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Monday, November 9, 2009

A.C. Moore sees consumer spending still lagging

Based on the discounting that already seems to be going on at stores, it already looks like another rough holiday shopping season for many retailers.

That’s true even for retailers that want to sell you things so you can make gifts for your kin, such as A.C. Moore Arts & Crafts Inc.

The Berlin, N.J., company last week reported a decline in comparable-store sales of 7.7 percent. Management was disappointed, but noted that one industrywide survey indicated a 9 percent drop in the overall consumption of arts and crafts products.

The company reported a wider net loss of $12.9 million, or 53 cents per share, for its quarter ended Oct. 3. Its stock price fell the most among those of local companies last week, falling 22.8 percent to close at $3.69.

A.C. Moore cited heavy discounting on seasonal merchandise by other retailers, with some markdowns hacking 50 percent off the regular price.

“While our consumer confidence may arguably be slowly improving, it appears certain that discretionary income spending is still lagging behind general household spending,” said Rick Lepley, president and CEO of A.C. Moore, on a conference call with financial analysts.

For the last three years, Lepley has been leading a turnaround of the 134-store chain that competes with Michaels Stores Inc. and Jo-Ann Stores Inc. “We continue to think that we’re in a stronger position to take advantage of increased consumer spending when it occurs,” he said.

But “when” is the key word. Will the consumer spend money this Christmas? Or Valentine’s Day? Anyone want to guess back-to-school?

Earnings

Today: American Water Works, BMP Sunstone, Lannett, Stonemor Partners;

Tomorrow: Astea International, Pep Boys - Manny, Moe & Jack;

Wednesday: Amerigas Partners, UGI;

Thursday: Quigley, SL Industries, Urban Outfitters.

Quotable

We expected a challenging second half. We baked into our plans and budgets, and that’s exactly what we got.

- Cristobal Conde, president and chief executive officer of Wayne-based SunGard Data Systems Inc., on a call with analysts Friday.
Posted by Mike Armstrong @ 2:05 AM  Permalink | File Under: Consumer Products | Post a comment
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About Mike Armstrong
Mike Armstrong, a business editor and writer for nearly two decades, is the Inquirer's business columnist and PhillyInc blog editor. Contact Mike via e-mail or at 215-854-2980
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