Retailers: Warm Weather Yields Cold Sales
CNBC "On-Air Stocks" Editor
Warm weather left apparel retailers with a lot of unsold suits and sweaters in September. Limited, Chico's, Abercrombie, Gap and Limited missed. Men's Wearhouse cut its forecast for third quarter profits, citing "continued softening in traffic trends." American Eagle saw a decrease of 5% in September comparable store sales, citing lower traffic and unseasonably warm weather.
But the biggest surprise was Nordstrom . They saw an increase in sales, but less than expected. The company lowered its guidance for the quarter; down 6% pre-open.
Wal-Mart saw an increase of 1.4% in sales, below the 1.9% expected, but they raised their guidance, reminding everyone that it is still the BOTTOM LINE, not the TOP LINE, that truly matters. Up 4% pre-open.
Meanwhile Virgin Mobile will make the usual big splash at the NYSE, with Sir Richard Branson ringing the bell and and a big display in front of the NYSE. They're giving out T-shirts and emergency phone chargers. Doesn't conceal the fact that it priced at the lower end of the expected range: 27.5 m shares at $15, range was $15-$17. Pali Research noted that "We are primarily concerned about the significant impact that changes in key metrics have on this low margin model."
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