Retailers not doing so well

[Balog]

From the always cheerful and upbeat ZeroHedge. I would imagine a good chunk of this is people buying online more, combined with the inflation and unemployment rates the feds keep changing their reporting structure to avoid admitting to.

http://www.zerohedge.com/node/488920

Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%

Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%

Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%

JC Penney Thrilled With Loss of Only $358 Million For the Quarter

Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%

Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%

Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores

Gap Income Drops 22% as Same Store Sales Fall

American Eagle Profits Tumble 86%, Will Close 150 Stores

Aeropostale Losses $77 Million as Sales Collapse by 12%

Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%

Macy’s Profit Flat as Comparable Store Sales decline by 1.4%

Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%

Urban Outfitters Earnings Collapse by 20% as Sales Stagnate

McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%

Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster

TJX Misses Earnings Expectations as Sales & Earnings Flat

Dick’s Misses Earnings Expectations as Golf Store Sales Plummet

Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%

Lowes Misses Earnings Expectations as Customer Traffic was Flat

[TommyGunn]

Obama promised "hope and change."   I guess he meant we'd be hoping we'd have some change left in our wallets and bank accounts after his 8 years ended .....

[RevDisk]

Ayep. Folks are buying less stuff they don't need, and fixing more stuff that breaks instead of buying new.

[fifth_column]

Ayep. Folks are buying less stuff they don't need, and fixing more stuff that breaks instead of buying new.

I thought that was unpatriotic.  I recall being told to do our patriotic duty as consumers and buy more stuff in order to alleviate the recession under Bush II.

I'm starting to think requiring constant, unending growth might not be the best business model after all . . .

[Boomhauer]

Some of those companies are just shitty companies and it's no surprise to see the losses.

[Balog]

[Balog]

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.2 percent after rising by a revised 4.7 percent in March, which was the largest gain since November.

Economists had expected orders for these so-called core capital goods to rise 0.2 percent last month after a previously reported 2.9 percent jump in March.

The report could cause economists to dial down expectations for a sharp rise in growth in the second quarter after the economy sputtered in the first three months of the year.

http://www.reuters.com/article/2014/05/27/us-usa-economy-durablegoods-idUSKBN0E71GI20140527

[brimic]

But, but, but, I thought we have been in full recovery mode since 2009!!!
Stimulus!!

[Balog]

US retailers’ first-quarter earnings are trailing analysts’ estimates by the widest margin in 13 years after bad weather and weak spending by lower-income consumers intensified competition.

Chains are missing projections by an average of 3.1%, with 87 retailers, or 70% of those tracked, having reported, researcher Retail Metrics Inc. said in a statement today. That’s the worst performance relative to estimates since the fourth quarter of 2000, when they missed by 3.3%. Over the long term, chains typically beat by 3%, the firm said.

http://www.bloomberg.com/news/2014-05-23/u-s-retailers-missing-estimates-by-most-in-13-years.html

[RoadKingLarry]

I thought that was unpatriotic.  I recall being told to do our patriotic duty as consumers and buy more stuff in order to alleviate the recession under Bush II.

I'm starting to think requiring constant, unending growth might not be the best business model after all . . .

I see too many examples of "expecting constant, unending growth". I've always thought it was kind of a stupid business model.
I've seen a few of the major cities and towns around here actually plan there budgets based on expected growth of revenue and when their revenue fals on it's ass they're in panic mode.
Work to drive growth but plan for no more, or even a little less than what you did last year/quarter/month.

One of the big indicators I'm seeing in my business is a fairly sharp decline in new orders for service or service upgrades. We typically see a drop off just before Christmas and then a spike afterwards, I've seen it for 12 of the 13 end of year cycles I've been in this job, we got the usual drop off in December, but the first of the year spike didn't happen.
I don't know if it means anything or not.

[Balog]

I see too many examples of "expecting constant, unending growth". I've always thought it was kind of a stupid business model.
I've seen a few of the major cities and towns around here actually plan there budgets based on expected growth of revenue and when their revenue fals on it's ass they're in panic mode.
Work to drive growth but plan for no more, or even a little less than what you did last year/quarter/month.

One of the big indicators I'm seeing in my business is a fairly sharp decline in new orders for service or service upgrades. We typically see a drop off just before Christmas and then a spike afterwards, I've seen it for 12 of the 13 end of year cycles I've been in this job, we got the usual drop off in December, but the first of the year spike didn't happen.
I don't know if it means anything or not.

You'll always find real estate agents who tell you perpetual growth above inflation is inevitable, and when it doesn't happen it's just a fluke that will never be repeated in your lifetime.

[HankB]

Here's my take:

Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4% People have found there are other places to buy cheap crap from China.

Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%  Customers may return when they can safely use credit cards here.

Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%  More cheap crap from China, and plunging quality of both Craftsman and Kenmore brands.

JC Penney Thrilled With Loss of Only $358 Million For the Quarter  Still recovering from their last CEO's idiotic "re-imagining" of the store.

Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%  Puzzling - we usually do OK at Kohl's.

Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%  Not going to spend money on a membership so I can buy a 10lb box of corn flakes.

Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores  Priced a third higher than other retailers, this is no surprise.

