Fire And Ice: Is Warm Weather Cooling Retailers?
"Squawk Box" kicked off a new series this morning--Fire and Ice--a look at how the unusually warm weather is helping and hurting areas of the U.S. economy. The focus today is on retail. When the weather's too warm--many people don't shop for cold weather items--as some holiday season retailers found out last month. December in the U.S. was one of the warmest on record.
To talk about the weather (as most everyone does) but focusing on its affect with retailers was Lauren Cook Levitan--senior retail analyst at Cowen & Company. Cook says companies like Gap , Ann Taylor and Talbots will suffer most from the warmer temperatures. It all comes down to inventories says Levitan. She says companies that didn't sell products in December will be struggling to sell them in January. She says those firms are already cutting prices--and that will affect their product margins.
Levitan says that in the case of Gap--the projected sale of the company cannot be placed on slow sales in December. She said the company had a bad year overall. As for trying to get "ahead" of weather predictions--Levitan says the good companies try out fashions to see what sells before the winter months approach. And Levitan says that for earnings season (which begins today) expect a lot of companies to blame the warmer weather for poorer earnings than expected.