Kohl's is having a major disconnect with its customers. The company's inventory growth is outpacing sales and I think their problems will continue into the fourth quarter and even the first quarter next year.
More Quotes from Bill Dreher:
We believe our competitors have shown irrational exuberance with Christmas forecasts, ... We believe the average consumer is worried about higher gasoline prices, jobs and doesn't believe he will benefit from the stock market. With this climate, if you're just a 'me-too' retailer, you'll be in a world of hurt. The department stores will suffer but the discounters Wal-Mart and Target will do well.Bill Dreher
All the department stores we talked to admit quite clearly it's an unprecedented environment, and they have no direct comparison in being able to plan. It makes their job very, very difficult.
Bill Dreher
The tire business did break even on a cash basis but not on a full-loaded cost basis, or the total costs incurred to run that business.
Bill Dreher
They're telling us to pull our number down by 4 cents (per share).
Bill Dreher
The news we got today was incrementally negative, even for the best operators out there. And clearly this does not bode well for a strong holiday season.
Bill Dreher
Department stores are already focusing on rejecting shipments from vendors that they ordered. They are also looking to promote inventory they already have in hand. As we get through the season, department stores are going to be brutal in throwing merchandise back to vendors.
Bill Dreher
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