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Mar 09
2010

Bad results? Don’t blame it on the snow

Posted by mcole in weatherunemploymentsalesRiskretailers

mcole

Winter may be almost over, but companies are still suffering from it or, at least, using it as an excuse for disappointing results.

Fast-food chain Burger King said it expects lower third-quarter revenue as bad weather impacted comparable store sales in the US and Canada. The company said the weather accounted for more than a third of an 8.2 percent decline in same store sales there in the last two months. Ruby Tuesday also blamed bad weather for poor sales.

"As we mentioned during our second quarter earnings call, US and Canada January sales were impacted by adverse weather conditions, which worsened in February, resulting in lower than anticipated sales," said John Chidsey, chairman and CEO of the company in a press release Tuesday.

Even the government seemed to have caught the blame-the-weather bug. Last week, White House economic adviser Larry Summers said winter blizzards were likely to distort U.S. unemployment data for February.

"Seriously, we are still going with the bad weather?" asked a Seeking Alpha contributor in reaction to Summers' comments. "The last time I checked it usually snowed in the winter anyhow. I realize we had a few days of snow, but nothing major and it is beyond me how snow would be firing people. I will say that the weather impacted retail sales, but not all this other data."

Yet retailers actually did very well in February, further discrediting the weather excuse cited by fast-food chains and economists.

US retailers posted their best monthly sales performance since just before the recession started in 2007, as lean inventories meant they did not need to resort to steep discounts, Reuters reported Thursday. And they did so despite record-setting snow in much of the eastern part of the country.

Even McDonalds did well enough despite the weather. Same store results worldwide were up 4.8 percent, and sales in the US were up almost a percentage point. Then again, maybe it snowed less at McDonald's than at Burger King.

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