Monday, April 23, 2007

It's spreading:Target and GM Site Mortgage Meltdown for Decreased Sales.

April 23 2007: 4:28 PM EDT
LOUISVILLE, Ky. (Reuters) -- The crisis in the U.S. mortgage market has hurt U.S. auto sales this month, General Motors Corp. Vice Chairman Bob Lutz said Monday.
Lutz, who was in Louisville, Kentucky to attend an automotive industry conference, said he did not know how GM's (Charts, Fortune 500) own sales had performed in April to date, but said he expected the whole sector would feel the impact of the stress on the housing finance market.

"The market as a whole has been a little weakish. That has come as a result of the housing market problems and the mortgage industry meltdown," Lutz told Reuters. "A lot of people are finding themselves in a position of reduced affordability and that has had an impact, not just on us, but across the industry."
GM and other automakers will report April U.S. sales results on May 1.

Regarding Target from
"It's pretty surprising," Morningstar analyst Joseph Beaulieu said of Target's lowered forecast. "I don't think anyone really understands what's going on."
Beaulieu speculated that colder weather or high gas prices might have kept customer away from the stores in recent weeks.
Earlier this month, Target said it expected April same-store sales to fall 2 percent to 4 percent due to the earlier timing of Easter. Target's March same-store sales - a period that included pre-Easter shopping - rose 12 percent.
ThinkEquity analyst Ed Weller wrote in a research report the lowered forecast "appears to suggest an April (same-store sales) decline in the range of 8 to 9 percent."