Women’s Retailer Chico’s FAS and Home Furnishings Retailer Williams-Sonoma Report Slowing Sales
After the bell on Wednesday women’s retailer Chico’s FAS (NYSE: CHS) warned that August same store sales are showing a decline of about 3% and that it sees dismal same store sales for its third quarter, according to the Wall Street Journal (subscription required). In response the market knocked off 25% of the company’s value, down $6.13 to $17.95, during Thursday’s trading session on heavy volume – 26.5 million of the company’s 177.4 million shares outstanding, almost 15% of the company, traded hands. Another 10.5 million shares traded hands today (Friday) with the stock closing slightly down at $17.80.
Before the open yesterday (Thursday), home furnishings retailer Williams-Sonoma (NYSE: WSM) also cut its full year sales forecast and said softening consumer demand is hurting sales, especially at its Pottery Barn chain, also according to the Wall Street Journal (subscription required). The stock dropped 8.3% or $2.71 to $29.89 on heavy volume yesterday (Thursday) and lost another $1.32 to $28.57 today.
Other apparel and home furnishings retailers such as Nordstrom, Ann Taylor, Urban Outfitters, Bed Bath and Beyond and Pier 1 Imports traded lower on the news.
As I said earlier today and previously you want to get defensive and stay away from companies that depend on discretionary spending from the middle class which is being hurt by high gas prices and especially the slowing housing market