Gap Income Drops 22% as Same Store Sales Fall Don't shop here - nothing I want.

American Eagle Profits Tumble 86%, Will Close 150 Stores  Don't shop here - nothing I want.

Aeropostale Losses $77 Million as Sales Collapse by 12%  Don't shop here - nothing I want. Not going to spend $$$ to wear their logo shirts and be a walking ad for their brand.

Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%  Prices aren't very good on small stuff, and usually on large items I have to get them to do a "price match" with a competitor like Fry's.

Macy’s Profit Flat as Comparable Store Sales decline by 1.4%  My mother does SOME shopping here, but of late says their merchandise - stuff like clothing - has gone downhill.

Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%  The store for folks who don't like to get all dressed up as if they was going to Wal-Mart.

Urban Outfitters Earnings Collapse by 20% as Sales Stagnate  Don't shop here, nothing I want

McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%  Not the best of the fast-food burgers, but "safe" airport fare.

Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster  Attendance seems stable at the local stores

TJX Misses Earnings Expectations as Sales & Earnings Flat  Don't shop here, nothing for me.

Dick’s Misses Earnings Expectations as Golf Store Sales Plummet  Crap store - their coupons explicitly EXCLUDE guns & ammo; they don't WANT my business, so I take it elsewhere.

Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%  Shouldn't complain, as they're going better than most. Should hire new people to set expectations.

Lowes Misses Earnings Expectations as Customer Traffic was Flat   Ditto with Home Depot.   

[French G.]

Kind of headlines picked for maximum panic. Lot of mall type store there, no surprise they are tanked. But 220 million loss for Walmart? That is significantly less of an issue than 358 million for Sears. McD loss of 66 million, is that even much of a statistical burp?

[brimic]

Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%  Puzzling - we usually do OK at Kohl's.

The local AM radio guy talked about this one at length a week or so ago.
It seems to be about the CEO being tone-deaf about who is core customer is- Suburban Middle class Moms. Kohl's has done several marketing campaigns over the last few years aimed at urban/hip-hop lifestyles.

[RevDisk]

Winter was also unusually cold and brutal. I know I spent more money on heating and related stuff that I didn't spend on consumer spending. Wonder how much of a factor that was.

[HankB]

The local AM radio guy talked about this one at length a week or so ago.It seems to be about the CEO being tone-deaf about who is core customer is- Suburban Middle class Moms. Kohl's has done several marketing campaigns over the last few years aimed at urban/hip-hop lifestyles.

That's a cogent observation - I've been seeing a lot of oddball/weird stuff on the discount racks at Kohl's for more than a year - I guess the store's buyers aren't willing to admit that certain fringe demographics would prefer to steal/shoplift their clothes rather than buy them.

[KD5NRH]

Kind of headlines picked for maximum panic. Lot of mall type store there, no surprise they are tanked.

Yup; doesn't matter how many trillions of dollars it might be, if <3% change even gets your attention, your analysts need to take a Prozac and go away.

[RocketMan]

Kind of headlines picked for maximum panic. Lot of mall type store there, no surprise they are tanked. But 220 million loss for Walmart? That is significantly less of an issue than 358 million for Sears. McD loss of 66 million, is that even much of a statistical burp?

Actually a decline in profit, not a loss.  Same for Target.  Both companies are still quite profitable, just that profits are down.

[MillCreek]

Meanwhile, we do more and more of our shopping via Amazon Prime.

[Perd Hapley]

When Obama promised us a "laser-like focus on jobs," he must have been thinking Crimson Trace.

[Marnoot]

The Y-axis on that is awfully over-zoomed to make it more sensational looking. Starts at 62.5% in 1978, peaks at ~67% in '99/'00 and ends up back at 62.5% in '14.

[Scout26]

The Y-axis on that is awfully over-zoomed to make it more sensational looking. Starts at 62.5% in 1978, peaks at ~67% in '99/'00 and ends up back at 62.5% in '14.

What's 5% of 300 million?   That's not a statistaclly insignificant number.

[Monkeyleg]

In my own little corner of the economy, sales are the worst I've ever seen. I'm lucky to make a profit of $20 in any one day.

I can't say it's the overall economy, though. With all of the panic buying last year, people bought everything they thought they needed or wanted in terms of gun stuff, maxed out their credit cards, or both.

[brimic]

In my own little corner of the economy, sales are the worst I've ever seen. I'm lucky to make a profit of $20 in any one day.

I can't say it's the overall economy, though. With all of the panic buying last year, people bought everything they thought they needed or wanted in terms of gun stuff, maxed out their credit cards, or both.

I bought my first new car in 10 years this last weekend- because I had to. I have been driving a 16 year old car on the verge of serious mechanical breakdown for the last few years. I would have driven it for another 2-3 years if it were worthwhile.

[Boomhauer]

I bought my first new car in 10 years this last weekend- because I had to. I have been driving a 16 year old car on the verge of serious mechanical breakdown for the last few years. I would have driven it for another 2-3 years if it were worthwhile.

I drive a 15 year old truck. It's got 223k on it. That bitch is going to 400k if not more. Parts are still cheaper than a monthly payment.