Weakness in the retail sector is continuing into January. We all knew about the weakness in December: after Thanksgiving, traffic deteriorated more than most retailers expected. That in part is because many consumers waited until close to Christmas to finish their shopping.
Retailers responded by initiating deep discounts and extending those promotions for longer periods. Still, the softness is creeping into January.
Consider the following:
1) Lululemon cut its earnings and revenue guidance for the current quarter. CFO John Currie said, "Since the beginning of January, we have seen traffic and sales trends decelerate meaningfully."
2) Express cut its current quarter outlook after seeing a deeper than anticipated drop in customer traffic. Express CEO Michael Weiss said "January traffic to date has been weak and we have remained promotional and expect to maintain this stance throughout the month."
3) PVH reaffirmed its full year earnings outlook but cut its fourth quarter and full year revenue guidance, due to discounting during the holiday season.
This follows on other cuts in earnings guidance last week from Bed Bath & Beyond, Signet Jewelers, Pier One, American Eagle and Family Dollar.
