Earnings Reports From Four Retailers Show US Consumer Spending Is In Recession

August 28, 2008 at 4:28 pm  ·  Category: Macro Economics, Stocks

Four earnings reports out today from prominent retailers show that US consumer spending is clearly in recession:

Men’s Warehouse (MW) – “You’re gonna like the way you look.  I guarantee it!” – reported a 7.8% decrease in same store sales at the 572 US locations of its flagship store in its 2nd quarter ended August 2, 2008.  EPS was down 28% from the year ago period (72 cents vs. $1.00) (MW Earnings Release).

Tiffany’s (TIF) said that comparable sales at its US stores, excluding the flagship New York store which continues to benefit from non-US visitors, declined 6% in its 2nd quarter ended July 31, 2008.  Sales at the 19 European stores continue to be strong – up 11%, excluding currency effects, on a comparable basis (TIF Earnings Release).

Williams Sonoma (WSM) same store sales were crushed at its 613 Williams Sonoma and Pottery Barn stores – down 11.7% from the year ago period.  As a result, EPS, exluding gains from the sale of a corporate jet, were off 65% from the year ago period (WSM Earnings Release).

Finally, same store sales at Sears Holdings (SHLD) Sears and Kmart stores were down 6.2% from the year ago period (SHLD Earnings Release).

Interestingly, shares of Men’s Warehouse, Tiffany’s and Sear’s were all up significantly on the day as the reports were apaprently not as bad as expected. 

Still, this isn’t good: The US consumer is clearly cutting back in a significant way.

Disclosure: Top Gun has no position in Men’s Warehouse (MW), Tiffanys (TIF), Williams Sonoma (WSM) or Sears Holdings (SHLD) shares.

Posted by Greg Feirman  ·  Trackback URL  ·  Link
 

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