May 24, 2019

Companies are battling with Mother Nature

Illustration: Aïda Amer/Axios

Already facing the uncertainty and increased costs of the trade war and a looming end of the business cycle, American companies are finding they now have a new foe to fight: prolonged, and in some cases unanticipated, extreme weather conditions.

Why it matters: The conditions have been awful for farmers, and the agriculture and commodities markets, and now companies ranging from retail to industrials are highlighting weather-related struggles weighing on sales and revenue.

What's happening: Across the Midwest and Central U.S., this spring has brought one atmospheric onslaught after another, from late season snowstorms to severe thunderstorms that have left rivers overflowing, exceeding historic flood benchmarks.

What they're saying:

  • "Weather was challenging during the quarter resulting in suppressed demand for our spring seasonal goods, which were down high single-digits," said Kohl's CFO Bruce Besanko, after the retailer's 3.4% same-store sales decline in the first quarter.
  • "The weather in February impacted our business. 17 of 19 regions were negative," said Home Depot CFO Carol Tomé after posting a 2.5% increase in same-store sales versus the 4.2% analysts expected.
  • "I don't think we could have envisioned ... what is now approaching record rainfall in Southern California or in California," said Bernard Acoca, president and CEO of El Pollo Loco, after the restaurant reduced guidance for the rest of fiscal 2019.
  • DowDuPont and UPS also cited the impacts of flooding and weather-related disruptions.

Between the lines: "Normally, we'd be highly skeptical of retailers blaming the weather for disappointing sales," Ed Yardeni, president and chief investment strategist at Yardeni Research, wrote in a note to clients.

  • "But this time, Mother Nature may indeed be at fault."

Meteorologists agree: "These events have likely affected businesses in varying ways: from either a delivery standpoint or the inclement weather making it difficult for consumers to actually get to the stores," Steve Bowen, director and meteorologist for Aon Benfield's Impact Forecasting division, tells Axios in an email.

Our thought bubble, from Axios Science editor Andrew Freedman: The extreme weather we've been seeing is consistent with a warming climate in which the atmosphere is able to hold more moisture.

  • Studies have shown an increase in heavy precipitation events during the past few decades in the Midwest and Central states, and other research shows a greater tendency for certain weather patterns to form that can lead to amplified extremes.

Go deeper ... Central U.S. storms: 3 die in Missouri, "violent tornado" hits Jefferson City

Go deeper

World coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Axios Visuals

Japan's economy minister outlined plans on Monday to end the nationwide state of emergency as the number of new novel coronavirus cases continues to decline to less than 50 a day, per Bloomberg. Japan has reported 16,550 cases and 820 deaths.

By the numbers: Over 5.4 million people have tested positive for the virus as of Monday, and more than 2.1 million have recovered. The U.S. has reported the most cases in the world (over 1.6 million from 13.7 million tests). The U.K. is reporting over 36,800 deaths from the coronavirus — the most fatalities outside the U.S.

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of midnight ET: 5,401,701 — Total deaths: 345,060 — Total recoveries — 2,149,407Map.
  2. U.S.: Total confirmed cases as of midnight ET: 1,643,238 — Total deaths: 97,720 — Total recoveries: 366,736 — Total tested: 14,163,195Map.
  3. World: White House announces travel restrictions on Brazil, coronavirus hotspot in Southern Hemisphere Over 100 coronavirus cases in Germany tied to single day of church services — Boris Johnson backs top aide amid reports that he broke U.K. lockdown while exhibiting symptoms.
  4. Public health: Officials are urging Americans to wear masks headed into Memorial Day weekend Report finds "little evidence" coronavirus under control in most statesHurricanes, wildfires, the flu could strain COVID-19 response
  5. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Public employees brace for layoffs.
  6. Federal government: Trump attacks a Columbia University study that suggests earlier lockdown could have saved 36,000 American lives.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Updated 2 hours ago - Politics & Policy

U.S. coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

President Trump doubled down on his push to reopen schools, tweeting late Sunday: "Schools in our country should be opened ASAP."

Zoom in: Trump pushed back on NIAD Director Anthony Fauci cautioning against the move earlier this month, calling his concerns "not an acceptable answer."