Retail is on the ropes heading into its most vital months of the year. The outlook could get worse.
A quick roundup of today's bad news:
- Whole Foods slashed earnings forecasts by about half to 13 to 15 cents a share after an absolutely dismal quarter as the crunchy grocer grapples with its troubled buyout of rival Wild Oats and a tough environment for shoppers. (I liked this line from Barron's: You can get a lot of organic things at Whole Foods Market (WFMI). Growth isn't one of them, however.) Shares are off almost 20 percent today.
- Blue Nile, the popular online jeweler, is expected to have a "muted 'ring season,' " according to Citigroup. Second-quarter revenue from the United States fell 5 percent from a year ago, and margins have been trimmed by the rising cost of gold and platinum. Nile sees 2008 revenue and earnings growth in the mid-single digits, down from an earlier 10 percent growth forecast. Its second-quarter earnings released Tuesday slipped to 20 cents a share from 23 a year ago. It's off more than 4 percent today.
- Back to school looks rough. Via Bloomberg:
"Almost 30 percent of U.S. parents plan to spend less money this year on back-to-school purchases, according to a survey of 1,000 adults by America's Research Group conducted July 8 through 10. Last year, that figure was 16 percent, said Britt Beemer, chairman of the Charleston, South Carolina-based firm. This year, 45 percent of those who planned to cut back said they had less money."