Bill Dreher Retail Quotations

Retailers that are not catering that well to the middle- and upper-income customers are going to have a tough time.

There's very little excuse for anyone posting weak sales right now, ... If that is happening, it because of company specific excuses. The macro environment overall is very strong. The first month of the quarter got a stellar start and that usually put a lock on the rest of the quarter. Retailers should post improved earnings going forward.

Clearly the last 10 days before Christmas were very strong and allowed retailers to achieve their sales plans for the month despite the lack of aggressive promotions we saw in 2002.

We believe this will have a negative impact on February sales for the majority of our retailers as the much colder weather will likely impede store traffic, and sales of spring merchandise sets that are now in stores may be impacted.

People are being much more rational with their expenditures. That's why we're seeing these discount price retailers generating strong customer traffic and solid sales increases. And we expect strong earnings increases from them.

On its own, a comp-store inventory increase of 2-to-5 percent is no big deal. But when you've got comp-store sales declines of closer to 10 percent, you're dealing with a possible 10-point spread, which we believe is going to cause retailers to push the promotional panic button earlier than they would have.

In the game of chicken between retailers and consumers, with one looking to improve profit margins and the other holding out for discounts, it would appear that the consumer blinked. The initial read on the fourth quarter is that profits should come in better than anticipated.

The companies that are seeing strong gross margin improvements are getting it not from improving their merchandising mix, but from improved buying. Retailers like Wal-Mart and Target are lowering their cost of acquiring products. Sears on the other hand, continues to struggle with the turnaround of its department stores and problems with its credit card unit.

Wal-Mart and Target continue to prove that they can operate well in this challenging retail environment and deliver profits despite modest to weak sales results.

Consumers were not in the holiday spirit up until the last week of the holiday season, when there was a mad rush for the store. And the big unknown is the result of that game of chicken, where shoppers waited until the last minute to get the best bargains and retailers held off.

It appears that the greatest factor for our retailers slowdown up until now had been the unseasonably warm weather, and as soon as we got more seasonally appropriate temperatures it unleashed pent up demand.

Even though Wal-Mart is definitely in a better position than most retailers to absorb any shortfalls, others could be in for a very tough period ahead.

Wal-Mart's cautious comments are warranted. Even though its problems are not company-specific, it does bode badly for the profits and sales across the retail chain in the back half of the year.

Wal-Mart's cautious comments are warranted, ... Even though its problems are not company-specific, it does bode badly for the profits and sales across the retail chain in the back half of the year.

I think high-end retail sales will get a boost from this news.