The government shutdown has removed key algo-dependent headline-making economic data from our daily lives such as incomes, spending and retail sales. However, we have anecdotal signals from trade industry data (pace of dining out has stalled and anyone but the hghest earners are seeing consumer comfort plunge) and from-the-horse's mouth we have CEO comments. Here is what is on the US retailers' mind...
Via Bloomberg's Ric Yamarone,
Chico’s FAS [CHS] Earnings Call 8/28/13:
“Traffic was our issue in quarter two. In a highly promotional and challenging environment, comparable sales result was a negative 2.6 percent on top of a positive 5.6 percent last year and a positive 12.8 percent in 2011.”
William-Sonoma [WSM] Earnings Call 8/28/13:
“The retail environment, it seems to indicate there’s still a lot of uncertainty out there, that the promotional environment has not gone away and that the retail environment in general continues to be choppy, especially with the recent earnings releases and this global unrest, and we just don’t want to get ahead of ourselves.”
Zale Corp [ZLC] Earnings Call 8/28/13:
“Overall, we continue to take a conservative view of market conditions in both the U.S. and in Canada. That being said, we do expect to continue to achieve positive top line growth. We expect store closures will impact our overall revenue growth for the year by about 250 basis points. It represents net closures of approximately 50 to 55 retail locations.”
DSW Inc. [DSW] Earnings Call 8/27/13:
“We did have a traffic decline in Q2, sort of similar to what just about every other retailer in America has reported.”
Guess? [GES] Earnings Call 8/28/13:
“The Korean business continued to be strong as revenue grew in the high single digits in local currency during the quarter. This was offset with the weakness from China, where we are seeing clear evidence of a pullback in consumer spending behavior because of the slowdown in the economy.”
Aeropostale [ARO] Earnings Call 8/22/13:
“Our business trends in the second quarter did not change materially from earlier in the year, which was disappointing given the level of change we registered with the brand. This performance in the third quarter outlook is being influenced by a challenging retail environment, with weak traffic trends and high levels of promotional activity.”
Dollar Tree Inc. [DLTR] Earnings Call 8/22/13:
“In our current economy with customers facing stubbornly high unemployment, unpredictable fuel prices and higher taxes people continue to look to Dollar Tree as a destination for a balanced mix of high value consumer products and a terrific assortment of fun, high value and high margin variety merchandise.”
Hormel Foods [HRL] Earnings Call 8/22/13:
“The weakness for Refrigerated Foods was clearly the most pronounced in the earlier part of the quarter, ending up prompting us to come out with our guidance adjustment that occurred mid-quarter. At that stage, we were seeing some continued weakness in processing margins, but the bigger culprit had been the spike in some of the raw material costs.”
and all of this before the government managed to shutdown the government and furlough hundreds of thousands of workers...