Weak housing market hits home goods
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KAI RYSSDAL: New Jersey-based Bed, Bath and Beyond had a tumble on Wall Street today. The home goods retailer saw shares fall 5.4 percent. The drop followed yesterday’s news that first-quarter earnings would be below expectations.
Tying it all together with what Mr. Bernanke said today, some analysts are pointing the finger at the weak housing market, as Jeremy Hobson reports.
JEREMY HOBSON: Yesterday’s bad news from Bed, Bath and Beyond’s CEO was a shift for a company that had been able to weather the cool-down in the housing market.
But Yale Economics professor Robert Shiller says it was just a matter of time before sliding home sales hit the home goods sector. He says this is just the beginning.
ROBERT SHILLER: We can go through years of slow housing markets. And that could be years of weak performance for any of the housing accessories companies.
Shiller says the two industries are tied together in countless ways because of all the things people buy when they purchase a home.
Frank Badillo, a senior economist at TNS Retail Forward, says the home goods sector may be suffering because of the weak housing market, but there’s no need to panic.
FRANK BADILLO: The home sector is the most vulnerable, but that doesn’t mean that consumers are pulling back across all their spending.
Indeed, Bed, Bath and Beyond is still expecting this year’s first-quarter sales to be 11 percent higher than last year’s. But that’s still lower than what investors were hoping for.
In Washington, I’m Jeremy Hobson for Marketplace.
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