- Online Retail Industry In The US Will Grow 10% Annually, Be Worth $279 Billion In 2015 (Forrester)
- Luxury makes a comeback for the well-heeled: As economy improves, America’s richest loosen purse strings (MSNBC)
- Consumer spending cooled more than forecast in January as rising food and fuel prices caused Americans to cut back on post-holiday visits to malls and restaurants (Bloomberg)
- Exporting retail brands can be tough sell: Best Buy’s retreat in China and Turkey this week is a common scenario for retailers abroad (Star Tribune)
- Toys R Us considering $800 million initial public offering for April (Reuters)
- Why Wal-Mart is proving the surprise victim of America’s uneven recovery (Telegraph)
- Use It Up, Wear It Out: Consumers Hold On to Stuff Longer (NY Times)
- Sears CEO Pick Leaves More Questions Than Answers: leaves many questioning what direction the company is heading (ABC News)
Archive for February, 2011
Retailer Earnings Scorecard
Published February 25, 2011 Uncategorized Leave a CommentTags: amazon.com (amzn), macy's (m), retail earnings, retail trends, target (tgt), walmart (wmt)
About a third of the retailers we cover have reported fiscal year results in the past few weeks. It’s clear that most companies saw substantial improvement in their top and bottom lines in 2010. However, looking at longer-term performance helps separate the winners from the losers and shows who outperformed during the recession.
Below we take a look at sales and earnings growth for 24 retailers who have reported 2010 results so far this year, sorted by 5-year compound annual growth. We will update the scorecard as earnings season continues:
How Retailers Are Coping With Rising Costs
Published February 24, 2011 Uncategorized Leave a CommentTags: abercrombie & fitch (anf), inflation, lowe's (low), macy's (m), retail trends, tjx, wal-mart (wmt)
As major retailers report 2010 results, the focus will continue to be on the surging costs of commodities and labor. As oil once again hovers above $100 per barrel and cotton prices stand at a 150-year high, retailers have tough choices as far as raising prices or passing the costs onto consumers.
Gas prices at the pump are currently running about 20% higher than last year and the highest since October 2008. With oil above $100/barrel don’t be surprised to see gas prices hit $4/gallon again by the summer. Economists estimate each 1 cent increase in gas prices takes $1 billion out of consumers’ pockets. The last thing shoppers want is to see is higher prices.
Yet retailers are contending with not just surging input costs, but much higher labor and manufacturing costs in historically cheap regions such as China. This has led companies to move production to cheaper alternatives like Vietnam and Bangladesh. Larger retailers will be able to push some of these costs onto suppliers and higher-end chains should have no problem raising prices, but discount shops will have a hard time preserving margins.
- U.S. Consumers Feel the Pinch of Surging Oil Prices (Yahoo! Finance)
- Apparel Retailers Must Get Creative To Combat Rising Costs (Nasdaq)
- U.S. Consumers Brace for Higher Food and Gas Costs in 2011 and Will Manage Their Food Budgets Differently as a Result (NPD)
- Clothing prices to rise 10 pct starting in spring: surge in raw material and labor costs is squeezing retailers and manufacturers who have run out of ways to pare expenses (AP)
- Inflation Fears Expected to Overshadow Retail Earnings (CNBC)
- The near-zero inflation era may be ending. Prices are rising slightly, and economists expect a steady climb as the recovery gains steam (USA Today)
- Retailers, wholesalers cope with surging prices: inflation once again is reaching into pocketbooks from grocery aisles, clothing racks, tire centers and other consumer haunt (KC Star)
- Wegmans freezes prices on basic necessities: has pledged to not raise prices on 40 products this year, despite rising commodity and energy prices (CNN)
Below we take a look at what retail executives had to say on their Q4 conference calls: Continue reading ‘How Retailers Are Coping With Rising Costs’
Retailers Kick off the Earnings Parade
Published February 22, 2011 Uncategorized Leave a CommentTags: consumer confidence, home depot (hd), macy's (m), office depot (odp), retail news, wal-mart (wmt)
Earnings season is in full swing, as four major retailers including 3 of America’s top 15 largest retailers reported 4th quarter and fiscal year results this morning. Expectations were running high as consumers have regained confidence, but worries about inflation and persistently high unemployment will be the focus for the rest of the year.
Consumer Confidence: The morning got off to a good start, as The Conference Board said consumer confidence jumped in February to its highest level in 3 years. The index rose to 70.4, up from 64.8 in January. The Present Situation Index improved to 33.4 in February from 31.1, while the Expectations Index increased to 95.1 from 87.3 last month.
Lynn Franco, Director of The Conference Board Consumer Research Center, said: “The Consumer Confidence Index is now at a three-year high (Feb. 2008, 76.4), due to growing optimism about the short-term future. Consumers’ assessment of current business and labor market conditions has improved moderately, but still remains rather weak. Looking ahead, consumers are more positive about the economy and their income prospects, but feel somewhat mixed about employment conditions.”
Walmart: The world’s largest retailer reported results that beat analyst estimates, but struggles at its North American stores continued. Total sales in the 4th quarter increased 2.5% to $115.6 billion, but US same-store sales dropped 0.8% (the 7th straight quarterly decline), which consisted of a 1.8% comparable sales drop at Walmart and a comparable sales gain of 4.5% at Sam’s Club. Net Income jumped 27% to $6.06 billion and Diluted EPS rose 36% to $1.70 for the quarter, while adjusted EPS of $1.34 beat the consensus estimate of $1.31. Continue reading ‘Retailers Kick off the Earnings Parade’
Friday Retail Reads
Published February 18, 2011 Uncategorized Leave a CommentTags: consumer spending, retail news
- Marcus & Millichap report: Retail ready for a rebound? – reason to believe in a long-awaited rebound for the country’s retail real estate sector (RE Journals)
- Retailers, wholesalers cope with surging prices: Inflation — which had become a vestige of long-ago economic ills — once again is reaching into pocketbooks from grocery aisles, clothing racks, tire centers and other consumer haunts (KC Star)
- Retail sales will rise 4 percent in 2011, continuing trend of improving consumer spending last year (NRF)
- Jessica Simpson’s empire: $750M and counting – Add in a career separates line and a full ready-to-wear collection, which she plans to offer this year, and that total is expected to grow past the $1 billion mark (CNN)
- Mobile shopping is breaking down the walls of traditional brick-and-mortar stores by giving consumers the ability to easily find a cheaper price in a store down the street (stltoday.com)
- The American mall: Back from the dead – department stores are making a comeback, under-performing stores closing, and there’s a new, more inclusive mall mentality (Fortune)
- Fissures Open in Fortunes of ‘the Consumer’: It’s impossible to talk about the U.S. consumer anymore without clarifying which one – the upper-income investor, the middle-income homeowner, and the lower-income worker (WSJ)
