Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who wrote (596)	11/12/2000 3:23:50 PM
From: tradermike_1999	Read Replies (1) of 74559

If the economy is not slowing down then why are the earnings for retailers contracting? nypostonline.com POOR PROFITS BATTER BIG RETAILERS' STOCKS Friday,November 10,2000 By EVELYN NUSSENBAUM -------------------------------------------------------------------------------- Retailing stocks were some of the biggest losers in the markets yesterday, after several big chains announced weak quarterly earnings. Electronics retailer Best Buy lost 39 percent of its value after warning Wall Street that it would not meet expectations for the second half of the year. Best Buy cited stiffer-than-expected competition from discounters such as Wal-Mart as the cause. The stock skidded $20.31 to $32.06. The Gap droppped $1.62 to $24.62, after the struggling retailer of clothing reported a decline of some 41 percent in quarterly earnings. The Gap was forced to slash prices in order to clear out fall styles that did not sell. The same problems plagued Lands' End - and investors lopped $2.18 from the stock to $24.03, after the catalogue retailer reported a whopping 49 percent drop in earnings. And Kmart fell $1.12 to $5.81, a drop of 16 percent. The discounter, in the midst of a restructuring, reported a loss after making a profit the year before. Since consumer spending is the biggest driver of the economy, the retailers' woes are a clear signal that it is slowing. The questions now are how much - and exactly how fast. "This will not be a pretty picture for retailers," observed Bob Wahlberg of Briefing.com. "This is all about earnings decelerating."

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