Companies are raising guidance, but retail concerns persist

There are lots of earnings again today, with several companies raising guidance and continuing warnings in retail land.

Sherwin Williams reported a modest beat on the bottom line, and turned in revenues that were roughly in line with expectations. The remodeling business continues to hum along, and the paint stores group—which accounts for 60 percent of sales—saw revenues increase 20 percent. The company raised full-year 2014 guidance modestly.

Parker Hannifin is another classic multi-industry company whose businesses include fluid power systems, aerospace components, refrigeration and air-conditioning components. With about 40 percent of sales outside the U.S., the company beat and raised the low end of its full-year guidance. That's notable because the current quarter is the first of its fiscal year.

Truck engine maker Cummins reported earnings above expectations, with revenue also beating analyst forecasts. Stronger demand in North America, Europe and China helped offset weakness in the Brazilian market. The company is returning 50 percent of its operating cash flow to shareholders through dividends and share repurchase programs.

Elsewhere on the earnings front, there's a problem at the mall, and Kohl's is symptomatic. The retailer's poor guidance and third-quarter same-store sales' 1.4 percent dip is certainly a disappointment, but maybe not a complete surprise.

I hate blaming weather, but it was 80 degrees in Chicago yesterday, and it was in the 70s in Philadelphia over the weekend. It's going to be 70 in New York City today. There is no doubt that warmer weather in October impacts outerwear and footwear sales. One analyst noted that for every 1 degree change in temperature, apparel sales move 2 to 5 percent. JC Penney lowered guidance earlier in the month.

Still, let's not blame it all on the weather. Consumers seem to be genuinely changing their spending habits. Malls are not as crowded. Apparel is not on the minds of Millennials. It's now about being interconnected. Go to a mall, and what stores are most crowded? The AT&T store, the Apple store, the Verizon store.

The lulls are becoming more pronounced. Once the back-to-school season ended, consumers went into hibernation, except for those looking to buy cars or iPhones.

Sluggish household formations are not helping, either. But let's not let Kohl's completely off the hook. There are also operational issues. Kohl's needs to keep reinventing itself, but let's face it: The competition at the mall is ugly these days. Kohl's is trying, but it's not really distinguishing itself from the pack. It's blandly competent.

Coach reported earnings above expectations, but the trends are ugly. North American comparable store sales were down 24 percent. Sure, the luxury bag maker says it reduced promotional activity in the outlet channel, but North American department store sales also declined in the mid-teens. Japan sales were down 7 percent. A 10 percent sales bump in China was a modest positive.

Everyone knows what's happening with Coach: Its handbag business has not been inspiring. Maybe that's an understatement. I went shopping with my wife the other day for a handbag for her—don't judge me, please—and she had no interest in Coach. She went straight to Michael Kors. My wife does not sit up nights reading Women's Wear Daily, but she did believe that Michael Kors was a hipper look than Coach. How is it that Coach lost the loyalty of its prime target audience?

In the land of building and remodeling, Whirlpool missed estimates but left its full-year guidance unchanged. North American revenues were up about 6 percent. Latin America, where Whirlpool generates about 25 percent of its sales, was up fractionally and looks sluggish.

Martin Marietta, which makes crushed stone, cement and other aggregates for infrastructure and building, missed fairly big on an earnings-per-share basis, reporting $1.45 versus expectations of $1.72. But it will do well if infrastructure spending ever takes off, as it has in Texas and Colorado. The company singled out Texas for its numerous highway projects, which have "provided for continued stability in public-sector construction activity."

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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