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Today, 10:54 AM
- Consumer spending in the U.S. showed some strength in January to defy some of the signals being sent by equity markets.
- "The markets may have decided that the U.S. is headed for recession, but obviously no one told U.S. consumers," said econimist Paul Ashworth.
- Though data shows consumers have pulled back on some big-ticket categories to save more, there's some pockets of retail that could surprise this year - especially if gas prices move closer to $1/gallon.
- Companies that consumers interface with daily or weekly are more likely to benefit than those in the luxury discretionary space where falling 401K or profit-sharing plan values weigh a bit heavy on demand (home improvement, jewelry, high-end auto, etc), note analysts.
- Potentially sitting in that sweet space: Ross Stores (NASDAQ:ROST), TJX Companies (NYSE:TJX), Ulta Salon (NASDAQ:ULTA), Columbia Sportswear (NASDAQ:COLM), Skechers (NYSE:SKX), Nike (NYSE:NKE), Foot Locker (NYSE:FL), Dollar General (NYSE:DG), Target (NYSE:TGT), Party City (NYSE:PRTY), Churchill Downs (NASDAQ:CHDN), Isle of Capri (NASDAQ:ISLE), Penn National Gaming (NASDAQ:PENN), Boyd Gaming (NYSE:BYD), Casey's General Stores (NASDAQ:CASY), McDonald's (NYSE:MCD), Cracker Barrel (NASDAQ:CBRL)... add your own in the comments.
Thu, Feb. 4, 11:23 AM
- The retail sector is struggling after Kohl's issues soft guidance and with several reports from store chains (Cato, Zumiez, Fred's) tipping weak January traffic.
- Department store decliners include J.C. Penney (JCP -3.1%), Macy's (M -2.7%), Nordstrom (JWN -5.6%), and Dillard's (DDS -1.3%). While mall names Gap (GPS -1.4%), American Eagle Outfitters (AEO -1.6%), Abercrombie & Fitch (ANF -2.2%), Children's Place (PLCE -3.1%), and Carter's (CRI -1.9%) are also weak compared to the broad market.
- Target (TGT -3%), Costco (COST -2.8%), and Wal-Mart (WMT -1%) are also lower. Earlier today. Costco reported a +1% comp in the U.S. for January.
- Discount-leaning Fred's (FRED -8.7%), Dollar Tree (DLTR -3.1%), Dollar General (DG -1.6%), Big Lots (BIG -3%), Five Below (FIVE -2.9%), TJX Companies (TJX -2.2%), and Ross Stores (ROST -1.2%) are also feeling a pinch.
Fri, Jan. 22, 9:21 AM| Fri, Jan. 22, 9:21 AM
Dec. 15, 2015, 9:33 AM
- Egg prices fell 4.8% in November to follow a 3.8% slide in October.
- The level of egg prices is still 23.7% higher than a year ago, due largely to the avian flu issue earlier this year.
- Milk prices were also lower during November, down 0.7% M/M and 7.7% Y/Y. The broader dairy category saw price declines of 3.4% Y/Y and 0.6% M/M.
- These are some of the companies that talked about milk or egg prices being a factor during their most recent earnings conference call: CALM, KO, DF, WWAV, GIS, POST, KR, DG, OTCPK:PRRFY, BDBD, GTIM, BOBE, HRL, FLO, JJSF, DENN, MCD.
- BLS CPI data
Dec. 8, 2015, 4:37 PM
- Credit Suisse updated its list of favorite consumer discretionary stocks after factoring in consumer spending trends.
- Apparel & Footwear: Acquisitions and a mix shift toward premium products could help lift shares of Hanesbrands (NYSE:HBI), according to the investment firm.
- Autos & Auto Parts: Magna International (NYSE:MGA) is well-positioned due the trend toward "vehicle globalization."
- Gaming & Lodging: Six Flags (NYSE:SIX) has an attractive dividend yield and could see pricing gains.
- Homebuilding & Building Products: Caesarstone (NASDAQ:CSTE) is poised to see “significant" revenue and EBITDA growth over the next several years.
- Media, Cable & Satellite: Time Warner (NYSE:TWX) is called a value pick as the underlying business looks under-appreciated if the valuation of HBO is stripped away.
- Packaged Food: The risk-reward profile on Kellogg Company (NYSE:K) sets it apart from peers.
- Retail, Broadlines & Department Stores: Consistency continues to reign supreme at Costco (NASDAQ:COST).
- Retail, Food & Drug: Comp sales are improving at Dollar General (NYSE:DG). An aggressive share repurchase strategy also provides investors a backstop.
- Retail, Hardlines: Home Depot Inc (NYSE:HD) is tapped to outperform with the right management team in the right business.
- Restaurants: Perhaps the biggest surprise of the bunch, McDonald's (NYSE:MCD) is given the nod by CS. Same-store sales improvement is expected.
Dec. 4, 2015, 10:29 AM
- Economists think that the combination of a stronger U.S. jobs environment and sub-$2 gas prices could improve some consumer spending habits, although not as much for traditional big box retailers, apparel chains, and electronics stores as for specialty retailers selling lower-end personal care, housing, and decor items. Though middle-income and low-income consumers continue to be thrifty with major purchases (logo apparel, gadgets), there have been signs in recent earnings reports of strength in everyday items such as shampoo, mattresses, and underwear.
