"The American consumer is not fully back and remains cautious," is the oddly real tone of Ken Perkins, president of Retail Metrics, reporting that U.S. retailers’ first-quarter earnings are trailing analysts’ estimates by the widest margin in 13 years amid weak spending by lower-income consumers intensified competition:
- *U.S. RETAILERS’ PROFITS MISSING ESTIMATES BY MOST IN 13 YEARS
- *U.S. RETAILERS MISSING ESTIMATES BY 3.2%, RETAIL METRICS SAYS
While extreme weather is tossed out as the reason for this miss, what is an ugly smoking gun is the expectations the chains are missing had already been significantly lowered. Hope remains strong as "pent-up demand" has analysts projecting a 8.6% surge in profits in Q2... as long as it's not too hot or cold or wet or dry.
As Bloomberg reports,
Chains are missing projections by an average of 3.2 percent, with 87 retailers, or 70 percent 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 percent. Over the long term, chains typically beat by 3 percent, the firm said.
“The American consumer is not fully back and remains cautious,” Ken Perkins, Retail Metrics’ president, wrote in the report.
What’s more, the expectations the chains are missing have been significantly lowered. While analysts now project retailers’ earnings fell an average of 4.1 percent, back in January they had estimated a 13 percent gain.
Most retail segments are showing profit declines, with department stores, teen-apparel chains and home-furnishing stores faring the worst, Retail Metrics said. About 41 percent of retailers have missed estimates, while 45 percent have beat.
But faith remains strong that it will all be ok...
Improved weather, pent-up demand and better employment trends may help the industry in the second quarter, Perkins said. Analysts are projecting an 8.6 percent gain in profit for the current three-month period, he said.
Unforntunately, the winter of 2000 was a relatively mild one - so we wonder what they blamed the miss on then...