Tampilkan postingan dengan label Retail Industry. Tampilkan semua postingan
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Rabu, 14 September 2011

Surprise! Surprise? Retail Sales Demise

retail salesWas anybody really surprised to learn that retail sales stalled in August? Apparently economists were, given their consensus forecast for growth of 0.2%, based on Bloomberg’s survey. Census Bureau data reported Wednesday showed retail sales actually stuck around the same mark set in July. Considering the damage DC and S&P brought to the stock market and consumer confidence through the summer, there should be no surprise about August retail sales dribble. The job now ahead of our government is how to restore confidence before an economic death spiral gains momentum.

business bloggerOur founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relevant Tickers: NYSE: XRT, NYSE: WMT, NYSE: PIR, NYSE: ETH, Nasdaq: HOFT, NYSE: HD, NYSE: LOW, Nasdaq: AAPL, NYSE: BBY, NYSE: LTD, NYSE: CHS, NYSE: ANN, NYSE: GPS, NYSE: M, NYSE: JCP, NYSE: JWN, NYSE: TJX, NYSE: KSS, Nasdaq: COST, NYSE: TGT, NYSE: WMT, Nasdaq: WTSLA, Nasdaq: HOTT, NYSE: AEO, NYSE: ARO, NYSE: ANF, NYSE: SAK, NYSE: TIF, NYSE: TLB, NYSE: LL, Nasdaq: BLDR, NYSE: FO, NYSE: LEG, NYSE: TPX, NYSE: AYI, NYSE: LZB, Nasdaq: SCSS, NYSE: ZZ, NYSE: FBN, NYSE: NTZ, Nasdaq: SHLD, NYSE: DDS, Nasdaq: BONT, Nasdaq: CPWM, Nasdaq: BKRS, Nasdaq: BEBE, NYSE: BKE, Nasdaq: CACH, Nasdaq: CMRG, Nasdaq: CATO, NYSE: CBK, Nasdaq: CTRN, NYSE: PSS, Nasdaq: DEST, Nasdaq: DBRN, NYSE: DSW, Nasdaq: FINL, NYSE: FL, Nasdaq: GYMB, NYSE: GES, NYSE: JCG, NYSE: JNY, Nasdaq: JOSB, NYSE: NWY, NYSE: JWN, NYSE: MW, Nasdaq: SYMS, Nasdaq: PLCE.

Surprise! Surprise? Retail Sales Demise



Back to school or back to broke? The back to school shopping season tends to heat ahead of Labor Day, but this data is adjusted for seasonal variation, and so should not be seen as worse for it. And how bad is it really? On a year-over-year basis, sales were 7.2% higher. Even after adjusting for inflation, that’s not shabby growth. However, gasoline station sales increased 20.8% on a year-over-year basis, thus reflecting the rise in gasoline prices through the period. This leads one to wonder if gas padded the numbers. However, if we measure retail health excluding gasoline, it still doesn’t look that bad. Most of the categories listed in the report show better than inflation rates of growth on an annual basis. That said, and like I’ve often stated in the past, we slow before we stop and we stop before we reverse course.

The month-to-month 0.0% growth rate proved harder to digest because July’s growth was revised downward to +0.3%, from the initially reported 0.5% rise. The July data was reassuring to investors when reported, so this is like a rug has been pulled out from under us. Still, the stock market was higher through early afternoon trading Wednesday on the appeasement of investors by an Italian vote of confidence for its government and on the reassurances of Angela Merkel and other European leaders regarding a feared Greek default.

Surprising motor vehicle sales weakness cost the overall growth performance, as the rate excluding auto sales was a better +0.1%. Motor vehicle and parts dealers’ sales were reported down by 0.3% through the month. This was consistent with data reported at the start of September, with domestic auto sales estimated running at a 9.4 million annual rate, down from 9.5 million in July. Total auto sales were down to a rate of 12.1 million, from 12.2 million in July.

