Retail CFOs forecast 1.95% increase in overall sales for 2010

Chicago Chief financial officers at leading U.S. retailers expect a 1.95% increase in overall sales for 2010, according to a recent survey by BDO USA, LLP, one of the nation’s leading accounting and consulting firms. Forty-seven percent of CFOs anticipate their total sales revenue for 2010 to increase over 2009, and 30% of CFOs say their sales will be about the same. Only 21% of CFOs project a decrease in total sales for 2010, which is a more conservative outlook than 2009 (60%).

Despite keeping a close eye on inventory, nearly half of retail CFOs (42%) plan to measurably increase inventory purchases in the first half of 2011. Others are holding off -- 16% are delaying planned increased inventory purchases until the second half of 2011, and 24% are waiting to increase inventory until 2012 or later. Only 17% of CFOs plan to increase their inventory levels during fourth quarter 2010 in time for holiday shopping. 

“There are some rays of light for retailers, who are feeling less pessimistic than last year” said Doug Hart, partner in the retail and consumer product practice at BDO USA, LLP. “Comparable store sales rose approximately 3% in August despite significant back-to-school discounting. However, consumer confidence fell to its lowest level since February so we could see a pull-back in September sales. In fact, retailers have modest expectations regarding comparable store sales for the remainder of 2010, projecting a 1.9% increase.”

These findings are from the most recent edition of the BDO USA, LLP Retail Compass Survey of CFOs, which examined the opinions of 100 CFOs at leading retailers located throughout the country. The retailers in the study were among the largest in the country, with revenues ranging from $100 million to $100 billion. The survey was conducted in August and September of 2010.