholder group seeking to oust Chief Executive Steve Odland from the board. With the weaker second quarter results in view, one analyst raised the possibility that management changes could be in the offing.
The reports largely showed that the companies are finding successful ways to navigate the consumer spending slowdown and the commodity price surge that has raised their cost of doing business.