What Consumer-Facing CEOs Think: "It's Like Being At War"

U.S. companies are taking a margin hit as they continue to cut prices amid intense competition, according to Bloomberg Briefs' Richard Yamarone. In this disinflationary environment, Yamarone notes that consumer-related businesses are raising red flags on the struggling household sector, especially those at the lower end of the income spectrum. Here are 8 CEOs comments to clarify the 'real' situation (as consumer confidence somehow hits 7 year highs)...

Hooker Furniture [HOFT] Earnings Call 9/10/14: “We’ve seen a slowdown in orders during the late spring, early summer and that demand was not as robust as we would have hoped given our strong furniture market in April. That trend continued throughout most of the summer, which was characterized by fairly sluggish retail conditions.”

Restoration Hardware [RH] Earnings Call 9/10/14: “As of late, there have been multiple questions, comments and discussions in the press and among the investment community about the continued caution of the customer, the increased promotional environment, and an apparent overall retail funk in the marketplace. Being in the retail business is like being at war.”

Wet Seal [WTSL] Earnings Call 9/10/14: “The competitive space has been highly promotional for quite a while. We’ve done some modifying to our pricing strategy, got high/low. That’s something that I know with that we’re going to be taking a hard look at as the balancing of the pricing shifts, and what we’re doing promotionally the right mix at this point.”

Del Monte Foods [DLM] Earnings Call 9/9/14: “The tough operating environment for consumer packaged goods companies continues. As the consumer struggles with the slow recovery of purchasing power, promotional pricing is being used to drive traffic at retail.”

Burlington Stores Inc. [BURL] Earnings Call 9/9/14: “We feel that 3 percent to 4 percent in the third quarter is a good number relative to our total performance in the first half of the year. And as far as the fourth quarter go, fundamentally, we feel that we’re operating very, very strongly. We just feel it’s better to be cautious this far out from the fourth quarter. So, we felt that 2 percent to 3 percent was the right number overall. We know it’s going to be a highly promotional quarter as it always has been.”

Pep Boys [PBY] Earnings Call 9/9/14: “It is a competitive environment both within the automotive aftermarket and for consumer spending in general. It has been challenging to attract our target customers at a faster rate than we have lost less profitable low price focused customers.”

Campbell Soup [CPB] Earnings Call 9/8/14: “Our industry is now in a period of profound change and challenge and there has been a meaningful decline in the performance of the packaged foods sector. Forces like the economic environment, the transformation of consumer food preferences with regard to health and wellness and their demand for greater transparency, the powerful social and demographic changes, and the rise of e-commerce are all driving significant changes in consumer behavior with respect to food.”

Bebe Stores [BEBE] Earnings Call 9/4/14: “Our overall 35 outlet locations continued to experience negative traffic during the fiscal fourth quarter in the month of July. The promotional environment continues to be a headwind for us, especially at outlet locations.”

J Crew Group Inc. [JCG] Earnings Call 9/4/14:The environment continues to be challenging. Traffic continues to be a headwind. We’re not immune to that factor. I think connected to that is the promotional environment, which remains in a pronounced, or a heightened situation. So those things are headwinds to our business.”


Source: Bloomberg Briefs