Analysis-deep sound warning for US retail profits discounts

NEW YORK, Dec 6 Reuters) — consumer discounts this holiday season have carousing, but it means thinner profit margins for retailers Wal-Mart Stores Inc., Neiman Marcus and car manufacturer, a red flag for investors who have ridden a sector rally all year round.

This week clothing retailers including Aeropostale Inc ' in the fourth quarter, guess Inc lowered profit forecasts and on Thursday, several big retailers, posted disappointing sales in the United States for November.

"We have an economy which is growing very fast. Prices in most cases come down, "said Jim McNerney, head of the Business Roundtable and Chief Executive of aircraft manufacturer Boeing Co, sharing the Roundtable survey opening on Wednesday.

"Every Member of the Business Roundtable, which represents half the US economy price pressure is confronted," he added.

Discounting is likely to continue as retailers seek to hold onto market share. Shares of retailers, big winners this year begin that look expensive, and some investors position themselves to a decline in profit.

"It is in a sense that the economy is recovering, there is an increase in sales, is still price pressure on retailers, especially the traditional, troubling," said Rick Meckler, President of LibertyView capital management in Jersey City, New Jersey.

Most large retail sectors their margins on earnings before interest and taxes, or EBIT have seen to decline from last year in the last quarter, according to Thomson Reuters StarMine. A group of 11 multiline retailers, including target and Macy's, have seen that this margin drop to 5.2 percent from 6 percent, while the auto companies by 3.6 per cent to 1.5 per cent have fallen.

A remarkable divergence is in stores, includes a series of luxury, clothing name and home improvement companies. Their margin is increased to 9.8 percent from 9.2 percent, partly because of Home Depot, Signet jewelry and O'Reilly automotive.

INVENTORY BUILDING

Great seller of apparel and gift ideas expected to face cost pressure in the entire last quarter. The newest report on the third quarter gross domestic product showed a surprising increase in inventories – specifying a few too optimistic sales lower expectations that through rates are set.

L Brands Inc, that parent of Victoria's secret, reported on Thursday that same store sales fell 5.5 percent, while analysts expected a decline of 1.1 percent. Profit margins had taken a hit due to reinforced offers but would not say how much to say. The company also noted that in the Victoria's secret online store down unsold clothes mark it.

Joel bines, managing director at consulting firm AlixPartners, said that the disorder at some retailers allow clothing suspect that many shops more were easy to sell, ordered, as she can and even luxury boutiques, which usually avoid, holiday discounting, in have gotten over the action for the first time since 2008.

"It will hurt all the edges. It is a "Beggar-thy-neighbour" battle for market share,' "he said."

On Wednesday more than 24 percent express shares fell in afternoon trading, so that the fashion retailer of the top losers on the New York Stock Exchange after it a weaker than expected holiday quarter surrounded by intensive promotions forecast.

Thomson Reuters data for consumer discretionary stocks show estimates of earnings growth for the fourth quarter rose 4.4 percentage points to 9.8 percent since Oct. 1 have fallen. The total saw S & P, its estimates fall 3.1 percentage points to 7.8 percent, but some keep the consumer has way.

"Estimates in this sector, aggressive", Adam Parker, U.S. equity Chief Strategist at Morgan Stanley, said has an "underweight" rating on discretionary within the sector.

The S & P discretionary in the sector of consumer group of stocks has 35.8 percent won this year, which ranks it among the 10 S & P sectors place, asked for only health care shares. But in the last five days discretionary sector 1.1 percent compared with a 0.6 percent decline in the overall S & P 500 has lost.

HEAVY DISCOUNTING

David Strasser at Janney capital markets said he expect stores to deep discounts through the rest of the holiday season offer middle and lower income buyers hesitate, are free to spend.

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AutoNation July new vehicle sales up 17 percent

FORT LAUDERDALE, Florida-AutoNations new vehicle sales rose 17 percent in July from the previous year's period to a supplement sales day in the period.

The country's biggest car dealership chain said Friday that it sold 25.403 new vehicles last month. Sales of domestic vehicles 23 percent rose 19 percent, while premium luxury vehicle sales climbed. Sales of the vehicles rose by 14 percent.

