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What CEOs Are Really Worried About - Discounting And Obamacare
It will likely come as no surprise that, despite a 'surging' economy (based on today's inventory-stacked GDP), that CEOs are less than upbeat about the future when one scratches below the surface of 5-second soundbites. As Bloomberg's Rich Yamarone notes, from the most recent quarter's earnings calls, two critical themes emerge as top of mind for CEOs - consumer-related companies remain skittish about the ability of households to spend without a heavily promotional environment and companies cited upcoming healthcare legislation as a hurdle to performance and profitability.
Coldwater Creek [CWTR] Earnings Call 12/11/13: “While the third quarter was a challenging period for us, we were able to react quickly to the trends in the business by improving our assortments and refining our marketing plans. We have seen an improvement in our sales trends and conversion rates. However, we are seeing an increasingly competitive and highly promotional environment, traffic remains challenging and the majority of the holiday season lies ahead of us.”
Bebe Stores [BEBE] Earnings Call 11/7/13: “While we are pleased with the progress that we have made in first quarter of 2014, we are facing a few headwinds as we enter second quarter. As it has been widely reported, the macroeconomic environment has been increasingly difficult starting the last week of September and continued into October, which has resulted in some decline in traffic trends as well as creating a highly promotional environment.”
Cosi Inc [COSI] Earnings Call 11/14/13: “The increase in labor and related benefits as a percentage of restaurant net sales was due in large part to the deployment of additional hourly labor in an effort to improve speed of service and guest satisfaction, combined with the deleveraging impact of the comparable store sales decline on the fixed portion of our labor costs. We were also adversely impacted in the quarter by higher employee health insurance costs.”
Flowers Foods [FLO ] Earnings Call 11/7/13: “You look at employ-related costs, we’re seeing increase there. You have healthcare increases. It’s kind of some of the typical things you would expect from an employee perspective.”
Wal-Mart [WMT] Earnings Call 11/14/13: “The retail environment, both in stores and online, remains competitive. At the same time, some customers feel uncertainty about the economy, government, jobs stability and their need to take care of their families through the holidays. Walmart has aggressive plans to help our customers enjoy the holiday season..."
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What are CEOs really worried about? Making less than the next CEO. Its plainly obvious they do not care AT ALL about what happens to their companies.
correct, moreover, society is forced to carry the real cost of their bad decisions...
for now.
CEOs and corporate taxes are for firms the price to pay to get that much appreciated legal status that "corporation" is.
They don't pay taxes now as is that is why they are concerned. They pass off the cost of any taxes they actually have to pay onto the consumer in the price of the goods and services. The end user almost always pays the tax not the business. If they can't price that into the margin then they actually pay the tax in a real sense.
CEOs are sad they have to wait one year before they dump their employees' healthcare onto the Marketplace called Obombercare.
I suspect that the companies are investing cash into inventory so that later, when things get dicey, they can let more workers go and still have plastic crap to sell. Then they can vote themselves huge bonuses, cash in their options based on inflated stock prices, and fly out to their Pacific islands and retire.
The thought that rising sea levels resulting from their prior activities might drown them in time helps a bit.
:>)
Enjoy.
Craig
just buy local... who cares if you only can buy 1/5 of the same amount of stuff.. mostly likely better quality and people usually don't need the extra 4/5 of junk anyway
At some point Wal-Mart will have to look for corporate sponsoring of buying shit and giving it away for free (ie: this giveaway sponsored by Wells Fargo.. you just have to transfer your credit debt to their cards)
At some point... They've passed that point if it wasn't for things like EBT and govt. contracts to supply things like military bases at a discounted rate they'd be bankrupt. Same with the airlines. These companies live off of Uncle Sugar's largess.
yes, easy to see that the areas of growth come from grabbing tax money since they don't have to actually deal with real economics (MIC, Healthcare/Pharma, college tuition, food sales)
I'd think they'd be worried about how they can increase their access to margin debt to profit off the FED-driven endless stock market bull - except for the mining CEOs who are probably mostly just worried that they might miss the short-bus that takes them to the 'office' every morning.
....man i wish that short bus was taking them to the yard for an hour of exercise with the brotha's
I'm with you on that.
Why are these guys afraid of Obamacare? It is the law of the land and set in stone. Not like they are making changes to it every other week. Businesses should be able to plan ahead for this. You really think the greatest, smartest, bestest Prez ever would leave you guys hanging?
Those poor corporations, whatever will they do?
Tears, crocodile tears for them, *sniff*.
This is a common sentiment among the young, but there are always good people, even in bad institutions.
It's called, being a Dad.
Don't get too choked up, it'll probably just lead to higher prices when they go bust... their margins have been compressed to the max and they can't pass on any price increases to consumers... however, consumers still need an avenue... while the concept of buying locally is great and works for very many products, I'm not sure I want to wear a sweater knitted by my cousin... nor trade some peppers and tilapia for it.
