Despite reports, the retail sky is not falling

In our ongoing effort to get past the “weeping and gnashing of teeth” aspect of so much economic reporting, we bring you this month’s overblown financial “forecast.”

On Friday, the Associated Press reported that several of the nation’s largest retailers cut their earnings forecasts after “lingering summer weather and an uncertain economy kept consumers from shopping last month and left the big merchants with disappointing sales.”

Darn that lingering summer weather.

AP reports that as stores reported September sales figures, the “biggest losers were apparel sellers, including Limited Brands Inc., and Gap Inc.”

Phrases such as “biggest losers” imply that the stores lost money, which, of course, is not the case. They just didn’t make as much money as forecast, and in some cases, not as much as the same time last year.

For example, the article doesn’t say that Limited Brands Inc., reported net sales of $713.2 million for the five weeks ended Oct. 6, 2007, compared to sales of $781.3 million for the five weeks ended Sept. 30, 2006.

The company reported a comparable store sales increase of 2 percent for the 35 weeks ended Oct. 6, 2007. Net sales were $6.213 billion compared to net sales of $5.951 billion last year.

Really, not so dire.

Target, J.C. Penney and Nordstrom also lowered their earnings outlooks. Those merchants may not make as much profit at the end of the year as predicted, or would like, and that’s just business.

The AP tells us that Wal-Mart stores posted a “modest” sales gain that was slightly below analysts’ expectations, but raised its third-quarter profit outlook because of cost-cutting.

The article doesn’t add, apparently because it doesn’t fit its theory, that Costco saw a 5 percent jump in its fiscal fourth-quarter earnings, driven by a rebound in same-store sales growth, cost cutting and a tighter returns policy for electronics.

Wal-Mart said that its company research shows that “customers remain concerned about their finances, particularly the cost of living.”

Cost-saving memo to Wal-Mart: Stop the research. It’s a fact that customers will always be concerned about their finances, particularly the cost of living.

It’s also a fact that, despite the Associated Press’ claim, nothing less than the apocalypse will ever keep “consumers from shopping.”

This is evidenced by an earlier economic report this month that showed consumers have boosted their borrowing at the fastest pace in three months, increasingly using their credit cards instead of home equity loans as a source of cash. News, by the way, that is always greeted as good, never with gnashing of teeth.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Opinion

toon
Editorial cartoons for Monday, Feb. 10

A sketchy look at the news of the day.… Continue reading

bar graph, pie chart and diagrams isolated on white, 3d illustration
Editorial: Don’t let state’s budget numbers intimidate you

With budget discussions starting soon, a new website explains the basics of state’s budget crisis.

Comment: Trump can go only as far as the courts will allow

Most of Trump’s executive orders are likely to face court challenges, setting the limits of presidential power.

Comment: Civil service needs reform; Trump means only to gut it

It’s too difficult to hire and fire federal workers. A grand bargain is possible, but that’s not what Trump seeks.

Saunders: U.S. Iron Dome isn’t feasible now, but it could be

Trump is correct to order a plan for a system that would protect the nation from missile strikes.

Harrop: Trump has no sense of damage from tariff threats

Even if ultimately averted, a trade war with Canada and Mexico could drive both from U.S. exports.

Curtains act as doors for a handful of classrooms at Glenwood Elementary on Monday, Sept. 9, 2024 in Lake Stevens, Washington. (Olivia Vanni / The Herald)
Editorial: Schools’ building needs point to election reform

Construction funding requests in Arlington and Lake Stevens show need for a change to bond elections.

FILE- In this Nov. 14, 2017, file photo Jaìme Ceja operates a forklift while loading boxes of Red Delicious apples on to a trailer during his shift in an orchard in Tieton, Wash. Cherry and apple growers in Washington state are worried their exports to China will be hurt by a trade war that escalated on Monday when that country raised import duties on a $3 billion list of products. (Shawn Gust/Yakima Herald-Republic via AP, File)
Editorial: Trade war would harm state’s consumers, jobs

Trump’s threat of tariffs to win non-trade concessions complicates talks, says a state trade advocate.

A press operator grabs a Herald newspaper to check over as the papers roll off the press in March 2022 in Everett. (Olivia Vanni / The Herald file photo)
Editorial: Push back news desert with journalism support

A bill in the state Senate would tax big tech to support a hiring fund for local news outlets.

A young man carries water past the destroyed buildings of a neighborhood in the Gaza Strip, Feb. 2, 2025. President Donald Trump’s proposal to “own” the Gaza Strip and transfer its population elsewhere has stirred condemnation and sarcasm, but it addresses a real and serious challenge: the future of Gaza as a secure, peaceful, even prosperous place. (Saher Alghorra/The New York Times)
Comment: ‘Homeland’ means exactly that to Gazans

Palestinians have long resisted resettlement. Trump’s plan to ‘clean out’ Gaza changes nothing.

toon
Editorial cartoons for Sunday, Feb. 9

A sketchy look at the news of the day.… Continue reading

Rent stabilization can keep more from losing homes

Thank you to The Herald Editorial Board for its editorial, regarding rent… Continue reading

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.