Target Lowers Sales Forecast, Lennar Reports An Ugly Quarter and Existing Home Sales Fall
There’s a lot of news out this morning that has to make you a little uneasy if you’re a bull.
Target (TGT) reduced its same store sales forecast for September from 4-6% to 1.5-2.5% (subscription required), raising questions about the resiliency of consumer spending.
Lennar (LEN), a large homebuilder, reported another ugly quarter (FY 3Q Earnings Release).
Homebuiding revenues were down 44% from the year ago quarter on a 41% decrease in home deliveries (from 12,337 last year to 7,266)and a 6% decrease in the average sales price. Net new orders were down 48% – from 11,056 to 5,804.
Those are really ugly numbers and anybody calling a bottom in housing might want to rethink it.
The National Association of Realtors reported a 12.8% decrease in existing home sales compared to last year (Press Release).
On the positive side, the market is taking it well with stocks flat to slightly down (12:00pm EST).
UPDATE (Tue 9/25, 12:15pm PST): On the subject of homebuilders, I want to add that yesterday Standard Pacific (SPF), a homebuilder concentrated in California and Florida, eliminated its dividend and announced that it will sell $100 million worth of convertible bonds.