Today - Thursday, December 5, 2013
8:25 AMDollar store group may be benefiting from consumers trading down
- Shares of Dollar General (DG) rally in early trading after the company pulls off the rare feat in this retail environment of increasing traffic and average transaction size during its Q3.
- The biggest quibble from the report might be the higher mix of perishables which drove down margins.
- Dollar General's performance adds some credence to the theory that consumers are trading down from big box and department store chains. On watch: DLTR, FIVE, FDO.
- DG +2.4% premarket.
8:18 AMBuzz builds over global unveiling of new Ford Mustang
- Ford (F) officially unveiled the sixth version of its iconic Mustang model at the New York World's Fair. The model's roots trace back to 1964 when it was designed under the supervision of Lee Iacocca.
- The sport car will go on sale globally next year - including an entry into Europe and Asia for the first time.
- Quick look from Motor Trend: "It is lean-looking, longer, lower and wider."
- Previous: Halo effect of Ford Mustang.
8:04 AMJos. A. Bank improves margins amid promotional retail scene
- JoS. A Bank (JOSB) put in a powerhouse quarter for direct marketing sales which almost pulled it up to a positive comp for Q3.
- An impressive trend from the retailer is that it has managed to improve its gross margin rate for two consecutive quarters as the non-promotional side of the business has been resilient.
- JOSB +0.2% premarket.
7:54 AMTandy Leather Factory reports Nov. sales up 8%
- Tandy Leather Factory's (TLF) Nov. sales were $7.6M, up 8% compared to November 2012 sales of $7.1M. YTD sales are up 9% to $70.9M.
- Retail Leathercraft: +9% to $4.5M. Comps +9%.
- Wholesale Leathercraft: +5% to $2.7M. Comps +5%.
- International Leathercraft: +7% to $379,000.
- CEO Jon Thompson: "We were pleased with our November sales and the beginning of the Christmas shopping season, despite the bleak forecasts for retailers overall. We met our internal sales goals for Black Friday weekend and did so without significant discounting."
- Source: Press Release
7:44 AMAnother retail dud: Dismal outlook from The Wet Seal| Comment!
7:17 AMMore on L Brands' November sales report
- L Brands (LTD) saw Victoria's Secret, Bath & Body Works, and Limited Brands all lose ground during November with lower comparable store sales - while La Senza held level.
- A 9% increase in Victoria's Secret Direct sales kept the falloff from being even worse.
- During the course of the company' fiscal year its store count has increased by 57 to 2,933.
7:11 AMMore on Dollar General's Q3
- Dollar General (DG) cites the same challenging consumer environment other retailers have seen, but appears to have benefitted from a trading-down effect as store traffic numbers held up better during Q3 than industry averages.
- Gross profit as a percentage of sales fell 61 bps Y/Y to 30.32% during the period due to heightened promotional activity.
- Guidance for full year EPS is set at $3.18 to $3.22 vs. $3.22 consensus.
- The company announces it authorized an additional $1B in share repurchases.
7:02 AMReport: GM to cut production in South Korea| Comment!
6:57 AMGlobal air traffic saw solid growth in October
- The IATA reports global air traffic rose 6.6% in October to show an acceleration from September's mark.
- The markets in China and Russia paced the gains, up 12.3% and 11.4% respectively, while airlines in Latin America recorded the best improvement in load factor on tight capacity.
- Though airlines in North America only saw a moderate 3.6% rise in international travel, indications are that the business environment is improving.
- Related stocks: AAL, UAL, DAL, RYAAY, CPCAY, SINGY, CEA, ZNH, CPA, GOL, LFL, IAG, DLAKF, AIDIF, QUBSF.
6:33 AMWells downgrades J.M. Smucker, notes downturn in coffee growth
- "We’re downgrading J.M. Smucker (SJM) to Underperform from Market Perform. We maintain that SJM is among those most at risk within a challenging consumer environment and note that: i) coffee growth is slowing sharply within single-serve and ii) cost deflation benefits are poised to moderate while recent benefits are weakened by lower prices at retail."
- Firm says long-term risk to coffee business is not yet reflected in valuation, despite reduced 2014 guidance. New single-serve entrants TreeHouse and Kraft (KRFT - Maxwell House and Gevalia) are already impacting sales, and a 2015 full-scale rollout of McCafe (MCD) could put some of SJM's Dunkin' Donuts business at risk.
- Wells values shares at $92-94, vs. a current $104.75.
5:18 AMGM to scale down Chevy sales in Europe
- GM (GM) plans to end mainstream sales of Chevrolet cars in Europe by the end of next year and focus on its Opel and Vauxhall brands, although the company will still sell Chevrolets in Russia. GM will also focus on "iconic" Chevy products in Europe such as the Cadillac.
- The shift, which comes amid falling Chevy sales, will cost GM $700M-1B, most of which the firm will book this quarter and in H1 2014. (PR)
- Meanwhile, Dallas-based Hayman Capital Management has reportedly bought a stake in GM. "GM equity represents one of the most compelling risk/reward situations of any large cap in the world today," Hayman said.
- Research firm IHS Automotive expects GM to cut the number of cars it produces in South Korea by 20% to 650,000 vehicles by 2015. The car maker has expressed concerns about salary expenses, labor relations and tension with North Korea.
3:34 AMCostco's FQ1 sales rise 5%
- Costco's (COST) net sales rose 5% on year to $8.78B in November.
- Comparable sales +2%, missing consensus of +3.5%; U.S. +2%, International +1%.
- Excluding the negative impact of gasoline price deflation and foreign exchange, comparable sales +4% vs forecasts of 4%; U.S. +3%, International +6%.
- FQ1: total sales +5% to $24.47B.
- Comparable sales +3%; U.S. +3%, International +1%.
- Excluding the negative impact of gasoline price deflation and foreign exchange, comparable sales +5%; U.S. +4%, International +6%.
- Costco operates 648 warehouses, including 461 in the U.S. and Puerto Rico and 87 in Canada. (PR)
3:19 AMAT&T eyes $2.75B Verizon spectrum
- AT&T (T) is reportedly thinking about bidding for spectrum licenses owned by Verizon Wireless (VZ), which bought the assets for $2.4B and may receive up to $2.75B in any deal.
- An AT&T bid could put it up against T-Mobile US (TMUS), whose marketing strategy has included targeting AT&T in the companies' battle for customers.