Market Watch: Gloom in the Aisles (ugly retail picture)

[marmar]

Retailers brace for an ugly September: analysts
Worse economic outlook may lead to profit cuts, disappointing holiday

By Andria Cheng, MarketWatch


NEW YORK (MarketWatch) -- Hurt by a global financial crisis that made already money-pinched shoppers further reluctant to spend, U.S. retailers are expected to report disappointing September sales, foreboding a tough time ahead for their biggest selling period: the holidays.

Many retailers likely will lower their profit and sales forecasts when they report September sales results Wednesday and Thursday, analysts said.

Analysts from Goldman Sachs to BMO Capital Markets lowered their profit forecasts for the second half and some heading into 2009 on a wide swath of retailers from Costco Wholesale Corp. and Macy's Inc. and Bebe Stores Inc.. Apparel retailers and department stores, which are expected to have another downbeat sales month in September as consumers curtailed discretionary purchases, will be among the most vulnerable with their ability to meet profit targets, analysts said.

Faced with higher gasoline prices and food costs and declining housing and credit markets, retailers already had to contend with a consumer increasingly focused just on necessities spending while paring back on discretionary purchases. Last month's barrage of financial-sector woes, coupled with increasing job losses and wild swings in the stock market, only further hurt consumer sentiment and confidence, making more of them even less willing to spend, analysts said.

"As the financial crisis intensified, consumers were paralyzed and retail spending in September seemed to suffer a severe setback," said Goldman Sachs analyst Adrianne Shapira, who lowered her 2008 profit estimates on 12 of the 23 companies she covers by an average of 3%. "The only thing we see in this environment that we can depend on is continued volatility."

That scenario may well continue into the holiday season as retailers are expected to start their holiday promotions early to bolster declining traffic. Wal-Mart Stores Inc. last week said it will cut prices on some of the most popular toys and speed up the opening of Christmas shops in its stores nationwide to jump start holiday sales. Rival Target Corp. matched with its own price cuts soon after.

Dismal holiday outlook

Retailers are on tap to have their worst holiday season since 2002, according to National Retail Federation. Some consulting firms' forecasts are even worse, with the holiday season expected to be the worst in 17 years. .......(more)

The complete piece is at: http://www.marketwatch.com/news/story/retailers-brace-ugly-september-holiday/story.aspx?guid=%7B0E0D391E%2DA633%2D423C%2DBFD6%2DFD09C55DA827%7D

[Warpy]

1. If you need an ego boost

go into a mall store and buy something, even a small something like some underwear.

I guarantee you they will kiss your feet.