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What The CEOs Are Really Saying In Q2: "The Recovery Remains Fragile"
Despite exuberant Services and Manufacturing PMIs, Bloomberg's index of CEO sentiment remains stagnant near 2014 lows as April's hope for Q2 has faded into 'more of the same' by June. As Bloomberg's Rich Yamarone points out, in reality (in spite of all the hope), the second quarter is drawing to a close and it was a rough one for corporate America, with CEOs citing "slower growth in household income overall", "the recovery remains fragile, especially for customers on a budget", and perhaps most concerning, "whether or not this softness in store traffic is representative of a permanent sea change in customer behavior or a temporary phenomenon is hard to tell at this stage."
CEO Sentiment remains flat...
As can be seen here...
Darden Restaurants [DRI] Earnings Call 6/20/14: “We think about the industry’s maturation. There are a number of things that are driving that. Certainly, slower growth in the boomer population age 50 to 60 and that’s where dining out frequency is the highest, has always been the highest. Slower growth in household income overall; increased competition, not only within full service dining, but also with the emergence of attractive new segments, new dining segments like fast casual and elevated innovation within traditional quick service.”
Sonic Corp. [SONC] Earnings Call 6/23/14: “We did encounter some unexpected commodity cost pressures during the quarter. In particular, lime prices hit a record high during the quarter more than four times their normal price...Beef, cheese and ice cream mix continue to experience significant cost pressures. We have contracted for our ice creams needs at the end of the quarter but continue to pay market prices for cheese in roughly one-half of our ground beef formula, so some uncertainty remains.”
Kroger [KR] Earnings Call 6/19/14: “From an economy and customer shopping behavior, we are seeing strong positive indicators in shopping behavior. Our customers have exhibited less cautious spending behavior, for example. Consistent with the rise in consumer confidence index in May, our own customer research tells us that more customers perceive the economy to be in recovery. While it is obviously welcome news, the recovery remains fragile, especially for customers on a budget.”
Pier 1 Imports [PIR] Earnings Call 6/19/14: “Although our online sales for the quarter were outstanding, overall, the quarter did not unfold as we planned. Store sales and profitability were disappointing, impacted by soft traffic and a higher level of promotional activity than we anticipated. Whether or not this softness in store traffic is representative of a permanent sea change in customer behavior or a temporary phenomenon is hard to tell at this stage.”
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It's hard to tell what the numbers are indicating...
Is the mike off? Get my broker on the phone! Hello? This is CEO of CHOM corp! SELL SELL SELL!
This is not temporary, and it's not a surprise, and it's not by mistake.
I just peed myself.
i walk though stores and LOOK at ALL the 50 60 and 70% off shit and shake my Head. people are BROKE!
Yea that's at the K, Wal, and all other chinese shit nobody needs but has by the truck load marts. The grocery store is quite a different experience now a days. Be prepared to take out a second mortage to go to Safeway, Kroger, et al to get your weekly shopping taken care of. If your trying to stay away from GMO, high fructose, etc, better bring your first born as well.
"Be prepared to take out a second mortage to go to Safeway, Kroger, et al to get your weekly shopping taken care of."
Just sell stocks and buy food. The S&P has tripled in the last 5 years.
Just arrived back from big box Fry's Electronics in Concord, CA. The store feels different to me. Very few customers, no line at the register (and only two clerks manning the registers).
Much empty shelf space, obviously reduced inventory. The weekly sale ad sheet (posted at entrance) has been scaled down. Prices actually rising on most things. And none of the great bargains I've been accustomed to.
Fuck. This is the end of an era. The consumer goods party is OVER.
Kroger, excellent grocery store in Ohio. It was expensive in the early 90's. They had a knack for high cost gourmet food back then. Bet the 2% growth model puts them out of business.
Even these fuckers can't get enough BS together to pump up the balloon.
The winter Black Friday spending ramp-up frenzy will right the ship, right Blondie? He's dead, Jim.
My fellow ZH commenters:
Question:
Prior to this year, have equity markets ever before in all history hit all time highs in a quarter when GDP growth was -1% or less?
Good one..
It's Algoriffic.....
already there in Q1 2014 followed by ATH in Q2... how long until gravity kicks in?
=> and in Q1 1991...
Or riddle me this, SP, Dow and NAZ up 30% in a couple years with approximate avg 2 percent GDP growth? So where is the other 26 percent growth come from?
Or we could go back before that where is't even worse. There was a documented outflow of money yet it went up about the same 30% in a few years.
Stocks have done a 45 degree ramp job for 5 years without more than a handful of 3 digit down days the whole time. Today was a perfect example of the fraud. Majic save 15minutes before bell over and over and over.
All they are doing now is waiting for the right moment for the AXE to make a move as soon as they get enough bait with their level 3 quotes and fry the shorts over and over and over. And the regulators are blind. Its no a casino this is the WILD WILD WEST in a TOWn with a Dead Sheriff.
AHHH and you want me to Buy Apple for 90 bucks a share when the guy selling it to me paid nothing? either through stock options or acess to the zirp money. ahhhhhhhhhhhhhhhahhahahaaaaaaaaaaaaa
And you think that HFT is the biggest reason its a fraud? No that is a distraction to keep you away from the real problem. Kinda like Obama's job. Im watching your left hand MOFOS. no thanks I'm going to look at a few classic cars and real estate.
