All I Want for Christmas Is For You People to Spend Money, Says Costco CFO
When I interviewed Financial Armageddon's Michael Panzner for Going Concern not that long ago, I took quite a bit away from the experience (and that's not doing it justice). Michael's insight has long been inspirational (if that's what you want to call it) to my own adventures in fringe financial blogging and tracking the crisis as each little bit rots away. But above all else, the one thing I took from our conversation was this: Christmas is going to be a bitch.
That is to say, retail is screwed. And if this winter will be at all like the last, don't expect those vodka-scented mall Santas to be much help. You can't force people at gunpoint to shop, no matter how many cheery ads you put on the teevee. Sorry, bitches.
That being said, go Costco! You're going to need all the help you can get!
Costco Wholesale Corp (COST.O) is hoping that consumers are becoming more comfortable making purchases as the No. 1 U.S. warehouse club operator heads into the year-end holiday shopping season.
"We still are cautious but are keeping our fingers crossed that people are buying a little bit," said Chief Financial Officer Richard Galanti on Wednesday.
He made the comments at the retailer's investor day, which was held in its new store in Manhattan.
Costco's monthly same-store sales fell through much of this year as shoppers shunned purchases of its discretionary merchandise, like jewelry and clothes. Unlike a year ago, when gasoline prices rose to record levels, Costco received no recent sales boost from the price of gas.
But same-store sales returned to positive territory in September and October, marking an improvement from August, when same-store sales fell 2 percent. The retailer has also said it is seeing demand return for products besides food, like sporting goods, clothes and cameras.
Costco also said at the meeting that it plans to ramp up store openings in the next five years. While the majority of those new stores will be opened in the United States, it said it sees potential to expand its store base in Japan, Taiwan, Korea and Australia.
R.J. Hottovy, an analyst with Morningstar, said he was pleased with what he heard at the meeting, and it reinforced his view that Costco has a strong business model.
"In the downward economic cycle that we're in, I think the value proposition that Costco provides, it really sells itself," Hottovy said.
I seem to remember this exact spiel from Costco execs not that long ago... in fact, it may have been this SAME time last year, go figure.
Best of luck to them on that...