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CEOs Warn Q2 "Less Robust" Than Expected

Tyler Durden's picture




 

"[W]e’re concerned about the retail demand environment, and a little less bullish than earlier in the year due to a slower housing market, some inconsistency at retail, and an economy that’s not quite as robust as expected," is how one CEO sums up Q2 so far and as Bloomberg's Rich Yamarone notes, the CEO Economic Sentiment Index remains mired at the lows of the year with no Q2 bounce whatsoever (despite hopes for all that pent-up demand). Retailers continue to complain of a highly promotional environment amid deteriorating traffic; and with the index at 49.1 (below the key 50 - expansion - level) it appears the hope of a Q2 bounce is a little premature.

The CEO Sentiment Index remains stubbornly unenthusiastic...


J Crew Group Inc. [JCG] Earnings Call 6/5/14: “I think it was a disappointing quarter across all our business, or all our product categories rather. And there’s no secret that the retail environment was challenging in the first quarter. Several factors we would point to that weighed on the gross margin results. First, it was traffic headwinds that we saw in Q4 persisting into Q1 and that affected all of our store formats. Secondly, the increased promotional activity that we saw in Q4 also extended into Q1 likely related to those same traffic trends.”

Navistar Intl [NAV] Earnings Call 6/5/14: “The industry continues to struggle with driver shortages. But customer sentiment is increasingly positive on a number of fronts, freight levels, rates, and profitability. This has spurred an increase in new orders and we believe retail sales in the second half of the year will be stronger than we had planned and thus we’re revising our forecast to 225,000 units to 235,000 units for Class 8.”

Hooker Furniture [HOFT] Earnings Call 6/5/14: “Orders for the quarter were up over the same period last year, but honestly not quite as robust as we would have hoped for coming out of a relatively strong spring furniture market. While we are very well positioned internally, we’re concerned about the retail demand environment, and a little less bullish than earlier in the year due to a slower housing market, some inconsistency at retail, and an economy that’s not quite as robust as expected.”

J.M. Smucker [SJM] Earnings Call 6/5/14: “2014 results were achieved despite challenges in the current operating environment that included a sluggish economy, heightened competitive activity in several key categories and foreign exchange headwinds. While these challenges are expected to continue into the new fiscal year, history demonstrates our ability to manage near term issues.”

Dollar General Corp [DG] Earnings Call 6/3/14: “Today more than ever, given the economic environment that has lingered for quite some time, affordability has now become the focus of our core customer. What affordability means to our customer today is the trade-off between price and quality that best fits her budget. At times, she is showing a greater willingness to compromise on quality or functionally to get a lower price point to stretch her money.”

Brown-Forman [BF/B] Earnings Call 6/4/14: “Looking at economic and industry trends through a geographic lens, the U.S. continued to experience healthy growth, notwithstanding the slow start to the calendar year. The developed markets outside the U.S. showed signs of improvement, driven largely by better conditions and larger developed markets of Europe.”

 

Source: Bloomberg Brief

 

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Fri, 06/13/2014 - 17:40 | 4854987 NOTaREALmerican
NOTaREALmerican's picture

Uh-oh,   looks like they'll need to increase the stock buy-back scams.

Fri, 06/13/2014 - 17:55 | 4855034 Thought Processor
Thought Processor's picture

 

 

There is actually a company called 'Hooker Furniture'.

 

 

Fri, 06/13/2014 - 17:57 | 4855039 kliguy38
kliguy38's picture

its been an unusually sunny summer here 

Fri, 06/13/2014 - 18:02 | 4855049 graneros
graneros's picture

"First, it was traffic headwinds that we saw in Q4 persisting into Q1 and that affected all of our store formats."

"Traffic Headwinds" is this newspeak for weather?

Fri, 06/13/2014 - 18:14 | 4855066 ZerOhead
ZerOhead's picture

< A robust economy

< Afrobust economy

Your 2014 Q2 predictions for the ongoing Obama recovery... AKA "The Miracle on Ice..."

Fri, 06/13/2014 - 18:26 | 4855110 I am more equal...
I am more equal than others's picture

 

 

 

The economy has erectile dysfunction and all the viagra in the world won't get this hard.

Enjoy deflation, get off ecstasy, and let nature take its course. 

If not, this will be a eunuch economy.

 

Fri, 06/13/2014 - 18:48 | 4855170 johngaltfla
johngaltfla's picture

Let's see...

 

The sky is blue.

Obama is a dictator.

Republicans and Democrats are lying scum.

The Fed steals from and starves old people.

The economy sucks.

Any more obvious observations from our CEOs?

Fri, 06/13/2014 - 19:09 | 4855232 disabledvet
disabledvet's picture

"The time to stop bullshitting is now"?

Sounds like everyone else has their hands full. "We in fact have a two billion dollar loss" sounds perfectly timed right now.

Fri, 06/13/2014 - 19:25 | 4855271 knukles
knukles's picture

Lies.  All lies and confetti enemas.

Fri, 06/13/2014 - 20:18 | 4855400 williambanzai7
williambanzai7's picture

Are you referring to Sears Frobust stores?

Fri, 06/13/2014 - 18:12 | 4855077 ZerOhead
ZerOhead's picture

They make plush leather sofas and boardroom tables primarily....

Sat, 06/14/2014 - 06:37 | 4856152 doctor10
doctor10's picture

These clowns have yet to figure out that ObamaCare has sucked all the country's discretionary income into insurance companies to backstop hundreds of trillions of world wide dervative positions?!!

Or maybe they have-and they're paid to pretend otherwise.

Fri, 06/13/2014 - 17:41 | 4854994 johnconnor
johnconnor's picture

Damn weather!