There days 25 sales in July compared to sell 24 days a year ago.

Sales of new vehicles in garages open at least a year by 12 percent to 24.195 vehicles has increased. This figure is an important indicator of a car dealership health, because results of the place recently are opened or closed out.

Last month, AutoNation reported that its earnings rose in the second quarter by 14 percent on strong growth in all business units.

AutoNation Inc., with in Fort Lauderdale, Florida based, is his new August vehicle sales through Sept. 5 reports.

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Demand for trucks, consumer confidence blessing for June U.S. sales

DETROIT (Reuters) - U.S. car dealers such as Don Kerstetter have every reason to be, as the industry will celebrate, as it has 2007 happy these days - facing demand not seen since before a recession, General Motors and Chrysler drove into bankruptcy.

The owner of the classic Chevrolet Sugar Land outside Houston is on pace for another month of the new car sales over 200, due to demand for full-size pickups Texans love.

"The month's been good," he boasted. "It is in the last week or so above all picked." Credit is generally good in our area."

Kerstetter is not alone as the U.S. auto industry, the sales expected to exceed 8 percent rise in June and reach their highest monthly pace since before the recession, the two U.S. automakers, are forced to seek bankruptcy protection in 2009.

In may auto sales rose more than expected, as construction workers and oil bought more pickups to growing demand for drill bits to fulfill their services US, a trend expected automakers continue through the rest of the year.

Most analysts expect sales pace in June between 15.5 million and 15.7 million, the largest number of high end of which would mark since December 2007. The industry sales report is expected to be June supply leading indicator for the health of the US economy on Tuesday.

"We think that housing is a driver, but also domestic energy production and also the general economic health of the States such as Texas, which represents a large pickup truck,", said Barclays analyst Brian Johnson, sales annually in June by 15.6 million vehicles expected.

The demand for large pickup trucks is so strong that this year above 2 million for the first time since 2007 the current tempo contains sales after Doug Scott, marketing manager at Ford Motor Co.'s best-selling F-150 truck.

The US real estate boom and stable gas prices play on traditional strengths of the U.S. automakers in pickups and SUVs. So far in this year is the growth rate for the sale of large trucks with 21 percent, three times faster than the industry.

Pickups are one of the most profitable automakers in Detroit, marketed, although current incentives may undermine the profits of $5,000 or more.

"It's actually quite exciting when you consider where sales could go in a few years, when the cycle remains higher grinding to improve employment level," Jefferies analyst Peter Nesvold said.

Lending standards and low interest rates consumers are easing to buy new cars and light trucks.

Car manufacturers also benefit from lower costs, so they book profits on all of its vehicles, including small cars. Commodity prices, including steel, moved lower than vehicle prices have increased.

Raw material costs index is Star Agee to the lowest level since raw materials at the end of 2010 to produce about one-quarter of the total cost to a vehicle; Price declines, the costs per vehicle from $150 last year and this year so far star Agee analyst Michael Ward about even more said in a research note.

Incentives are now falling, help more automaker profits. Industrial research, the company TrueCar.com estimated they fell another 0.6 per cent to $2.537 per vehicle in June to the lowest level for the month since 2002, except 2011 as a result of the Japanese tsunami and earthquake distorted.

Concerns remain the Central Bank as executives watch exactly, to determine whether his decisions on demand of consumers could put a damper.

"It will be interesting to watch, where consumer confidence is how the market kind of swayed the last week. You talk to eventually higher interest rates, and what this means for buying consumer confidence, "Joe Hinrichs, Ford's head of North and South America, reporters Thursday on the company product development center in Dearborn, Michigan"

Fed Chairman Ben Bernanke surprised markets by saying last week that the Central Bank is expected to reduce that monthly loan buy rate for $85 billion this year and end total mid-2014 if the economy improves, as expected quantitative easing.

Several current economic indicators have painted a picture of an improving US economy, including gains in the industrial economy and real estate prices and sales. Confidence this month hit its highest level for more than five years.

Duane R. paddock, Chief Executive of Paddock Chevrolet located near Buffalo, New York, has certainly seen the head. He hoped to sell 310 vehicles in June, but the store on Friday had already made 360 and Santiago

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