Bargains As Bait – US-FOREX.US
Retailers know that this year the back-to-school season won’t be enough to get consumers back to shopping. Unemployment remains a focal concern as consumers keep spending limited to necessities – and the occasional bargain. As retailers gear up to report quarterly earnings, the market will be looking to see how stores plan on luring shoppers through check-out aisles. Clearance sales and other buying incentives helped retailers unload high inventories amassed during the recession, which, in addition to aggressive cost-cutting actions, have some companies in a better position ahead of their quarterly report releases.
Macy’s
surprised Wall Street when it forecast second-quarter earnings between 15 and 17 cents a share last week despite July’s same-store sales decline of 10.7%, which was worse than the 9.1% drop expected by analysts. Analysts, who had been expecting a quarterly profit of 5 cents a share, upwardly revised their estimates to 15 cents a share. The higher forecast reflected the store’s fierce cost reduction program that closed 11 stores, eliminated 7,000 jobs, chopped capital spending, scaled back employee retirement funds and hacked its dividend. Even with higher earnings expected, however, analysts voiced caution since consumers are still reticent.”We remain cautious on the near term prospects of these shares as Macy’s works through and implements its new centralized buying structure,” said Credit Suisse analyst Michael Exstein. “We would also note that unlike some competitors, Macy’s sales pace has decelerated in recent months. Some other competitors’ sales have either stabilized or are modestly improving.” When the company reports second-quarter earnings on Wednesday, analysts polled by Thomson Reuters anticipate sales of 5.2 billion. Macy’s stock closed Tuesday’s trading session up by 24 cents, or 1.6%, at 15.47.
On Thursday, Nordstrom
, Kohl’s
, Wal-Mart Stores
and cosmetics company Estee Lauder
release quarterly results.
The Associated Press contributed to this article.