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BUSINESS
2Q profit reports from retailers show more strain
NEW YORK -- From affluent shoppers at Saks to bargain-hunters at Target, from Home Depot to office supplier Staples, consumers are pulling back and that's hurting retailers and raising more concerns about how they'll do the rest of the year.
The latest round of second-quarter reports show more signs of financial stress on shoppers, as Target's customers stick to necessities and have trouble making their credit card payments. Saks says it's now seeing its high-end designer consumer cut back, whereas previously it was only the aspirational customers who were the ones retrenching.
And while falling gas prices in recent weeks should provide some relief to consumers, economists say that won't be enough to offset all the other economic problems out there, from a housing slump and a weakening job market to soaring food prices and tighter credit.
Home Depot, the nation's largest home improvement retailer, saw its profit drop 24 percent and reiterated its weak outlook for the year. Still, the results weren't as bad as Wall Street expected and the retailer benefited from a return of do-it-yourselfers, lulled by warmer weather and the government stimulus checks.
Target said it earned $634 million for the three months ended Aug. 2, down from $686 million a year earlier. Sales grew 5.7 percent to $15 billion, while same-store sales slipped 0.4 percent.
