Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let’s look at five dumb financial events this week that may make your head spin.
1. Not exactly a page-turner
The chapters don’t get any easier for Barnes & Noble, Inc. (NYSE:BKS). The fading bookseller stumbled after posting uninspiring quarterly results and the fizzling out of a partial exit strategy.
Chairman and founder Leonard Riggio revealed that he’s abandoning efforts to take the company’s retail bookstores private. With Barnes & Noble, Inc. (NYSE:BKS)’s once promising Nook business also seeming less and less marketable, with its 23% slide in hardware sales for the period, it seems as if Barnes & Noble will fade into its final chapters on its own.
2. Penney hard-a-way
Things continue to get worse for J.C. Penney Company, Inc. (NYSE:JCP). Once again, the struggling department-store chain posted a wider adjusted deficit than analysts were expecting. Comps plunged 11.9%, and that was after a 21.7% freefall during the same period a year earlier. Put another way, this is a 31% plunge in comps over the past two years.
The chain is still trying to undo the damage done by former CEO Ron Johnson’s poorly received concept makeover. It’s not a shock to see customers wanting items stocked by category instead of by brands and at more compelling price points.
However, Penney has the gall to claim that online sales at jcp.com fell “just” 2.2% during the quarter. A decline is a decline, especially when even many retail laggards are posting positive online sales.
3. Putting the “oh” in IPO
It’s an unspoken rule, but the most important quarter for any IPO is its first report as a public company. Disappoint the market, and it will be hard to regain credibility. Well, Lightinthebox Holding Co Ltd-ADR (NYSE:LITB) became the latest debutante to let the baton drop during the talent portion of the pageant.
The online retailer of wedding gowns, illuminated faucets, and other trinkets saw revenue climb 53% to $72.2 million, but Wall Street was betting on sales of $75.8 million. LightInTheBox could’ve saved itself with rosy guidance, but that didn’t happen. It sees a sequential decline while analysts were modeling a sequential increase.
LightInTheBox is an interesting story, sourcing goods in China that it sells to the rest of the world with free shipping for larger orders. The company is profitable and clearly growing. However, it’s hard to bounce back from a lousy first impression.
4. Kenmore, meet Ken Less
One of the rare silver linings for Sears Holdings Corporation (NASDAQ:SHLD) in recent years — as its Sears stores struggle and its Kmart sibling fares worse — is that shoppers still gravitate to its tools and appliances.
Well, its appliances aren’t selling so well these days. Sears Holdings Corporation (NASDAQ:SHLD) posted a larger loss than Wall Street was expecting this week, with negative comps at both of its flagship chains. That’s not a surprise. The real shock is that Sears was bellyaching about weak appliance sales.