U.S. Concrete sales flat in the third quarter
Houston-based ready mix concrete company U.S. Concrete saw a relatively flat quarter for sales, with earnings growth hurt in part by adverse weather and a difficult housing market.
Earnings fell 10.5 percent to $10.04 million from $11.22 million in last year’s third quarter. Sales essentially were flat at $250.3 million compared with $250.6 million in the same period last year.
“This decline reflects the continued downturn in residential home construction activity in many of our markets, together with the impact of adverse weather conditions early in the quarter in our Texas markets,” the company said in a statement.
President and CEO Michael Harlan said although the company has been challenged by negative trends in residential construction, U.S. Concrete was able to charge higher prices for its product: the average sales price per cubic yard of ready-mixed concrete increased 5.5 percent in the third quarter compared with last year.
“However, we are seeing early signs of pricing pressure in select markets from our competition,” Harlan said. “Given these market conditions and an expectation for a decline in volumes in 2008, we are aggressively evaluating our cost structure and asset base. We have already begun to take action in several markets to bring our cost structure in line with our volume outlook and will continue to make adjustments throughout our business units over the coming months.”
U.S. Concrete serves professional and construction markets, with products including ready-mixed concrete, concrete-related products and precast products.
BBB, Sherwin-Williams reach ad agreement
Sherwin-Williams will continue to offer a “lifetime guarantee” on its Duration Exterior Latex Paint after an inquiry by the National Advertising Division of the Council of Better Business Bureaus. The council determined that Sherwin-William’s advertising claim is valid because the paint company will provide replacement coatings if paint peels or blisters during the lifetime of a purchaser while the individual owns a home painted with the product.
The council took exception, however, with the advertising claim that “You won’t have to paint again. Ever.”
“[This claim] offers a specific level of performance and a promise to consumers,” the council said. Sherwin-Williams has agreed to discontinue using that statement in its advertising materials, according to a press release issued by the Better Business Bureaus Council.
Unseasonably warm weather hurts October chain store sales
October sales at U.S. chain stores grew 1.6 percent compared to the same month in 2006, according to the International Council of Shopping Centers (ICSC) tally of same-store sales.
October held relatively steady with September (1.7 percent), both adversely affected by the unseasonably warm weather patterns across the United States, which impacted apparel sales and kept the overall industry performance down.
“Over the last two months, retailers have struggled with the warm weather’s negative impact on retail spending,” said Michael P. Niemira, ICSC’s chief economist and director of research. “However, for the November-December period, we are expecting a marked improvement from the very sluggish September-October performance.”
Wal-Mart reported a same-store sales increase of 0.4 percent for October, which was lower than the 1.1 percent increase expected by analysts. Further, the retailer said it also expects moderate sales in November, which marks the beginning of the holiday shopping season — which can account for 25 percent to 40 percent of annual sales.
Wal-Mart shares fell almost 2 percent to $43.10 in early afternoon New York Stock Exchange trading following the announcement.
ICSC expects a 2.5 percent year-over-year sales increase industry-wide for November.
ICSC Chain Store Sales Trends is a monthly report on U.S. retail sales performance based on a preliminary compilation of reported sales for 44 chain stores. Industry sales aggregates are compiled for comparable-store or same-store sales and for total store sales.