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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

1 hour ago - Politics & Policy

Manchin's massive means test

Illustration: Aïda Amer/Axios

Sen. Joe Manchin (D-W.Va.) is offering progressives a trade: He'll vote for their cherished social programs if they accept strict income caps for the recipients, people familiar with the matter tell Axios.

Why it matters: Manchin’s plan to use so-called means-testing for everything from paid family medical leave to elder and disabled care would drastically shrink the size and scope of the programs. It also would bring a key moderate vote to the progressive cause.

The China whisperer

Nick Burns. Photo: Chen Mengtong/China News Service via Getty Images

President Biden's nominee for ambassador to China will face aggressive questioning Wednesday about the most important, and potentially perilous, bilateral relationship in the world.

Why it matters: While Nick Burns is an experienced diplomat with support on both sides of the aisle, lawmakers want to use his confirmation hearing to force the administration into some tough positions on China.

Jan. 6 committee recommends contempt charges against Bannon

Steve Bannon. Photo: Stephanie Keith/Getty Images

The House select committee investigating the deadly Jan. 6 Capitol riots unanimously approved a resolution Tuesday night recommending that former Trump aide Steve Bannon be held in contempt of Congress for refusing to comply with a subpoena.

Why it matters: The resolution sets up a House vote to refer Bannon for potential criminal prosecution, signaling that the committee will not tolerate attempts by former President Trump and his associates to stymie the investigation.

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