Thu, Sep. 15, 9:02 AM
- Retail sales fell in August on a month-over-month comparison. The drop wasn't a large surprise considering the onslaught of warnings from the retail sector on store traffic.
- 8 out of the 13 retail categories showed negative growth during the month, with the largest drops recorded in the building material/garden equipment/supplies dealers and miscellaneous store retailers categories. The broad weakness turned on its head the argument that money freed up from a lower level of auto sales would be funneled into other consumer purchases.
- Food services and drinking places showed a +0.9% M/M and +5.8% Y/Y increase in a somewhat surprising result considering the harsh read from Black Box Intelligence on August same-store sales in the restaurant sector BITE. Is the discrepancy an indication that independent restaurants are taking market share?
- On a year-over-year basis, retail sales were up 1.9%. As expected the Amazon-influenced nonstore retailers category did the heavy lifting with an 11% gain. Larger U.S. retail chains (WMT, SPLS, TGT, BBY, DG, COST, KR, WBA, CVS, LOW, HD, SWY) have been raising the issue of pricing pressure in recent conference presentations and guidance updates which could be a nagging sales deflator for the balance of the year.
- Previously: Retail sales disappoint in August (Sept. 15)
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, FXD, IYC, RHS, FDIS, PEJ, FSTA, PSL, SCC, RCD, UCC, PEZ, PMR, PSCC, UGE, PSCD, SZK, BITE, CNDF, CNSF, IBUY, JHMC, JHMS.
Fri, Aug. 19, 4:38 PM
Wed, Aug. 17, 6:28 AM
- Lowe's (NYSE:LOW) reports comparable-store sales rose 2% in Q2.
- Comps for the U.S. home improvement business grew 1.9%.
- Gross margin rate slightly down to 34.44%.
- SG&A expense rate increased 26 bps to 21.2%.
- Merchandise inventory +9.3% to $10.6B.
- Home improvement and hardware stores +262 Y/Y to 2,108.
- FY2016 Guidance: Sales growth: ~+10%; Comparable-store sales: ~+4%; Operating margin: ~+50 bps; Tax rate: ~38.1%; Diluted EPS: ~$4.06; New stores: ~45.
- LOW -3.72% premarket.
Wed, Aug. 17, 6:02 AM
Tue, Aug. 16, 5:30 PM
Mon, Aug. 15, 9:54 AM
- Credit Suisse analyst Seth Sigman and team sizes up Home Depot (HD +0.9%) and Lowe's (LOW +1%), with both home improvement chains due to report earnings this week.
- The investment firm expects Home Depot to report a 4.8% increase in comparable sales for the quarter to outpace the 4.0% rise seen for Lowe's. The outlook is based on a stronger performance for the housing markets where Home Depot has a higher concentration.
- CS sees Home Depot reporting $1.95 EPS vs. $1.97 consensus and Lowe's coming in at $1.37 vs. $1.41 consensus. An aggressive promotional stance during the quarter is expected to take a toll on the bottom line.
- Looking ahead, Credit Suisse thinks comments from management on the impact of sales pulled forward will be key to factoring in underlying demand.
- Home Depot reports earnings on Tuesday, while Lowe's is due to spill numbers on Wednesday.
- Sigman ranks #720 out of the 4,120 analysts listed on TipRanks.com.
Fri, Aug. 12, 8:49 AM
- Retail sales came in flat for July with weakness in grocery stores, restaurants, and department stores standing out. The U.S. economy had produced three straight months of positive retail sales growth before the disappointment in July.
- Once again, the nonstore retailers category (primarily e-commerce) led growth with a 1.3% M/M and 14.1% Y/Y gain in July. Sales at health and personal care stores were also solid with a 7.8% Y/Y rise.
- Retail sales in June were revised to +0.9% from +0.7% in a positive development for the sector.
- Retail Sales report (.pdf)
- The S&P Retail ETF (NYSEARCA:XRT) is up 0.64% premarket to $45.55 as it looks to extend on yesterday's gain.
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, FXD, IYC, RHS, FDIS, PEJ, FSTA, PSL, SCC, RCD, UCC, PEZ, PMR, PSCC, UGE, PSCD, SZK, BITE, JHMS, IBUY, CNSF, CNDF, JHMC.
- Related stocks: WMT, TGT, COST, SPLS, HD, LOW, AMZN.
Thu, Jul. 28, 11:11 AM
Fri, Jul. 15, 8:51 AM
- There were steady gains across the bulk of categories that are counted for retail sales in June, with the notable exception of clothing and clothing accessories which declined 1% M/M.
- Building materials and garden equipment sales increased 3.9% Y/Y and almost 8% Y/Y in a positive sign for Home Depot (NYSE:HD) and Lowe's (NYSE:LOW). The monthly surge was the largest in the category since 2010.
- The closely-watched nonstore retailers category, which tracks sales by Amazon (NASDAQ:AMZN) and other e-commerce players, outperformed once again with a 14% Y/Y gain.
- The category that includes restaurants showed a 5% gain on a year-over-year comparison, but was down 0.3% from last month's sales tally. The 5% pace is far above what most major chains are seeing with their comparable restaurant sales growth (~0.3% YTD) in another indication that small, independent operators are taking market share.
