US consumers reject cars, sofas and cruises, results show

US consumers reject cars, sofas and cruises, results show

U.S. consumers are showing frailty ahead of peak business earnings season next month as some struggle to pay bills and others slow purchases of cars, sneakers and household items, findings show. of the week.

Data released on Friday showed consumer spending in the United States rose more than expected in August, but aggressive interest rate hikes by the Federal Reserve as it battles stubbornly high inflation are dampening demand.

Nike, maker of Air Jordan and Converse sneakers, saw its shares fall to a two-and-a-half-year low on Friday, a day after the company said it needed deeper discounts to eliminate a buildup of inventory.

FILE PHOTO: Brandon Parrum, General Manager of the CarMax store in Des Moines, shows off one of many vehicles customers can arrange to purchase online and pick up at the store using ‘contactless’ curbside pickup, a service that the American used car retailer l

CARMAX WARNS CONSUMERS WHO HAVE AFFORDABILITY DIFFICULTIES

“We are seeing evidence of a slowdown in spending across much of the consumer space, with the combination of inflation and rising interest rates putting pressure on household budgets,” Garrett Nelson said. , vice president and principal equity analyst at CFRA Research.

Teleprinter Security Last To change To change %
NKE NIKE INC. 83.21 -12.24 -12.82%

Big-ticket items like furniture and cars that are typically financed have been hit particularly hard, he said.

Rent-A-Center Inc, a retailer that rents TVs, sofas and appliances to low-income customers, cut its third-quarter profit forecast on Thursday, citing a weakening economy.

Nike logo on store window

SAN FRANCISCO, CALIFORNIA – MARCH 21: The Nike logo is displayed on a window of a Nike store on March 21, 2019 in San Francisco, California. (Photo by Justin Sullivan/Getty Images) ((Photo by Justin Sullivan/Getty Images)/Getty Images)

“External economic conditions have continued to deteriorate over the past several months,” Rent-A-Center chief executive Mitch Fadel said in a statement. “It affected both retail traffic and customer payment behavior,” he said.

Used-car retailer CarMax Inc said Thursday that rising interest rates and inflation were starting to weigh on demand for vehicles, a warning that spooked investors in the broader auto sector.

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RCII RENT-A-CENTER INC. 17.51 -4.82 -21.59%
KMX CARMAX INC. 65.99 +0.79 +1.21%

“Obviously consumers have to make decisions…I just think they’re prioritizing their spending a little differently,” chief executive William Nash told analysts.

On Thursday, home goods retailer Bed Bath & Beyond Inc said its net sales fell 28% as it cut inventory sharply to clear its shelves of unsold inventory.

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BBBY BED BATH & BEYOND INC. 6.09 -0.10 -1.62%

“We’re in a situation right now where a lot of businesses are dealing with inventory issues and at the same time inflation is impacting consumer spending,” Morningstar analyst David Swartz said.

Caution is even setting in on travel spending, a hot sector that has benefited from the easing of COVID restrictions.

Carnival Ecstasy cruise ship

Carnival Ecstasy cruise ship, Lido deck, swimming pool. ((Photo by: Jeffrey Greenberg/Education Images/Universal Images Group via Getty Images)/Getty Images)

CRUISE STOCKS DROP AS CARNIVAL MISSES WALL STREET PROFIT EXPECTATIONS, WARNS OF Q4 LOSS

Cruise operator Carnival Corp saw its shares tumble more than 20% on Friday after reporting third-quarter results well below analysts’ estimates.

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CCA CARNIVAL CORP. 7.03 -2.14 -23.38%

Carnival has sharply reduced and intensified advertisements to attract passengers after a long period of pandemic. It also has a higher exposure to the mass market category which has been hit harder by inflation.

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All of the weak earnings and warnings seen this week have left investors cautious heading into October, when most companies report earnings, CFRA’s Nelson said.

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