Reuters is reporting Target Warns on September Sales.
Discount retailer Target Corp. (TGT) warned on Monday that its September sales at stores open at least a year would be well below its prior forecast due to weak sales in Florida and the U.S. Northeast.
On a recorded message, Target said it expects same-store sales to rise between 1.5 percent and 2.5 percent for the five weeks ending Oct. 6.Earlier this month, the No. 2 U.S. discount retailer behind Wal-Mart Stores Inc. (WMT), forecast September same-store sales to rise 4 percent to 6 percent.
There must be one hell of a recession going on in Florida if that caused a national forecast change from 6% to 2.5% on the high end forecast. Perhaps the U.S. Northeast is in a recession too. But Don’t Worry All Recessions Are Local.
Meanwhile Lowe’s warns profit could trail forecast.
Retailer Lowe’s Cos Inc (LOW) warned on Monday that full-year profit could trail its prior forecast, saying dry conditions in some parts of the United States were hurting sales.
Lowe’s, which is holding its analyst meeting on Tuesday, said “current sales are trending below” expectations as drought conditions in the mid-Atlantic, Southeastern and Western parts of the United States hurt sales of outdoor products such as mowers and patio furniture.
“Lowe’s sales trends have reversed the apparent improvement seen” in the second quarter, Sanford Bernstein analyst Colin McGranahan said in a research note.
In August, when it posted second-quarter results, Lowe’s trimmed its full-year profit outlook from a May forecast of $1.99 to $2.03 a share, citing subprime-market concerns. But it also said at that time that sales trends were improving in some regions despite the housing woes.
“Even as we face easier prior-year sales comparisons as we progress through the year, many uncertainties remain, and it seems prudent to further temper our sales and earnings outlook,” Lowe’s Chairman Robert Niblock said in the statement on Monday.
Back on May 21, Robert Niblock Lowe’s CEO was saying Housing market near or at bottom.
The housing market may be at or near bottom. But don’t expect a dramatic turnaround anytime soon. He also said he’s especially worried about three real estate markets: California, Florida and the Northeast.
Lowe’s and Target must have the same state playbook even if one is blaming what the other should view as “good weather”.
MarketWatch is reporting More bad news expected in home sales and reports from KB Home, Lennar.
Standard Pacific Corp. (SPF) said it would offer $100 million in convertible notes, and that its board of directors has eliminated the company’s quarterly cash dividend. The company expects to save about $10 million annually, with the funds to be used to pay down debt.
[Mish comment: Let’s see if I have this straight. SPF is eliminating its dividend to pay down debt by $10 million while at the same time announcing a new $100 million debt offering. Is this new math or just homebuilder math?]
Wall Street analysts see Lennar (LEN) reporting a third-quarter loss of 55 cents a share, on average, according to a survey conducted by Thomson Financial. “The risk is a higher-than-expected level of impairments, potentially coming from joint-venture investments,” wrote Banc of America Securities analyst Daniel Oppenheim in a report to clients.
Meanwhile, KB Home (KBH) is expected to see a third-quarter loss of 67 cents a share, according to consensus estimates. Oppenheim expects orders will worsen to an 18% year-over-year decline due to weakness in August as the company’s “build-to-order model likely faced tough competition from the large inventory of [speculative] homes for sale.”
Mike Shedlock / Mish/