My mother-in-law knits fine sweaters and quilts beautiful quilts. She cooks fresh fish and jellies peppers right nice.
I dunno Macho... the local thing might just work.
It'll work... we won't just starve and die... but it's a question of want... Localization is gaining steam because consumers find better value in local products because the quality tends to be better across the board, which is great and I enjoy participating in the process... however, there are plenty of products that we all love that really can't be replicated if we turn back the dial 50+ years on manufacturing and diplomacy and it will take more than a while for the market to meet the demand via local means.
In the end, anyone can get some pots and grow tomatoes in the back yard... it's not hard... but, tomatoes don't make the world go round.
while the concept of buying locally is great and works for very many products, I'm not sure I want to wear a sweater knitted by my cousin... nor trade some peppers and tilapia for it
Of course you can't buy everything local, no one would suggest that as a good current buying strategy. From what I can tell it's about being more aware of where the products you are buying are coming from.
You can buy American made clothing, probably the most mainstream example being American Apparel.
Consumers will buy or spend on: food, rent, transportation, utilities, medical, and communications, in that order. If they have anything left after that, they will either buy toys or invest/save money, or both.
The scarey part of this equation is that, when they don't have enought for the last five items listed, they will simply do without (in reverse order). When they also don't have enough for food, they will rob, steal, and kill to get it.
At some point in the race to the bottom those people will do almost anything to feel good. It may be eating a lot (part of the reason our society is becoming obese), it may be veging out on the couch in front of the TV, or it may be drugs. When it is drugs, for many that moves into first place ahead of food. Others become addicted to gambling, sex, or alcohol. Again, for addicts, their addiction moves way up the ladder of consumption, frequently to the point of inducing criminal activities in order to support their need.
"Inventory stacked"; I believe you, but thats the THIRD time you say it.
At a given moment that inventory will just disappear...and as we know growth is based on consumption, investment and export.
As USA IMPORTS...only the other two create growth...
So lets see...Is the US investing?
Yes in fracking.
Yes in assets thanks to HFT!
Is the US consuming?
You tell me!
Will the trade deficit decrease? The frackers say : yes Siree!
So 2014 will be a tipping moment year; all over the world.
growth only comes from customers...the point of sale...not "consumers" or "consumption." only crazy people bet the economy on "consumption." in other words "consumption" is something that happens in the future..."must be demanded" first...but not necessarily given. what is given happens "at a price"...one could argue that happens in the future as well actually. (i.e "before i sell you my natural gas i will ask that you purchase a futures contract in order for the price to be determined.") indeed...after establishing said price "literally in the future" i might then might demand you pay for options and insurance as well before said product leaves the shore. and even then "the terms of the agreement can change." ("force majeure.") having said that it is possible having gone through all this "that you finally get the friggin' product i've already paid for many times over jerkwad." thus leading to the claim "the dollar is still the world's reserve currency...because before i could get one stinkin' dollar i had to spend ten billion. of those very same dollars." the lesson the folks can and should take away from all this is in my view "there is always a cash shortage. ALWAYS." you can have literally a thousand tons of gold...but "if you're trading privileges are revoked" that can be more dear than all the gold ever in existence...past, present and future.
Yes, the unsustainable system of Obamacare will save the day, for the elderly, and the youth to pay.
>> Walmart's aggressive plans to help their customers enjoy the season <<
....................Wow, are they closing for two weeks?!?
F#$k the CEO's, they ate Ozero up with a spoon, contributed highly to both campaigns, they are his biggest cheerleaders. So this comes under the heading of (tough shit morons) no sympathy from me.
What CEOs are really worried about:
SOMEONE WITH THE FUCKING BALLS TO AUDIT THEIR BOOKS!!!!!!!!!!!!!!!!!!
Call in the cooks, to audit the books, so the crooks can get offs the hooks.
Please, CEOs aren't "worried" about shit. On average they make 300x their employees.
What garbage.
For now, society must carry the cost/risk of their bad choices. (At least until their neck meets the blade)
End the Fed.
Of course, folks will have to spend the entire amount of their new and enhanced deductibles under JabbaHutCare before their new and enhanced JabbaHutCare policies kick in. This may make for a couple of really shitty quarters of descretionary spending.
I'm just waiting to see what creative excuses they will use to report the numbers for the worst Christmas shopping season evah.
Air Force One went down in the pacific on its approach into Honolulu International Airport...President Obama was saved but Muttley was lost at sea.
http://crazy-frankenstein.com/free-wallpapers-files/cartoons-wallpapers/...
what is all the fuss about o care? really, are you an over weight slob, un healthy s o biach? op the fuck out and pay the penalty and forget about it. money ahead and set it a side for trip out of country or cash payment for whatever comes up that needs to done. fucken eh...
CEO are worried about lack of payable demand which will only get worse with higher healthcare costs
CEOs of obamacare exempt corporations and their lackeys are just pissed off that the competition that didn't get exemptions won't die faster. If a corporation is a person, isn't selling it slavery, and selling stock at least pimping?