Thursday, March 29, 2007

SubPrime Shakeout Hitting Retail Sales

From Bloomberg:

Atlanta-based Home Depot, the world's largest home- improvement retailer, said last month it expects its first annual profit drop since at least 1990 this year, citing the housing market. The company said profit will decrease this year to as little as $2.55 a share from $2.79, or $5.76 billion, last year.


Wal-Mart spokesman John Simley declined to comment. The Bentonville, Arkansas-based company will report March sales on April 12. Wal-Mart in 2006 had the smallest same-store sales gain in at least 27 years. Its shares have increased 1 percent this year.


Subprime borrowers' woes also may curb business at casual- dining restaurants targeting low-income consumers, according to a March 19 report by JPMorgan Chase & Co. Applebee's International Inc. has more low-income consumers than its competitors, JPMorgan said.

Same-store sales at Applebee's, a chain with more than 1,940 restaurants, declined in 10 of 12 months through February. Applebee's spokeswomen Carol DiRaimo and Laurie Ellison didn't return messages seeking comment.

Home Depot is a bell weather company for home improvement.

Wal-Mart is a bell weather company for retail.