Wed Feb 12 2014
Live Index (1454 articles)

Will It Really BE the Weather?

Forget Janet Yellen or the Olympics. The hottest story in the United States right now is the weather.

The U.S. House is voting on raising the debt ceiling today, instead of tomorrow, due to an impending snowstorm moving up the East Coast. In the Midwest, record cold temperatures hit yet again this morning. While the West finally got some much needed rain, drought conditions persist.

But what about companies that have to deal with the conditions? How many people are going to the shopping malls with yet another snow storm on the way?

Usually, one big storm or weather event isn’t enough to wreck havoc with an entire quarter unless it is a protracted event, such as a hurricane. But that hasn’t stopped companies from blaming the weather for poor quarterly results in the past. Blaming the weather has become something of a joke among investors.

But these awful weather conditions have continued for weeks in about two-thirds of the United States.

We’re getting some clues from the earnings reports, however.

Last night, Urban Outfitters reported its fiscal fourth quarter results which ended on Jan 31 so these results included the first polar vortex and countless snows. Urban Outfitters operates the Urban Outfitters, Anthropologie and Free People retail stores and websites. Sales were a record but comparable-store sales were up just 1% in the quarter.

In the press release there was mention of the weather, but the company didn’tblame the weather for the results.

“Although customer response to our early spring fashion offerings has been difficult to read due to weather abnormalities, the Anthropologie and Free People brands continue to deliver solid comparable Retail segment sales gains,” said Richard A. Hayne, CEO.

The weather also didn’t stop moviegoers from heading to the theater to see The Lego Movie over the weekend. It brought in $ 69.1 million, the second largest February box office weekend ever, surpassed only by 2004′s Passion of the Christ.

So which is it?

With the worst weather conditions in decades, will it be a legitimate reason for disappointing earnings?

Or will it be used, once again, as an excuse by companies to disguise weaker-than-hoped for results?

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