Check out which company Wall Street keeps underestimating.

It’s Jones Apparel. The retailer and apparel maker once again “reported a much higher-than-expected” quarterly profit. Last quarter, Reuters said the company “beat estimates handsomely.” The quarter before that it was “easily beat estimates.”

Heck, even in the fourth quarter, when almost all retailers and apparel makers were hammered by the recession and credit meltdown, the company reported a “smaller-than-expected” quarterly loss.

Aside from demonstrating that Reuters has several different ways of saying “big earnings beat,” the reports also raise this question: “Why does Wall Street keep missing the mark on Jones?”

One reason could be that the company itself still cannot quite figure out if business is up or down.

For the current quarter — which includes the all-important holiday season — it expects same-store sales to range anywhere from a drop of 2.5 percent to a rise of 2.5 percent.

So come February, you might see the words “eclipsed Wall Street Estimates” connected with Jones earnings.

Also in the basket:

Coke Enterprises higher profit tops expectations

Newell profit beats estimates, sales weak

Designer Ecko slam-dunked (N.Y. Post)

H&M eyes expansion in U.S. and Canada (WWD, subscription required)

(Photo: Jones Apparel website)

Check out who is shopping early for Christmas.
 
U.S. consumer are, according to a new Accenture survey, which showed that 69 percent of shoppers plan to do the bulk of their holiday shopping by Dec. 7.  That’s up from 60 percent a year earlier.
 
More than half (52 percent), plan to shop on Black Friday (the day after Thanksgiving), up from 42 percent last year.
 
The game of chicken between retailers and shoppers over discounts may be more intense this year after retailers had to practically give the store away in 2008 to clear inventory in the middle of the recession.
 
The vast majority of consumers (86 percent) will not be moved to buy without a discount of at least 20 percent, and a quarter of shoppers will be looking for an aggressive 50 percent discount before they open their wallets, the survey said.
 
“We have seen a ’shift to thrift’ across all income levels during this economic downturn and breaking that habit will be the greatest challenge for retailers this holiday season,” Janet Hoffman, managing director of Accenture’s Retail practice, said in a news release.
 
Gift cards may also come back, with 79 percent of people saying they will give them and 59 percent saying they really want them.
 
Also in the basket:
 
Cadbury’s bumper Q3 puts pressure on suitor Kraft
 
Altria revenue misses estimates
 
P.F. Chang’s profit misses; ups ‘09 outlook

(Reuters photo)

Check Out a new survey by market research firm NPD Group that says this year’s winter holiday will be better than last year’s but still not that merry. 

Thirty percent of consumers who responded to the survey said they planned to spend less on holiday gifts this year, up from 26 percent last year.

“That 4 percent increase is certainly a sign of the times,” said Marshal Cohen, chief industry analyst for NPD Group, based in Port Washington, New York. “On the other hand, that 4 percent is not s dramatic as it could have been. I think consumers will be looking for the right gift, rather than the most extravagant or expensive one.”

Cohen forecast total holiday sales to grow a modest 0.5 percent to 1.5 percent from last year, and said consumers are likely to favor more traditional gift items this year.

Sweaters, fragrances, music, books, movies, and wallets, are expected to be popular gifts,  Cohen. said.  ”We are also seeing makeup and TVs showing signs of growth. Other stand-outs are notebooks/netbooks. They have been growing and will continue to grow through the holiday.” 

Another bright spot was apparel, with 49 percent of respondents saying they planned to buy articles of clothing as a gift. That was steady with consumers’ intentions from last year.

“That is good news for apparel,” Cohen said. “Its multi-year slip has stabilized this year.”

The toy category slipped, however, with 34 percent of respondents saying they planned to buy toys this year, down from 37 percent last year. About 29 percent of respondents said they planned to buy movies, steady with last year.

People who said they planned to buy books and electronics each rose 1 percentage point to 28 percent and 24 percent, respectively.

In terms of motivating shoppers, NPD said “value” will be the prime motivator, with 62 percent of respondents saying value would play a big role in determining what and where they purchase. About 61 percent said they would be motivated by a “special sale,” and 50 percent cited a “convenient location”.

Also in the basket:     

Domino’s profit beats on tighter cost controls

Tesco CEO cautious on deflation outlook

IPO climate warming for some retailers (WWD) — subscription required

(Photo: Reuters)

Check out the ongoing debate about September’s same-store sales results and how the numbers beat expectations.

Yesterday, we found out that September same-store sales rose 0.6 percent, surpassing a forecast for a decline of 1.1 percent, according to Thomson Reuters data. When all was said and done, 78 percent of retailers that report monthly same-store sales posted results that beat Wall Street estimates, also according to Thomson Reuters.

So how was Wall Street so far off in its estimates?

