Gas prices are hitting retailers
The trend will make life more difficult for the companies that aren't making the best business decisions.
If you didn't know any better, you would say that Thursday was the day retail showed its true colors. That's because we discovered that gasoline at $4 does matter.
How else can we explain Vera Bradley's (VRA) sorry projections for its next quarter or the disappointing outlooks for Guess (GES) and Rue 21 (RUE)? How else do we deal with the decline in the stock of Ross Stores (ROST).
First, I would say that as much as the conclusion seems cogent, each of these stocks is very different. Vera Bradley, a controversial equity, has set itself up for difficult comparisons because it has a strategy of quick turns based on fashion, a very dicey game plan.
There are lots of shorts in this accessory name, and the guidance makes it pretty clear that it can't deliver. Why else would it say that the next quarter is looking for 27 cents to 29 cents a share when Wall Street is looking for 32 cents? But it kept the annual guidance, and I question -- as much as I don't like the stock -- exactly how poorly the company is doing.
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Guess? Tough, tough business. They have to guess at what consumers want each quarter, and I think it guessed poorly. Remember, it has a youthful clientele and it's notoriously fickle. Still, $2.50 to $2.65 vs. $3.20 and change says it's way off track.
Gas prices getting too high for you? The following video offers some ways to save on the cost of driving.
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And that brings me to Ross Stores. Ross did the number. Ross gave good guidance. Ross bought back stock cheaply. Ross' game plan is still intact. You've got 7% comps and a revenue number that was superb. Was this chain of off-price apparel goods hurt by gasoline?
No, not at all. I think the market has it wrong. This stock is a buy. Right here. Right now. Forget the other guys. They have problems. Ross doesn't. Profit taking pure and simple. What an opportunity.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.
WOW what a shocking headline.
Gas prices are high and you think it will hurt businesses and shopping? Nah, get out of town.
I mean that isn't rocket science, if gas prices are low the economy will be just fine, keep them up and you can forget about 75% of Americans going out shopping and spending money.
Wow Jim Cramer, it only took you 4 years to figure out that as gas prices keep going up that the 50% of Americans making less than 50K a year and living on a budget, will stop spending money at retailers. When they stop spending money at retailers, the bottom line of those retailers will be affected. Got news for you, as the Gas prices continue to soar, more people will stop spending money. And when that happens, people are going to start losing their jobs because retailers are not going to be able to afford their employees. Guess what is coming soon, yep, Higher unemployment. And as unemployment starts to rise again, more people are going to stop spending money. The government wants to improve the economy, Wall street wants to improve the economy. Figure out a way to get gas prices back down to about $2.00 a gallon, I guarantee the economy will pick back up!!!
Obama told us before he was elected he would like to see gas prices above $5/gallon so people would be forced to buy more efficient cars and POS electric no-rides no one wants. Didn't anyone listen to what he said? The only reason his popularity hasn't totally tanked is because the media is proping him up. He is an example of the power of large groups of stupid people. Anyone who still supports this Prez is an idiot. The Prez cant effect gas prices? BS, of course he could (if he wanted too).
Gas prices will continue to be high as long speculators are allowed to artificially raise them.
Government, for once, needs to intervene and get rid of these speculators.
Both parties are guilty of playing by the oil lobby rules.
All our money going into gas and into commuting.
Before we had money to go out and eat or go and get a few nice things.
Now we pay $4.00 a Gal... This has impacted in our pocket book.
We used to donate money to help the needy and to contribute to our comunity.
Now we have to watch every peny so that we can go to work and back...
We need a President that can help us get lower gas prices becuase all this high prices impact in our economy and retailers.
Canceled a trip to Disney because of gas prices and will do one we scheduled for the summer to the mountians. Have not taken a nice vacation in the past couple of years and when we schedule one, gas prices go UP. Prices go up have to cut back, since it seems everything else must go up each time on things we have to have. (Milk, bread eggs,,,etc.) Furthermore, thankful I do have a job, and this year they were talking of giving us a raise since we have not have one since 2008, but now that gas prices have increased that talk and idea has left and looks like yet another year with no increase in pay while everything esle goes up.
Also, watch the oil companies profits in April, for some reason they will show record profits...and dont be fooled, profits are what is left over after you have paid all your bills.....
The gas prices will drive everything up doesn't any one else see that??? They should not be this high it is stupid when oil per barrel is not that high for the gas prices to be up this high,,,, just the speculators doing another number on us and still making bonuses and record profits for the OPEC boys.... When are we going to get this and stop it, we the people have the power, just for one day do not buy GAS period. It would blow make them take notice especially if we did the snub them....Think about it.
"The retort came after Exxon Mobil, the world's largest publicly traded oil company, said it earned $10.7 billion in the first three months of 2011, up from $6.3 billion in the same period last year."
the prices have NOTHING to do with supply. All about greed ...
The above quote came from CNN money . com ..Just so you know its not me saying it...
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The solid report comes a month after the retailer closed all of its Canadian operations.
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