brombonz

August Same-Store Sales Roundup

Isn't it about time that people in the financial media stop giving respect to the "estimates" guessing game? It's bad enough when applied to quarterly earnings, but becomes absolutely ridiculous applied to monthly sales reports.

Isn't it obvious that what matters is the change from the comparable period (or the monthly number as part of a pattern of monthly numbers for that company) or how the sales report in itself or as part of a pattern compares to that of peers, not even beginning to consider the relative impact of markdowns on the sales numbers and their implications for earnings, not what analysts estimate, with something like a 15% accuracy record.

It is mindboggling that reviews of analyst ratings (most based on predicted earnings changes) over the last several years have found
that the most rewarding buys are those earmarked "sell" by the analysts, the net best returns come from recommended "holds," and the worst from recommended "buys."

This same skill when applied to same store sales finds that the list above comes close enough to the reported comp to be considered accurate in predicting the number (whatever that number is worth in isolation) for by my reckoning six (JWN, TJX, LTD, BJ, FDO and FRED), or 15%, of the 40 companies for which estimates were made.

I've followed specialty retail, especially apparel, sporting goods and variety, closely for the last nine years, and since whenever this "estimating" disease took hold this kind of whistling-oin-the-wind inaccuracy has been the norm.

I just don't get it.

But this reference to variation from a "consensus" estimate is now a virtually standard reference in the lead of earnings or comp-sales related news stories throughout the financial media.

And it is meaningless in relation to a company's prospects.

To me it seems to be merely a fast shuffle creating more trading commissions and profits for brokers and trading firms.

Jos. A Bank's Marketing Strategy Cheapens Brand

Amen. I've owned JOSB since 2000 and it's one of my largest holdings. There's a jarring dissonance between its "Tiffany" store atmosphere and carnival-hustler marketing approach. Even some store employees I've talked with are embarrassed by it. I can only speculate whether management has considered a more "reality-based" approach.

On the face of it,my best interpretation is that it might be an attempt to seduce a more "downscale" customer into a luxury or semi-luxury environment, where he thinks he's getting a "steal," no matter how neverending the Sale!Sale!Sale! advertising pitch.

But even that interpretation doesn't account for the TV ad placements on venues such as MSNBC talk shows, which are hardly "downscale." (If the ads are on less upscale commercial broadcast TV, I wouldn't know). Why approach a relatively sophisticated viwer wirh a "Hey, Rube" approach?

It's a "puzzlement."

I have to say that CEO Wildrick, in his earlier days at the helm, took a similarly promotional attitude toward the stock, which had me wary for quite a while. Nonetheless he has delivered on the promised store expansion and profit growth, and along with it muted his style. But "carnival" may still be in his bones.