Fri, 06/13/2014 - 17:44 | 4855006 kowalli
kowalli's picture

Damn hot summer

Fri, 06/13/2014 - 17:45 | 4854997 Yen Cross
Yen Cross's picture

  lulz

  Excessive 'solar flares', inhibiting the Squids ability to feed....

Fri, 06/13/2014 - 17:48 | 4855018 migra
migra's picture

It was the hang over from the first quater weather...

Fri, 06/13/2014 - 18:02 | 4855050 Bemused Observer
Bemused Observer's picture

Less robust than expected, huh? Expected by who?
The only cretins who expect our economy to grow at 4% in the second quarter are the ones making these predictions. So of course they're wrong...

Fri, 06/13/2014 - 18:18 | 4855088 nmewn
nmewn's picture

Solar Flares! ;-)

Fri, 06/13/2014 - 18:38 | 4855149 buzzsaw99
buzzsaw99's picture

BONUS TIME!

Fri, 06/13/2014 - 18:42 | 4855159 spekulatn
spekulatn's picture

Those CEOs better get back in line or else!!

 

http://www.youtube.com/watch?v=gyXhysmMNhE

 

Fri, 06/13/2014 - 19:26 | 4855274 orangegeek
orangegeek's picture

What parts of depression and deflation needs to be explained again??

 

Fri, 06/13/2014 - 19:34 | 4855292 Roger Shermanator
Roger Shermanator's picture

The dismal economy can easily be explained by the weather, the war in Ukraine, the war in Iraq, solar flares.  Yes, it is the increase in solar activity that nobody could have foreseen that is the reason for the weak economy.  Nothing to see here folks, growth is right around the corner, continue to buy stawks!

Sat, 06/14/2014 - 08:09 | 4856223 AdvancingTime
AdvancingTime's picture

Modern Monetary Theory often referred to as MMT to its many believers removes much of the risk ahead and guarantees that we will always be able to muddle forward. MMT also known as neochartalism is a economic theory that details the procedures and consequences of using government-issued tokens and our current units of fiat money.  Newly acquired tools like derivatives and currency swaps  allow us to print and  manipulate away problems.

While reading an article about the growth of debt in China's non-financial sector I was forced to reflect on how debt is effected by the interest rates. In Europe the ECB had to step in to halt the economic collapse of Spain, Italy and several other countries that were on the brink. What you pay in interest on debt does matter accept in the manipulated land of MMT. Have we been lulled into complacency by the extraordinary actions taken by central banks and governments over the last six years? This is a key question we must face. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/01/have-we-been-lulled-into-complace...

 

 

Fri, 06/13/2014 - 20:17 | 4855398 williambanzai7
williambanzai7's picture

Hippy Dippy Weatherman says scattered morons followed by increasing fraud and monetary easing over the weekend.

Fri, 06/13/2014 - 22:12 | 4855690 The Most Intere...
The Most Interesting Frog in the World's picture

All the options been cashed out... Buy backs peaking.... Everything be dropping like a rock within 3 months.... Eventually, time for more options... That'll be the bottom...

Sat, 06/14/2014 - 02:22 | 4856010 BeetleBailey
BeetleBailey's picture

Brown-Forman [BF/B] Earnings Call 6/4/14: “Looking at economic and industry trends through a geographic lens, the U.S. continued to experience healthy growth, notwithstanding the slow start to the calendar year. The developed markets outside the U.S. showed signs of improvement, driven largely by better conditions and larger developed markets of Europe.”

MOAR DRINKING.....MEANS DEPRESSION.....and a shitload of other signals...

bOoZe....has also gone up in price... <read..INFLATION JANET YOU PIG>

DOESN'T MATTER...PEOPLE NEED "MEDICATION"

This one entry ALONE says we're fucked.

Sat, 06/14/2014 - 07:30 | 4856191 Not Goldman Sachs
Not Goldman Sachs's picture

Tornado season

Sat, 06/14/2014 - 07:33 | 4856194 Not Goldman Sachs
Not Goldman Sachs's picture

Q3 will be hurricane season

Sat, 06/14/2014 - 08:06 | 4856219 AdvancingTime
AdvancingTime's picture

The economic recovery that the media and talking heads have been bantering around does not exist and is just a myth. A manipulated stock market distorted by recent economic policy hides and mask the real truth, in many ways it is ground zero in the war to convince us all is well.

The American people and Main Street will tell you they are far from convinced that it is smooth sailing ahead. Huge weakness in the economy has been shown by numbers that barely get by even after record amounts of stimulus. Fact is if QE or the massive government deficit spending that props up our economy is removed it will fold like a cheap umbrella.

Recent changes in how the GDP is figured , which boosted growth thus reducing the debt to growth ratio, and attempts to spin poor numbers regarding employment have been met with skepticism. More on this subject in the article below.

http://brucewilds.blogspot.com/2013/10/myth-of-economic-recovery.html

 

Sat, 06/14/2014 - 08:06 | 4856221 yogibear
yogibear's picture

Greater and greater amounts of QE needed. 

Fed's Medicine Will Become Poison, Spark Inflation

- Robert Wiedemer

Sat, 06/14/2014 - 08:28 | 4856233 Last of the Mid...
Last of the Middle Class's picture

Not to worry, the mass of humanity accumulating on our southern boder will need food, clothing and medical care. Treatment for TB, STD's, whooping cough, and lots of other fun diseases they haven't been vaccinated against. Not to mention there will be gang menbers involved and undoubtedly some children will be brutalized in the most imaginable ways. God I love it when a group of politicians abuse a group of minors for political gain. The timing of this stinks and I don't believe this wasn't fully manipulated by our lovely government in some way. Intresting to see how it plays out and who will lie their ass off to defend themselves and their political future.

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