Just as we were getting a bit euphoric about recent results, Deckers Outdoor and Crocs gave us a reality check last week. Turns out while investors may be quick to forget, retailers are still holding a grudge. Both companies suggested the channel fears winter is a thing of the past. As a result, orders for next Fall/Winter are under pressure. Not only is there leftover product from last year, but there is also caution about taking a stance on wintery wears this year. Deckers cited the weather no less than 30 times on their conference call.
And let’s not leave out a disappointing announcement from Big Lots . First-quarter same-store sales will miss expectations. And that is even with a lift from the weather bump in lawn and garden.
While retailers are adjusting to the fickleness of Mother Nature, the tighter inventories may actually be good news in the long run. Tight inventories going into any season create scarcity of product and result in limited markdowns. That was pretty much the theme post-recession as some retailers reported they did not take big enough bets on products. Fear can actually be a healthy thing for profitability.
If recent weather gyrations don’t give us enough concern, don’t forget Europe. The U.K. is now officially in recession and Southern Europe speaks for itself.Page 2 of 4 | Prev Page | Next Page