Blaming Soft Retail on all the Wrong Things

Thursday, November 30, 2006 | 09:51 AM

The latest retail sales data is out, and its rather mixed:

-Gap fell 2 percent. They expect pressure on profit margins to continue into December.

-Abercrombie & Fitch sales fell 3 percent in the month;

-American Eagle Outfitters (Charts) posted good numbers -- plus 14% -- but was below expectations for a 14.8% gains;

Pier 1 Imports saw sales tumble 15.3%, despite aggressive discounting / advertising;

Ann Taylor blamed warm weather for sales falling 4.3%, especially "sweaters, outerwear and cold weather accessories."

Wal-Mart, JC Penney and Costco Wholesale all missed estimates. Those stocks are down 1.1%, 2.9%, and 1.9%, respectively. Bebe Stores was even worse, falling 9% after it fell short of estimates.

- Sources: Warm weather chills holiday sales,
Shoppers Await Better Bargains

Meanwhile, all manner of silly blame casting is going on as to who or what is responsible for the problematic retail sales. With over half of the reporting companies missing expectations, it is rather silly to blame all of this on Wal-Mart.

In most years, Retailers blame Snow in the Winter in the Northern climes; this year, they are blaming the weak sales on warm weather. Apparently, it is never managements fault, nor does anyone blame the tiring consumer or a weakening housing / Mortgage App slow down, it is the weather - REGARDLESS OF WHAT THE WEATHER IS.

Considering what the most recent retail sales data looks like, it is no surprise that the sector is flailing about looking for something -- or someone -- to blame:


If you want a clue as to what is really going on, try this compare and contrast:

Wal-Mart Trips as It Changes a Bit Too Fast

Tiffany Profit Increases 23%

There's your answer . . .


One more thing: The WSJ has a good interactive chart that allows you to track the performers of a dozen top retailers:


Its a public URL, No subscription required.


Weak November Start Hurts Retailers
As Wal-Mart Presents Grim Forecast

WSJ, November 30, 2006 9:18 a.m.

Build Your Own Chart: A dozen major retailers
WSJ, November 30, 2006

Warm weather chills holiday sales
Parija B. Kavilanz, November 30 2006: 9:41 AM EST

Thursday, November 30, 2006 | 09:51 AM | Permalink | Comments (16) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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Thanks again BR.
I can't stand all the chatter about Walmart. Wrong product mix, bad weather, good weather, growing too fast, growing too slow, failures in outer Mongolia etc.

Their customer base has been left out of the liquidity based boon. Ergo, their sales are down. The very high end still has cash to burn, ergo, the high end retailers are doing well. What is so hard to understand here?

As an aside, don't be surprised if the tables turn once the economy hits a real downturn. Everyone could be flocking to the low price leader.

Posted by: advsys | Nov 30, 2006 10:24:43 AM

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