Well analysts, economists and industry watchers we talked to cited a number of factors — the late Labor Day pushing back-to-school sales into September, cooler weather putting shoppers in the mood to buy Fall merchandise, easier comparisons to last year when sales began to fall off a cliff in the wake of the financial crisis, and retailers finally getting inventory in line with lower consumer demand.

“The Labor Day shift, cooler weather and start of easier comparisons all contributed to the upside,” wrote Pali analyst Amy Noblin in a note to clients on Friday morning.

“It is hard to walk away from a month with such broad-based strength and not feel marginally more confident about the consumer despite the fact that unemployment is still high and credit remains an issue,” she added.

Meanwhile, Lazard Capital Markets analyst Todd Slater said the larger question is, why didn’t more retailers beat expectations? 70 percent of the retailers he covers beat expectations.

“Our Beat-O-Meter came in at 70%, meaning that 7 of 10 retailers exceeded consensus comp expectations, begging the question: With benefits from the Labor Day shift, easing comparisons, and cooler weather, how did 30% not beat?” he wrote.

But Slater cautioned October may have a tough time sustaining September’s momentum.

“Based on our analysis, when retailers beat expectations by a large margin in one month, they usually miss consensus numbers in the following period (71% of the time), which simply means that expectations tend to get ahead of themselves pretty quickly,” he noted.

Also in the basket:

Shoes, bags prove staying power in luxury crisis

Kimberly-Clark to buy I-Flow for $324 million

H&M’s September sales seen up 2 pct yr/yr

Naomi Campbell Collaborates With Vuitton for Charity (WWD, subscription required)

(Photo: Reuters)

JC Penney stores in the United States and Puerto Rico are going exclusive with Liz Claiborne Inc’s namesake brand and celebrity designer Isaac Mizrahi will sell his upscale Liz Claiborne New York line only on QVC, a TV shopping network.

The moves from Liz Claiborne were seen by some as a downward shift to mass-market retail channels and came as department store orders for Liz Claiborne’s products have fallen during what has become the longest recession since the Great Depression.

Analysts said the JC Penney deal is more lucrative for Liz Claiborne and signals the end of a decades-long relationship between Liz’s main brand and the Macy’s department store chain – which didn’t exactly go quietly.

“The Liz Claiborne brand has sold poorly in recent years and has continued to decline. As a result, we could not justify expanding it at Macy’s,” a Macy’s spokesman said.

JC Penney is known in the United States for stressing affordability and discounts while higher-end department stores like Nordstrom or Saks carry more designer merchandise and higher price tags. Macy’s tends to be somewhere in the middle of the two extremes, but lately has been discounting aggressively and focusing on everyday values.

Liz Claiborne, which recently hired a turnaround firm, said its “bold steps” would  “further the revitalization” of the Liz Claiborne brand and “significantly alter its earnings trajectory.”

The agreement with JC Penney begins in August 2010. The Liz Claiborne New York line will partner with QVC after this year’s holiday season.

Mizrahi is no stranger to the small screen — or the silver screen. The outspoken designer currently is co-hosting Bravo’s “The Fashion Show” and was the subject of the 1995 documentary film “Unzipped.” 

While Mizrahi is not the first celebrity to pitch products on a home shopping channel, he did break new ground in 2003 with his exclusive women’s apparel and accessory line for Target.

His QVC show called “Isaac Mizrahi Live!” debuts in December and will sell Liz Claiborne New York apparel, accessories and home goods.

(Photo/Reuters)

Americans may have become more confident in the economy but they haven’t started spending heavily again — and that could be bad new for retailers this holiday season.

Discover’s U.S. Spending Monitor for September rose for the second straight month, climbing 2 points to 89 (based out of 100).  Thirty-three percent of respondents said they felt economic conditions were improving, a Monitor high and a 2-point rise from August.

When asked to rate their own financial fitness, 33 percent rated it as good or excellent, up a point from August and the highest percentage in four months. On the flipside, 48 percent said their finances were getting worse, also up a point from the previous month.

Consumers’ spending intentions remained flat.  Many industry watchers have said that the recession has created a “new normal” characterized by a more frugal lifestyle and fewer shopping sprees. Even those people who have remained financially secure, and are not among the 9.8 percent of Americans who are unemployed, have reset spending habits.

To that end, WSL Strategic Retail said that only 17 percent of shoppers plan to go back to shopping the way they used to.

“There appears to be no indication consumers are willing to increase their spending, despite a Monitor-high number of them who feel the economy is getting better,” said Julie Loeger, senior vice president of brand and product management for Discover.
 
That could cause headaches for retailers, who are hoping that consumers will start shopping again heading into the all-important holiday season.
 
For the sixth consecutive month, less than half of consumers said that they expected to have money left over after paying monthly bills.
 