Significant softness was also seen in apparel sales (clothing & clothing accessories), which was reported down 0.7% month-to-month. And the August drop was preceded by a decline of 0.3% in July. Clothing is perhaps one of the more discretionary spends made by consumers. Department stores did especially poorly, with those sales down 0.3% month-to-month. That news has not hurt the stocks of the big boxes today, with shares of J.C. Penney (NYSE: JCP) up 4.1%, Macy’s (NYSE: M) up 2.8%, Kohl’s (NYSE: KSS) up 2.2% and Nordstrom up 0.3% at the hour of publishing here. Grocery store sales, an area of necessity, rose 0.5%; though food sales, like gasoline, may reflect rising pricing as well (Kroger NYSE: KR up 0.3%). Spending at restaurants and bars (food services and drinking places), which are certainly discretionary for most of us, declined by 0.3% in August; and that followed the 0.4% decline in July. Shares of Brinker International (NYSE: EAT) and Darden Restaurants (NYSE: DRI) are up 5.3% and 2.4%, respectively, nonetheless. This discretionary spending drop-off should make DC and S&P feel a little guilty, if either has a conscience, but it looks like investors in these companies expected worse news today.

Nonstore retailers, which is basically online business now (once dominated by catalog), saw a sales increase of 0.5% in August and a strong 10.4% increase year-over-year. This continues to be a market share story, as the web keeps grabbing business from the street. Perhaps a sign of renewing decline in housing, furniture and home furnishing stores saw a sales drop of 0.2% in August, and have only modest growth of 0.2% to report on a yearly basis.

Sporting goods and other hobby stores posted strong growth of 2.4% in August, and I continue to believe this is due to a little understood phenomenon among the tally takers. Heading into the school year, student athletes and musicians must restock on equipment and supplies for their game and music playing efforts. It’s my view that the seasonal adjustment has not been accounted for here, as I recall this happening in years past as well.

In conclusion, the decline in August, following a moderated growth rate in July, can be directly attributed to Washington D.C. and to Standard & Poor’s in my opinion. The two perhaps equally responsible entities managed to scare the consumer, both employed and unemployed, into their bunkers. The capital destruction that occurred in the stock market on dire debt ceiling debate and the prospective economic collapse threatened by a downgraded sovereignty kept Americans focused on preservation of capital, and perhaps food as well. Hopefully, American confidence can be restored as quickly as it was damaged, but it appears a self-feeding down spiral is more likely.

Article interests investors in: S&P Retail ETF (NYSE: XRT), Wal-Mart (NYSE: WMT), Pier 1 Imports (NYSE: PIR), Ethan Allen (NYSE: ETH), Hooker Furniture (Nasdaq: HOFT), Home Depot (NYSE: HD), Lowes (NYSE: LOW), Apple (Nasdaq: AAPL), Best Buy (NYSE: BBY), The Limited (NYSE: LTD), Chicos (NYSE: CHS), Ann Taylor (NYSE: ANN), The Gap (NYSE: GPS), Macy’s (NYSE: M), JC Penney (NYSE: JCP), Nordstrom (NYSE: JWN), TJX Company (NYSE: TJX), Kohls (NYSE: KSS), Costco (Nasdaq: COST), Target (NYSE: TGT), Wet Seal (Nasdaq: WTSLA), Hot Topic (Nasdaq: HOTT), American Eagle Outfitters (NYSE: AEO), Aeropostale (NYSE: ARO), Abercrombie & Fitch (NYSE: ANF), Saks (NYSE: SAK), Tiffany (NYSE: TIF), Talbots (NYSE: TLB), Lumber Liquidators (NYSE: LL), Builders Firstsource (Nasdaq: BLDR), Fortune Brands (NYSE: FO), Leggett & Platt (NYSE: LEG), Tempur-Pedic International (NYSE: TPX), Acuity Brands (NYSE: AYI), La-Z-Boy (NYSE: LZB), Select Comfort (Nasdaq: SCSS), Sleepy’s (NYSE: ZZ), Furniture Brands (NYSE: FBN), Natuzzi (NYSE: NTZ), Sears (Nasdaq: SHLD), Dillard’s (NYSE: DDS), Bon-Ton (Nasdaq: BONT), Cost Plus (Nasdaq: CPWM), Baker’s Footwear (Nasdaq: BKRS.OB), Bebe Stores (Nasdaq: BEBE), The Buckle (NYSE: BKE), Cache (Nasdaq: CACH), Casual Male (Nasdaq: CMRG), Cato (Nasdaq: CATO), Christopher & Banks (NYSE: CBK), Citi Trends (Nasdaq: CTRN), Collective Brands (NYSE: PSS), Destination Maternity (Nasdaq: DEST), Dress Barn (Nasdaq: DBRN), DSW (NYSE: DSW), Finish Line (Nasdaq: FINL), Footlocker (NYSE: FL), Gymboree (Nasdaq: GYMB), Guess (NYSE: GES), J. Crew (NYSE: JCG), Jones New York (NYSE: JNY), Jos. A Banks (Nasdaq: JOSB), New York & Co. (NYSE: NWY), Men’s Wearhouse (NYSE: MW), Syms (Nasdaq: SYMS), The Children’s Place (Nasdaq: PLCE).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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Selasa, 07 Juni 2011

