Morningstar is reporting PetSmart Warns on 3Q.
After raising its forecast just a couple of months ago, PetSmart (PETM) issued a sales and profit warning for its third quarter and full fiscal year. Citing an uncertain economic environment, recent consumer weakness, and warmer-than-usual weather (which has damped sales in key cold-weather categories), the company expects its comparable-store sales growth to be below its original low to mid-single-digit forecast for the third quarter.
Inquiring minds might be asking how warm weather has affected pet sales. I am pleased to provide Email answers from Darth, Bowser, and Princess.
In a touching Email, Bowser indicated that although he had his heart set on a complete BatMan outfit, he lamented… “It ‘s just too hot to be wearing black. Besides lower prices may be around the corner. I’m holding out for better sales and cooler weather”
Princess says “Being the princess that I am, I clearly deserve the best. And the color of the Leia Outfit is perfect. However, this hot weather has me singing the blues. I am holding off till I feel more like partying”.
Darth, pinged me with this comment. “Lord Vader knows I need a new outfit. But I not spending any money to take Princess to the ball if all she is going to do is sit around singing Blue Christmas with Bowser.
If Emails from Bowser, Princess, and Darth are any indication of holiday sales by pets, dogs are definitely cutting back on discretionary purchases. But dogs are not the only ones cutting back on discretionary spending. Humans are cutting back on purchases as well. That is the sign from shipping docks as Cargo Decline Portends Consumer Weakness.
As noted previously, Professor Depew was first to break the story on how Heat Cools Retail Sales. Apologies are now offered because neither of us had the foresight to predict how hot weather would affect dog purchases of Batman, Princess Leia, and Darth Vader outfits.
Blue Christmas For Truckers
If fewer packages are being shipped for humans and dogs alike, then inquiring minds might expect fewer crates to be trucked from the docks to retail stores. With that in mind, please consider the Fortune Magazine interview with the CEO of YRC Worldwide: Trucking Giant Sees Blue Christmas.
Fortune: How is the holiday season shaping up?
Bill Zollars: We’ve got a window now of about ten weeks or so where we should really see a big increase in shipment volumes as we get ready for Christmas. We have not seen that, and that’s a concern. Last year’s inventory buildup for Christmas was lower than historical standards, and the season ended up okay – not terrible. This year you have some easy comparisons, so you would expect to see more of a preholiday inventory buildup, but we have not seen that. Maybe it’s coming later. Maybe it’s not coming.
Fortune: Getting back to the economy, could things get worse before they get better?
Bill Zollars: We have not felt the bottom yet. I’m still a bit nervous. Right now, if things continue to deteriorate, I’m worried we may head into a recession. [I feel that] there is a one-in-three chance of a recession. We are prepared for the worst and hoping for the best.
YRC Worldwide (YRCW) says “We have not felt the bottom yet.” That being the case, other trucking companies such as J.B. Hunt (JBHT), Con-Way (CNW), Knight Transportation (KNX), and Landstar (LSTR) are all likely to be pressured in a sector selloff.
What’s amazing, however, is how everyone is worried about a recession. The real worry should be we don’t have one. The longer people (and dogs) go on spending money they do not have for things they do not need, the worse the recession will be when we do have one.
Mike Shedlock / Mish/