Shop Talk
Retailers, consumers and prices
Check Out Line: Earnings to quench investors’ thirst
Check out the latest quarterly earnings for signs of a recovery.
Whirlpool and PepsiCo both reported better-than-expected quarterly profits and pointed to improving trends, lending hope to optimists that the economy is slowly improving.
While citing continuing macroeconomic challenges, PepsiCo, which makes Tropicana juice, Frito-Lay snacks and Quaker Oats in addition to its namesake cola, posted stronger-than-expected results and affirmed its earnings per share growth target for the fiscal year.
“We are benefiting from both the acquisition of our anchor bottlers earlier this year and from improving trends across our global business. As planned, we have stepped up incremental investments around the world to capitalize on untapped consumer demand,” Chief Financial Officer Hugh Johnston said in a statement.
Meanwhile, Whirlpool beat profit and sales estimates on strong demand in Asia and Latin America, prompting the world’s largest appliance maker to raise its outlook for the year.
Nevertheless, pessimists have their data points. Unemployment continues to weigh on consumers and U.S. homebuilder confidence fell to a 15-month low in July. Whirlpool rival Electrolux also missed earnings forecasts, sending shares in the Swedish company sliding on fears that recent growth trends have topped out.
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Check Out Line: Whirlpool profit hits happy note
Check out the blowout earnings by Whirlpool.
The maker of Maytag and KitchenAid appliances posted a quarterly profit that left analysts’ expectations in the dirt. Try $2.51 a share compared with Wall Street’s estimate for $1.33. People, when a company tops expectations to the tune of $1.18, that’s crazy.
The strong results, not surprisingly, prompted the world’s largest appliance maker to raise its full-year outlook as well as its forecast for 2010 U.S. industry shipments.
The company had been hurt by the sluggish economy and weak housing market in North America — its largest market — but increasing demand for energy-efficient products and a federal stimulus program are luring shoppers back.
Not to be outdone, cigarette maker Lorillard posted a stronger-than-expected profit, helped by higher volumes and market share gains as U.S. smokers chose less expensive brands.
On the other hand, Alberto Culver, which makes TRESemme, Albert VO5 and other shampoos and personal-care products, reported a smaller-than-expected profit, hurt by a plant closure and a switch to new software in the United States that has created customer service problems.
Pessimists remain as a Harris Poll showed many Americans remain gloomy about the economy.
Check Out Line: Food companies serve up tasty results
Check out the better-than-expected results being served up by food companies.
Chocolate maker Hershey posted a quarterly profit above analysts’ expectations, said it was on target to meet its 2010 earnings forecast and boosted its dividend. The company also said it would boost advertising to try to sell more candy, including Almond Joy and York peppermint patties.
Meanwhile, Archer Daniels Midland, one of the largest processors of corn and soybeans, saw its profit slip 2 percent, but the results still topped analysts’ forecasts, and Pepsi Bottling also topped Wall Street’s view as productivity improvements offset a dip in sales. Fruit and vegetable producer Dole Food reported a higher fourth-quarter profit and paid down debt.
Outside the food and beverages sector, Whirlpool’s profit more than doubled on cost cuts and improving sales and the world’s biggest appliance maker offered a stronger-than-expected 2010 forecast. Women’s clothing retailer Ann Taylor said its fourth quarter earnings would top expectations.
Nevertheless, investors have been giving overall U.S. earnings a big yawn up to now, and consumers are saving more and spending less according to the IMF. On the plus side, global employment services company Manpower reported a higher-than-expected profit and said job trends were improving around the world, suggesting the economic recovery would be sustained.
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Check Out Line: Cost cutting your way to a better day
Check out how cost cutting helped Whirlpool.
The world’s biggest appliance maker used cost cuts to offset weak sales as it reported a higher-than-expected quarterly profit. Whirlpool also raised its full-year profit outlook, citing downsizing and — yes, you guessed it — cost cuts as demand remains uncertain in many markets.
Sales at appliance makers like Whirlpool, known for its Maytag and KitchenAid brands, and Sweden’s Electrolux have suffered in the global economic slowdown as consumers trim spending on items not deemed essential.
Whirlpool’s recent cost cutting actions have included plant closures, consolidation of its Chinese operations, lower retirement plan contributions, frozen salaries and lower capital spending.