How many times have you been told to get 100% out and stop trading and buy farmland?
Heck Im wayyyyyy flush on farmland. Have owned some of it for 30 years. I have more than I care to deal with at my age now. I am not really into the landlord thingy but they really limit my choices these days. Im no longer playing in this cesspit I quit in 2010-11 when it was to me, fully valued in relation to my old prehistoric bottom fishing, fundamental value. occassional swing trade crap before it was put into irrelavence. If I managed other peoples money I would just have to return it today, It has to make sense to me to be able to play with any measure of confidence, I majored in accounting in college so Im a balance sheet, income statement,cash flows guy. I can't play crazy.
If you ever took a course in auditing you would see what a joke most of this really is. And, the sad part some of it is perfectly legal. Even that is not enough. By my slightly knowlegable estimation I would guess about %50-60 percent of the edgar filings are cooked. Even without the total irrevence of the whole thing without assets being required to be marked to market which is now allowed, or the latest craze, non-GAPP earnings and off balance sheet accounting? WTF. LOL
I believe they call it stock buy backs. All of your sweat blood and tears is going into corporate CEO stock options and Wall St banksters.
No
Fragile and flammable.
Q1 2014 no?
Fragile my ass. These fuckers know there's no recovery and they're pilfering as much as they can while they can with stock buybacks and off balance sheet shenanigans to keep the bonus money flowing and the shareholders placated.
That is such a cynical point of view.
maniacal laughter, pissing myself, again
Fragile for who? GLOBAL DEPENDENCY or the lack of lemmings spending money in order to fuck over the Federal Reserve purchasing illusion.
Is it door number one, two, or three. I left out the details on door three on purpose.
"Customers on a budget"
That's a good one. Who the fuck isn't on a budget besides the upper 0.01%?
Bathhouse Barry and Wookie. This is mostly fueled by Brussels Marxist agenda.
A big shift is occurring in what consumers are buying. Recently we are witnessing a shift from general consumer goods to more purchases of autos and healthcare. The first quarter GDP just came out down showing a huge drop yet these two sectors have been outperforming the economy.
If indeed online and auto sales are roaring up double digits at the same time healthcare spending has increased 4.2% it is only fair to assume small business and someone else is getting their ass kicked. Interestingly, this is all occurring as the government continues to pour out billions of dollars each month in student loans, many of these loans will never be repaid. This can be viewed as more proof we are on the wrong path, more on this subject in the article below.
http://brucewilds.blogspot.com/2014/05/consumption-of-autos-healthcare-a...
Health care is obvious. I think a lot of the autos (the ones not being "channel stuffed") are enging up in iraq, afganistan, dhs, etc.
"Customers on a budget" is the Kroeger guy's euphemism for "Customers using SNAP cards."
I think Kroeger is losing high-volume low-margin "fud" sales to Wal-Mart, with their wider selection of store brand fud products (and by-products) and larger fleet of mobility scooters.
Why this continuous blending of the Trash Class economy and the Elysium Class economy? Of course the bottom 70% or so is doing badly, they've been ignored for generations now; who cares about them. They've got all the debt they can handle, plenty of (near) food, entertainment and bling. What the hell else could they want or need? The Elysium Class and the Elysium Support Class is where the growth and prosperity will come from, let's concentrate on what matters.
Ignore the losers at the bottom, it's the American way. Survival of the fittest, bitchezzz!!!
Ignore the losers at the bottom. Let's cut off EBT, and other dangerous free shit programs. Don't fucking try to make yourself upper crust. You're stealing from the taxpayers under QE and ZIRP. Calling you a white collar Nigger is no different in your subsidized Federal Reserve free money scheme.
Do you need a refilled EBT card to buy more stocks? Stupid fucks never learn. You are the same product as a lower human from the bottom.
/rant off
I can't wait to see what the "tea leaf reading" banksters say in 2 weeks, when Q-2 earnings start.
• Top line revenue was non-GAAP adjusted for buybacks and "one time" writedowns. We expect Q-3 revenue to accelerate into the holiday buying season if it get's really seasonably cold. (tools)
'Corporate America' - burger joints and Chicom outlet stores.
Come to think of it that is corporate Merika. Just add the NSA, the latest crop of Pets.com and Wall Street 3 card Monty - AND THAT IS THE eCONomy.
Exporting death does seem to be on the rise.
The retribution from the rest of the world, isn't going to be pretty.
Saying it was the govt. not us,will work as well as 'orders are orders' did at
Nuremberg.I can see why they went along with it now.
Clogs to clogs in three lifetimes.
Don't forget the prison industrial complex.
Many of the numbers and budget projections of the government have been based on far better employment numbers then we are currently facing or will be facing if this continues. The long-term implication of poor job creation will drastically impact in a negative way both the wealth and future of our children and America.
Poor job creation will mean some people never work or go decades without a job. The alternative to working and producing is to use up your savings or be sustained by the government, family, or friends. The longer someone is out of the workforce the harder the adjustment to reentering becomes, they call it work for a reason, and one of those reasons is that often it means doing unpleasant things. More on the implications of unemployment in the article below.
http://brucewilds.blogspot.com/2013/09/implications-of-poor-job-creation...