Results Begin to Roll In
February 22, 2010,
This week we'll find out how the fourth quarter played out for a whole host of retailers as quarterly reports are filed by Macy's, Target, Sears/Kmart, Home Depot, TJX and Kohl's.
Their business in home couldn't have been more different. At Walmart U.S., home showed improved profitability thanks in large measure to Walmart's reduction in supplier relationships and inventory. At JCPenney, it was the weakest department in the store. Company executives did not delve into the reasons why.
With a few more top home retailers spilling to analysts in the coming days, one hopes a broader directional trend will emerge for the category.
We'll also get a better sense of how retailers across the board feel about 2010. Wal-Mart and JCPenney were both fairly conservative in their fiscal year projections, with JCPenney citing the economy at home and Wal-Mart pointing to sustained employment problems in many of its markets around the world.
There's probably a bit of sandbagging behind those projections — just as there may have been during the second half, when several retailers low-balled their fourth-quarter projections, only to raise them once the quarter got underway.
Of course, the recovery as it relates to consumers so far ranges from delicate to non-existent, depending upon the region and the industry in which one holds or has lost a job. So prudent forecasting is understandable.
It may amuse (or not) manufacturers to hear that so far this year in their presentations and quarterly conference calls, retailers are pitching the idea that their costs and prices will not rise. Walmart, through its recent sourcing arrangement with Li & Fung, actually says its costs will decline and its retails will do likewise. Target, during its analysts day in Philadelphia earlier this month, shrugged off the question, acknowledging on the one hand that fabric prices have climbed but asserting that fall merchandise will be coming in at a slightly lower cost.
Raw material price increases? What raw material price increases?
And so the big wheel spins.
P.S. To suppliers who will be participating in the New York Home Fashions Market in a couple of weeks, you've got about 10 minutes left to get your new product information and pictures in to us. Don't dally!
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See the September 2017 issue of Home & Textiles Today. In this issue, we look at the Attack of the Killer Third Tier: Monster off-pricers are climbing to the top of the food chain, plus New Products: 40 pages of new products debuting at the New York Home Fashions Market; Home Stores: TJX unveils first U.S. HomeSense store; Clicks to Bricks: Boll & Branch moves from digital to physical retailing; and much more...