A.C. Moore Arts & Crafts (ticker: ACMR) is a specialty retailer of arts and craft supplies: paints, brushes, scrapbooking supplies, stencils, yarn, cake making supplies, felt, glitter, doll making, silk and dried flowers, potpourri, candle making supplies, etc., writes Tony Sagami, owner and founder of Harvest Advisors. Apparently, business isn’t so hot at ACMR. I say that because ACMR warned that instead of making 5 cents of a share of Q3 profits, it now expects to lose 10-12 cents.
Wall Street was expecting $123 million of sales, but ACMR thinks it will be lucky to hit $115 million. Talk about a turnaround for the worse!
What’s the problem?
The third quarter was a disappointment for the Company as customer traffic dropped 6.2% and was below our expectations due to several factors including rising gasoline prices.
People that run a retail business understand that high gas prices are sucking consumer’s wallets dry. It is just the pinstripe crowd on Wall Street that doesn’t get it. That 6.2% drop in customer traffic is simply the end result of some very weak consumer demand.
ACMR, of course, gets it and realizes that things aren’t going to get better any time soon.
Significant uncertainty in the current economic environment and how the consumer will react during the fourth quarter.
That is a not-so-subtle hint that Q4 is going to stink too.
And no, the Wall Street crowd cannot blame Hurricane Katrina because ACMR operates in the eastern U.S. -- not the Gulf Coast.
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