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If it wasn’t Bed Bath & Beyond’s troubling warning, it was Ben Bernanke’s inflationary prognostication that contributed to retail selling pressure. According to the Fed chief, “the slowdown in residential construction is now expected to remain a drag on economic growth for longer than expected,” adding remarks that core inflation remains at elevated levels.
And then there was Bed Bath & Beyond…
For Bed Bath & Beyond (BBBY) to issue a warning is astonishingly bad, as the company rarely misses and rarely warns. But warn it did. The company announced last Monday night that Q1 2007 profits would come in between 36 and 38 cents a share, and miss 40-cent expectations. Plus, same store sales are only expected to rise about 1.6% as compared to previous same store forecasts for a three to five percent increase.
The company that has historically trounced the competition is now being trounced by its first shortfall since IPO. And it’s all thanks to troubled housing and higher oil prices, which now raises the questions: Are retail profits and sales headed lower this summer? Are housing problems spilling over to consumer spending? Bullish talking heads don’t think so, but what do they know? They were the same ones that tried calling housing’s bottom several times. And finally, who’s next?
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