Talbot's (NYSE: TLB) – Fool Me Twice, Shame on Me!

Talbots TLB, fool me twice shame on meRemember Talbot’s, the company that was one of the first retailers to struggle in the economic downturn, later followed and surpassed by Circuit City, Blockbuster and a few others? Yeah, well, she’s back to stinking up the joint again, the joint being the NYSE (NYSE: NYX) and the stinking being a 39% market capitalization shredding.

retail apparel analystOur founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relevant Tickers: NYSE: XRT, NYSE: WMT, NYSE: PIR, NYSE: ETH, Nasdaq: HOFT, NYSE: HD, NYSE: LOW, Nasdaq: AAPL, NYSE: BBY, NYSE: LTD, NYSE: CHS, NYSE: ANN, NYSE: GPS, NYSE: M, NYSE: JCP, NYSE: JWN, NYSE: TJX, NYSE: KSS, Nasdaq: COST, NYSE: TGT, NYSE: WMT, Nasdaq: WTSLA, Nasdaq: HOTT, NYSE: AEO, NYSE: ARO, NYSE: ANF, NYSE: SAK, NYSE: TIF, NYSE: TLB, NYSE: LL, Nasdaq: BLDR, NYSE: FO, NYSE: LEG, NYSE: TPX, NYSE: AYI, NYSE: LZB, Nasdaq: SCSS, NYSE: ZZ, NYSE: FBN, NYSE: NTZ, Nasdaq: SHLD, NYSE: DDS, Nasdaq: BONT, Nasdaq: CPWM, Nasdaq: BKRS, Nasdaq: BEBE, NYSE: BKE, Nasdaq: CACH, Nasdaq: CMRG, Nasdaq: CATO, NYSE: CBK, Nasdaq: CTRN, NYSE: PSS, Nasdaq: DEST, Nasdaq: DBRN, NYSE: DSW, Nasdaq: FINL, NYSE: FL, Nasdaq: GYMB, NYSE: GES, NYSE: JCG, NYSE: JNY, Nasdaq: JOSB, NYSE: NWY, NYSE: JWN, NYSE: MW, Nasdaq: SYMS, Nasdaq: PLCE.

Talbot's (NYSE: TLB) – Fool Me Twice, Shame on Me!



Talbot’s (NYSE: TLB) shares are light 39%, trading at just $2.75 through midday Tuesday after the company disappointed investors with a still soft outlook. It’s a shame too, as its first quarter results exceeded analysts’ consensus EPS expectations for $0.03; the company earned $0.08 in adjusted EPS excluding special items.

Revenue was a bit light in Q1, at $301.3 million, short of last year’s $320.7 million and analysts’ expectations for $306 million, based on FactSet (NYSE: FDS) data. Same-store sales, including internet and catalog sales but excluding stores scheduled to close, fell 8.2% in Q1. The company’s CEO, Trudy Sullivan, said sales were uneven throughout the quarter, with a stronger March than February and April. She blamed an "inconsistent customer response to our merchandise assortments, a challenging competitive environment and high levels of promotional activity." February weather no doubt played a role, but April should have benefited from Easter.

The company’s margins were squeezed, with its cost of sales rising 800 basis points on the retailer’s need to markdown items and on what’s seems like aimless promotional activity. Talbots saved 60 basis points on its SG&A line, but at what cost. It garnered the margin on a reduction to performance based manager incentive compensation. Thanks to weaker than expected quarterly sales, Talbots ended the quarter with 13.1% higher inventory than the prior year, and now it’s got to move that load.

