Retailers expecting weaker holiday sales
By Abigail Goldman
Los Angeles Times
Ho, ho, ho is looking like it might be slow, slow, slow.
Levi Strauss & Co. said yesterday that its revenue this year would be worse than expected, partly because slow October sales spooked retailers into buying less for the holidays.
The San Francisco-based apparel maker's announcement that its 2003 sales would be as much as 7 percent below last year was one of several signs yesterday that the Christmas season might not be as merry as many economists had predicted.
Discount giants Wal-Mart Stores Inc. and Target Corp. said fourth-quarter earnings could fall short of Wall Street estimates as retailers face tough competition this Christmas.
Wal-Mart posted a 13 percent increase yesterday in third-quarter earnings but missed expectations for the first time in seven years. The world's biggest retailer said its profit could also miss expectations this quarter.
Wal-Mart's results worried the market, pulling down shares of many retailers, amid indications that low-income consumers have still been spending cautiously. For some industry followers, Wal-Mart's disappointing results took the wind out of rosy expectations mounting for the holiday season for merchants, though the consensus is that it will be still better than last year.
Worries about finding or keeping jobs continue to make shoppers wary of opening their wallets too wide, analysts said.
"Consumers are being extremely cautious spenders," said Kurt Barnard, president of Barnard's Retail Consulting Group. "They buy what they need — people bought food at Wal-Mart" but the world's largest retailer has been having a hard time selling "soft goods" such as apparel, he said.
Making analysts more edgy is that this year's results will be measured against last year's disappointing numbers, when sales barely budged at 0.5 percent, said Michael Niemira, a senior economist for Bank of Tokyo-Mitsubishi.
"That's what's somewhat uncomfortable," he said. Merchants "are not sensing that there is any kind of fundamental improvement."
The Associated Press contributed to this report.