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Check Out Line: Whirlpool posts profit ?!?!
Check out the surprise quarterly profit at Whirlpool.
The world’s biggest appliance maker, known for its namesake, Maytag and KitchenAid brands, was aided in the unexpected good news — analysts were expecting a loss — by its cost-cutting efforts. The company has frozen salaries, reduced its contribution to retirement plans and taken other steps to save money amid the recession.
Despite the profit, sales tumbled 23 percent in the first quarter. Whirlpool also said it now expects 2009 industry unit shipments in the United States and Europe to decline more than previously expected.
Whirlpool was not the only company getting a boost from cost cutting. Energizer, which makes its namesake batteries, Schick razors and Playtex tampons, posted a higher-than-expected profit as cost cutting helped offset pressure from foreign exchange and consumers trading down to cheaper batteries.
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Check Out Line: Cooking up meager profits
Check out the falling profits at Whirlpool and Hasbro. Whether the ovens you make cook with gas like Whirlpool’s or with a light bulb like Hasbro’s Easy-Bake, it’s hard to make much money when people don’t want to buy anything. Whirlpool profit fell 76 percent in the fourth quarter as sales in North America dropped 18 percent. The world’s biggest appliance maker also said it expected industrywide shipments of appliances to fall 10 percent in 2009. Hasbro, which makes littler appliances, as well as G.I. Joes and Transformers, saw a 30 percent drop in quarterly profit as shoppers bought fewer toys for the holidays. The company plans to focus on cutting costs this year, as are many, if not most companies in the United States. But wait, is that G.I. Joe coming to the rescue? A G.I. Joe movie this year is expected to help lift sales of the action figures and other toys Hasbro sells under those names. Perhaps they can work some kitchen scenes into the script and help out Whirlpool. C’mon, at least a trash compactor to deal with the bad guys? Also in the basket: McDonald’s same-store sales rise Saks upends luxury market with strategy to slash prices (WSJ)
(Reuters photo from 2002)
Appliances get Black Friday boost
The beaten-down appliance sector got a shot in the arm on Black Friday as many consumers bought new washers for their laundry rooms, one spot survey shows.
Appliance sales, especially of washing machines and dryers, were up significantly over Thanksgiving weekend as shoppers responded to discounts, said David MacGregor, an analyst with Longbow Research.
More consumers are also buying extended warranties for these big-ticket items, he added.
MacGregor, who conducts regular surveys of appliance sellers, said 87 percent of retailer contacts indicated sales met or exceeded expectations, in some cases doubling forecasts for the weekend.
Sears, the biggest U.S. appliance retailer, benefited strongly as promotions and doorbuster offers drove Black Friday traffic. The retailer’s Black Friday deals included a Kenmore washer-dryer pair priced at $599 that normally sells for $1,199, a spokesman told Reuters.
“Based on our estimates of costs, we believe that Sears probably sold most of these heavily discounted items at or below cost and then tried to recover some margin through sales of extended warranties,” MacGregor said in a research note.
The continuing U.S. housing slump and tighter credit has hurt appliance demand. U.S. shipments of major appliances were down about 9 percent for the year to date through late October, according to the Association of Home Appliance Manufacturers.
Check Out Line: More jobs down the (Whirlpool) drain
Check out the Whirlpool of woe. Five thousand. That’s the number of jobs Whirlpool plans to cut by the end of next year as it faces falling sales in North America and a potential global recession. Appliance makers have already been hammered by the U.S. housing collapse. Now the credit crunch is likely to keep demand down, the world’s largest appliance maker said. “The global credit crisis has had a profound negative impact on what was already a weakening and very fragile global economy,” Whirlpool Chief Executive Jeff Fettig (pictured left) said in a statement. Some of the job cuts had already been announced. Others were new. They all add to a slew of job cuts announced by corporate America in recent weeks. That creates a spiral of people not being able to buy the goods the manufacturers make, which could cause manufacturers to cut more jobs as the economy keeps swirling down the drain. Also in the basket: Sam’s Club opening new store called Mas Club Retailers slash Blu-ray player prices (WSJ)
Pershing to unveil suggested Target “transaction”
Wal-Mart cutting US store openings further
Wal-Mart says ‘relentlessly’ non-partisan in US election
(Photo: Reuters)
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