What greatly troubled investors Tuesday was that sales through Q2 were down low-teens against the prior year, so far. Margins are expected to tighten significantly, with gross margin looking to squeeze 1000 basis points. The company indicated that turbulence was to be expected in this transition year, but perhaps its lack of execution in fashion identification and its strategic vision as to its target market were not on par either.

New York CityTalbots is going to close 110 stores over the next three fiscal years, with 83 coming this year. It’s trying to further identify itself with Americans as a high end destination that’s also fashion conscious, something that’s been apparently lacking. Yet, maybe the problem is that there’s just no room for The Talbots, and it should close a few hundred more stores. I’ve speculated in the past that the bland brand may have been tarnished beyond repair and should have been left for dead the first time. At the high end, Talbots competes against the stronger brands at Saks (NYSE: SKS), Bloomingdales and Nordstrom (NYSE: JWN). The value conscience high-end shopper is likely spending carefully at the nifty T.J. Maxx (NYSE: TJX), Syms or Filene’s Basement (Nasdaq: SYMS).

The company fumbled once last decade, and is currently looking like it might outdo itself this decade. An analyst at Miller Tabak certainly seems to think so, cutting his recommendation to sell from neutral Tuesday. There’s an old adage that reads, “Fool me once, shame on you; fool me twice, shame on me.” Unfortunately, it seems as though more than a few investors are feeling shame today.

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Article interests investors in: S&P Retail ETF (NYSE: XRT), Wal-Mart (NYSE: WMT), Pier 1 Imports (NYSE: PIR), Ethan Allen (NYSE: ETH), Hooker Furniture (Nasdaq: HOFT), Home Depot (NYSE: HD), Lowes (NYSE: LOW), Apple (Nasdaq: AAPL), Best Buy (NYSE: BBY), The Limited (NYSE: LTD), Chicos (NYSE: CHS), Ann Taylor (NYSE: ANN), The Gap (NYSE: GPS), Macy’s (NYSE: M), JC Penney (NYSE: JCP), Nordstrom (NYSE: JWN), TJX Company (NYSE: TJX), Kohls (NYSE: KSS), Costco (Nasdaq: COST), Target (NYSE: TGT), Wet Seal (Nasdaq: WTSLA), Hot Topic (Nasdaq: HOTT), American Eagle Outfitters (NYSE: AEO), Aeropostale (NYSE: ARO), Abercrombie & Fitch (NYSE: ANF), Saks (NYSE: SAK), Tiffany (NYSE: TIF), Talbots (NYSE: TLB), Lumber Liquidators (NYSE: LL), Builders Firstsource (Nasdaq: BLDR), Fortune Brands (NYSE: FO), Leggett & Platt (NYSE: LEG), Tempur-Pedic International (NYSE: TPX), Acuity Brands (NYSE: AYI), La-Z-Boy (NYSE: LZB), Select Comfort (Nasdaq: SCSS), Sleepy’s (NYSE: ZZ), Furniture Brands (NYSE: FBN), Natuzzi (NYSE: NTZ), Sears (Nasdaq: SHLD), Dillard’s (NYSE: DDS), Bon-Ton (Nasdaq: BONT), Cost Plus (Nasdaq: CPWM), Baker’s Footwear (Nasdaq: BKRS.OB), Bebe Stores (Nasdaq: BEBE), The Buckle (NYSE: BKE), Cache (Nasdaq: CACH), Casual Male (Nasdaq: CMRG), Cato (Nasdaq: CATO), Christopher & Banks (NYSE: CBK), Citi Trends (Nasdaq: CTRN), Collective Brands (NYSE: PSS), Destination Maternity (Nasdaq: DEST), Dress Barn (Nasdaq: DBRN), DSW (NYSE: DSW), Finish Line (Nasdaq: FINL), Footlocker (NYSE: FL), Gymboree (Nasdaq: GYMB), Guess (NYSE: GES), J. Crew (NYSE: JCG), Jones New York (NYSE: JNY), Jos. A Banks (Nasdaq: JOSB), New York & Co. (NYSE: NWY), Men’s Wearhouse (NYSE: MW), Syms (Nasdaq: SYMS), The Children’s Place (Nasdaq: PLCE).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

New York City
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