- That trend could benefit a variety of chain stores with an U.S. focus including Five Below (NASDAQ:FIVE), Ulta Salon (NASDAQ:ULTA), TJX Companies (NYSE:TJX), Dollar General (NYSE:DG), Ross Stores (NASDAQ:ROST), Kirkland's (NASDAQ:KIRK), Sally Beauty Holdings (NYSE:SBH), Michaels Companies (NASDAQ:MIK), Party City (NYSE:PRTY), and even Mattress Firm (NASDAQ:MFRM).
- The bump in consumer staples spending could provide a lift to Procter & Gamble (NYSE:PG), Kimberly-Clark (NYSE:KMB), and Clorox (NYSE:CLX) as well for the U.S. side of their business.
- Related ETFs: XLP, VDC, FXG, RHS, FSTA, PSL, PSCC
Dec. 3, 2015, 7:10 AM
- Dollar General (NYSE:DG) reports same-store sales rose 2.5% in Q3 as both traffic and average transaction basket increased.
- Sales by category: Consumables: $3.92B (+7.6%); Seasonal: $555.86M (+6.0%); Home products: $317.96M (+6.4%); Apparel: $271.56M (+6.1).
- Gross profit rate +19 bps to 30.3%.
- SG&A expense rate +20 bps to 22.0%.
- Operating profit rate improved 19 bps to 8.80%.
- Inventory +5.1% to $3.10B.
- Guidance: Dollar General expects same-store sales to increase 2.5% to 2.8% for the full fiscal year. Q4 EPS of $1.23-$1.28 vs. $1.27 consensus is seen and FY15 EPS of $3.85-$3.95 vs. $3.92 consensus.
- Previously: Dollar General beats by $0.01, misses on revenue (Dec. 03 2015)
Dec. 3, 2015, 6:59 AM
Dec. 3, 2015, 6:54 AM
Dec. 3, 2015, 6:54 AM
Dec. 2, 2015, 5:30 PM
Nov. 11, 2015, 1:52 PM
- Discounters are part of the broad sell-off in retail chain stocks.
- Five Below (FIVE -6.9%), Dollar Tree (DLTR -2.5%), and Dollar General (DG -3.8%) are all lower on the day. The three stocks all trail the return of the S&P 500 by a wide margin on the year.
- Concerns over the impact of high inventory levels on promotional activity have picked up this week.
- Previously: Retailers eye inventory levels with Black Friday 17 days away (Nov. 10)
Oct. 21, 2015, 7:16 AM
- Bank of America Merrill Lynch lifts its rating on Dollar General (NYSE:DG) to Neutral after having the stock lined up with an Underperform rating.
- The investment firm took off its bear call after shares of Dollar General retreated 6% off of a broad retail sell-off related to Wal-Mart's cut in guidance last week.
- Dollar General reported sales growth of 8% in Q2 with comps up 2.8%.
Oct. 14, 2015, 11:30 AM
- Wal-Mart's profit warning today is having a major impact in the retail sector.
- The company's commitment to raise wages is expected to pressure other companies to follow suit.
- Discounters in particular are feeling the Bentonville pinch.
- Decliners: Ollie's Bargain Outlet Holdings (NASDAQ:OLLI) -5.0%, Dollar Tree (NASDAQ:DLTR) -3.4%, Dollar General (NYSE:DG) -3.0%, PriceSmart (NASDAQ:PSMT) -2.1%, Big Lots (NYSE:BIG) -1.5%, Fred's (NASDAQ:FRED) -1.3%, Burlington Stores (NYSE:BURL) -1.1%.
- Previously: Retail giants lower after Wal-Mart warns (Oct. 14 2015)
- Previously: Wal-Mart sits at multi-year low after guidance stuns (Oct. 14 2015)
Oct. 13, 2015, 4:38 PM
- Roughly 255 positions in corporate support are to be eliminated, effective immediately. The company expects to take a pretax cash expense of about $7M in Q3 thanks to severance costs.
- Of the 255 positions, 115 are already vacant. Jobs at the store level will not be affected.
- DG -0.9% after hours
Aug. 27, 2015, 7:23 AM
- Dollar General (NYSE:DG) reports same-store sales rose 2.8% in Q2.
- Traffic and average transaction size were both higher for Dollar General in the quarter.
- Sales by category: Consumables: $3.9B (+8%); Seasonal: $642M (+8%); Home products: $304M (+6.6%); Apparel: $281M (+4.7%).
- Gross profit rate +36 bps to 31.2%.
- SG&A expense rate +10 bps to 21.8%.
- Operating profit rate improved 27 bps to 9.34%.
- Store count +663 Y/Y to 12,198.
- FY2015 Guidance: Total sales: +8% to +9%; Same-store sales: +3% to +3.5%; Operating profit: +7% to +9%; Diluted EPS: ~3.85 to $3.95; Capex: $500M to $550M; New stores: ~730.
- DG -3.52% premarket after running up a 4.0% gain yesterday.
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