One bright spot, if you could call it that, is that only 43 percent of respondents felt economic conditions are getting worse. Forty-six percent felt that way in August. 

(Photo/Reuters)

Check Out this slightly more optimistic holiday sales forecast.

The International Council of Shopping Centers (ICSC) said the 2009 U.S. holiday season is likely to be “a lot better” than last year, with sales rising roughly 1 to 2 percent.

The forecast, perhaps the most bullish yet, comes after a dismal 2008 holiday season that by some accounts was the worst in about 40 years.

Forecasts issued so far this year call for holiday sales to be flat to down versus last year, but some of those surveys use different methods for estimating sales.

The ICSC said holiday sales “in its many forms” — same store sales or total sales — could increase by about 1 percent to 2 percent, with sales at stores open at least one year rising 1 percent for the holiday shopping season of November and December.

Also in the basket:

Asian convenience stores ride the recovery

Zumiez raises Q3 earnings outlook

H&M signs Rykiel in latest high end venture

Gap co-founder Donald Fisher dead at 81

(Photo/Reuters)

Check out the sluggish sales at Walgreen.
 
People filled more prescriptions at the drugstore chain, but didn’t buy much else.  August same-store sales rose only 1.9 percent, less than analysts had anticipated.
 
While many retailers have been experiencing sales declines, drugstores have generally done much better because an aging population  has been buying more prescriptions drugs.
 
But Walgreen’s sales of general merchandise fell 1.3 percent.
 
That could be a bad sign for other retailers that report sales this week. Walgreen is the third-largest retailer that reports monthly sales, behind only Costco and Target.
 
Overall, analysts are expecting a 3.8 percent drop in same-store sales when retailers report this week.
 
Also in the basket:
 
Zale identifies prior adjustments, delays results
 
Jos A Bank Q2 results top Street

Brown-Forman profit tops view
 
Tesco uses weather to predict sales (N.Y. Times)
 
Retail theft soars in economic downturn (WWD, subscription required)

(Reuters photo)

 The MAGIC apparel trade show, the largest clothing convention in the country, is again being held in sweltering Las Vegas but the organizers, at least, are feeling cool.

“Everything is up, exhibitors are up 15 percent. It’s wonderful news for the industry,” said Chris DeMoulin, president of MAGIC International, organizer of the bi-annual event.

Yet the devastation of the last year on the once-booming industry – versus just two years ago when apparel brands didn’t hesitate to erect lavish booths throw parties and hand out freebies — is still on the minds of all.

“People are very cautious about what they’re buying,” said Stella Cho, owner of women’s contemporary brand Miss Me.

Lynne Koplin, president of women’s at Oxford Industries Tommy Bahama brand, estimates that the visits by retail accounts to her booth are off 25 percent. 

“The salesmen have to be on the road,” Koplin said, noting that it takes more effort to book a sale in a new environment in which consumers have cut back spending and major retailers have suffered double-digit monthly sales declines.

A visitor to the MAGIC show is greeted by a dizzying display of garments, footwear and accessories for sale - from bejeweled jeans to tailored men’s suits to flowing tie-dyed dresses. A brand can easily get overlooked among all the competition, so some are spending more to attract notice, and banking on pent-up demand they say will hopefully drive growth next year.

Cho said she spent on a bigger booth this time and flew in more employees from the company’s Los Angeles headquarters.  She’s encouraged by the fact that her jeans lines are “doing better than ever.”

At men’s outerwear company Weatherproof Garment Co, overall advertising spending is up by a third, and President Fredric Stollmack says the company is “taking advantage of a weak media market.”

“We’re having a good show. We’re selling to big stores and they’re all here with their top  management,” he said.

Still, no one really knows just how the fall and winter season will play out, despite what many say is a positive start to the big trade show that sells for spring.

Stollmack summed up the question on everyone’s mind: “How are the stores going to do? No one knows.”

(Photo: Reuters)

Check out the Retail Metrics earnings snapshot.

About two-thirds of the way through the second-quarter earnings season, retailers are beating earnings expectations by 5.1 percent on average, the research firm said.

But those were pretty low expectations and earnings are still down 6.4 percent compared with a year earlier. It is even worse when Wal-Mart is excluded. Then earnings are down 9.8 percent, Retail Metrics said.

Revenue is also down 2 percent.

With 83 retailers reporting, 41 percent had year-over-year earnings gains and 57 percent had declines.

Auto parts, drug and apparel retailers were among the groups seeing earnings gains, while teen apparel, department stores and home building supply stores were among the worst performers, Retail Metrics said.

Also in the basket:

Chico’s profit rises,  meets street view

Staples profit falls; says won’t give outlook

Burger King profit rises

Borders posts wider-than-expected loss

(Reuters photo)