Macy's m officials announced quarterly earnings Wednesday and, along with Best Buy, bby made dire sales predictions for the coming months following a worse-than-expected October.
Macy's officials announced quarterly earnings Wednesday and, along with Best Buy, made dire sales predictions for the coming months following a worse-than-expected October.
"We are increasingly concerned that we won't see the improvement that we had anticipated as recently as a month ago," said Macy's CFO Karen Hoguet in an analysts conference call.
Macy's earnings were better than analysts expected, even if hardly good news. Macy's, which also owns the more upscale Bloomingdale's chain, had a loss of $44 million, or 10 cents a share, for the third quarter, compared with profit of $33 million, or 8 cents a share, a year earlier. Same-store sales were down 6% for the quarter.
Best Buy, meanwhile, slashed its fiscal 2009 earnings outlook and now says its earnings per share will likely be between $2.30 and $2.90 for the fiscal year ending in February, down from its previous estimate of $3.25 to $3.40 a share.
"Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen," said Best Buy CEO Brad Anderson.
Despite Circuit City's cc announcement Monday that it's seeking Chapter 11 bankruptcy protection and Best Buy's grim forecast, the consumer electronics outlook is actually a bit rosier than for many other discretionary types of purchases.
The Consumer Electronics Association predicts 3.5% growth in consumer electronics shipments this holiday season, which tops the National Retail Federation's (NRF) projected 2.2% increase in holiday sales.
Despite the overall gloom, there's a sliver of a silver lining in the downturn: Retailers, who were often tightening return policies in recent years, are starting to soften them, the NRF says in a report out Thursday. And Sears shld announced Wednesday that it is bringing back layaway starting this Sunday after seeing how successful it has been since being promoted more heavily at its Kmart stores last month.
Although retail returns are on the increase as the economy weakens, the NRF says retailers are getting better at combating fraudulent returns so can be more lenient. More than half of 82 retailers surveyed by the NRF say their holiday return policies will be more lenient than the policy for the rest of the year, up from 35% who said so in 2007.
The number of retailers who said their holiday return policy will loosen compared with last holiday season will triple, from 3.4% of retailers to 11.0%. Changes may include extending the deadline for returns and being more open to returns without a receipt.