- Previously: June retail sales strong, but May revised lower (July 15)
- Related ETFs: IYK, IYC, SCC, UCC, UGE, SZK, BITE, IBUY
Fri, Jul. 1, 7:03 AM
- June monthly performance was: +2.86%
- 52-week performance vs. the S&P 500 is: +7%
- $0.25 in dividends were paid in June
- Top 10 Holdings as of 5/31/2016: S&P Global Inc (SPGI): 2.15464%, Archer-Daniels Midland Co (ADM): 2.15039%, Cincinnati Financial Corp (CINF): 2.13109%, McCormick & Co Inc Non-Voting (MKC): 2.10728%, C.R. Bard Inc (BCR): 2.10554%, Cintas Corp (CTAS): 2.10524%, Leggett & Platt Inc (LEG): 2.10068%, Lowe's Companies Inc (LOW): 2.09886%, Brown-Forman Corp Class B (BF.B): 2.09499%, Pentair PLC (PNR): 2.09495%
Mon, Jun. 27, 11:28 AM
- Investors may be tempted to put money into hardline retailers post-Brexit, but, says Credit Suisse's Seth Sigman, just because they have limited exposure to Europe doesn't mean they're totally insulated. Previous market shocks had the group underperforming the S&P 500 by 500 basis points.
- Three trends to be mindful of: Troubles in Europe could hit stocks which could hit the U.S. consumer, interest rates will stay lower for longer, and the dollar will remain strong.
- The safest ares are home improvement and auto parts - think Home Depot (HD -1.8%), Lowe's (LOW -1.7%), Tractor Supply (TSCO -0.3%). There's also stocks with specific catalyst or plays into near-term fear - think Advance Auto Parts (AAP -0.5%), Dick's (DKS -3.6%), and Sportsmans Warehouse (SPWH -2.8%).
Tue, Jun. 14, 8:49 AM
- Retail sales topped expectations in May with some categories tipping off a healthy spending trend.
- Nonstore retailers once again led all categories with 12% Y/Y growth. Amazon (NASDAQ:AMZN) had a lot to say with that strong performance.
- Health and personal care stores were also solid with an 8% Y/Y rise in sales. Chains such as Walgreens (NASDAQ:WBA), Rite Aid (NYSE:RAD), Ulta Salon (NASDAQ:ULTA), and Sally Beauty Holdings (NYSE:SBH) continue to draw millennial interest.
- Department stores lagged once again with a 0.9% M/M drop and 6% Y/Y tail-off. A tough month of weather contributed to a 2% M/M drop in the building materials and garden equipment (HD, LOW) category.
- Restaurants performed ahead of expectations, sales were up 0.8% M/M and 6.5% Y/Y. That mark bodes well for McDonald's (NYSE:MCD) continuing its streak of staying in positive territory with comparable-store sales.
- Previously: Retail sales decelerate from April's pace (June 14)
- Retail ETFs: XLY, XRT, VCR, RTH, RETL, FXD, FDIS, RCD, PMR, JHMC, CNDF.
Wed, Jun. 8, 10:35 AM
- BrandZ keeps a pulse on the value of brands with consumers. Does it matter? An index of companies in the BrandZ Strong Brands Portfolio outperformed the S&P 500 by 5X over the last nine years.
- The list of top risers in brand value this year includes Amazon (NASDAQ:AMZN), Starbucks (NASDAQ:SBUX), JD.com (NASDAQ:JD), Home Depot (NYSE:HD), Lowe's' (NYSE:LOW), Costco (NASDAQ:COST), Burger King (NYSE:QSR), MasterCard (NYSE:MA), and Chanel (private).
- Electrek notes that Tesla Motors (NASDAQ:TSLA) bumped Volkswagen out of the top ten in the ranking of automobile brands. Toyota (NYSE:TM), BMW (OTCPK:BAMXY), and Mercedes-Benz (OTCPK:DDAIF) hold down the top three spots.
Mon, Jun. 6, 1:21 PM
- Morgan Stanley analyst Simeon Gutman calls Lowe's (LOW -2%) one of the firm's top investment ideas (Overweight rating, $87 PT) after sitting down with the home improvement retailer's management last week. Snippets from the analyst's note are below.
- Industry snapshot: "The US housing stock is aging (33 years) while affordability has never been better. We estimate there is a $12-15 billion sales opportunity as industry demand normalizes. This does not include any upside potential from Sears, which continues to cede market share (~13% of HI market)." Upside with Pro: "Newly launched professional brands along with a pro only website and more targeted services are helping drive gains with the Pro. There was a step change in pro sales momentum in Q1, a clear signal that this strategy is resonating."
- Margin watch: "Incremental margins are around 25% and we see a pathway for them to climb to 30%. There is heightened internal focus on reducing indirect costs such as store fixtures, telecom, and utilities. There is also a medium to longer-term cost focus as LOW looks to centralize various corporate and store level functions."
- Shares of Lowe's have outperformed Home Depot this year (+3.1% vs. -2.5%). The company also achieved the rare feat of outcomping its rival last quarter.
Tue, May 31, 9:11 AM
- Consumer spending on durable goods rose 2.3% in April, while spending on nondurable goods increased 1.4%. Both marks exceeded the expectations of economists. Overall consumer spending rose at the fastest rate in seven years.with a 1.0% M/M increase.
- While a higher level of spending on automobiles was anticipated, a category to keep an eye on is home furnishings and home repair with more data out suggesting that millennials are freeing up dollars for their houses.
- Related stocks: BSET, CRWS, ETH, HOFT, LZB, LCUT, NWL, SCSS, STLY, TPX, TUP, BGG, SWK, HD, LOW.
- Previously: Retailers with a fix on the modern U.S. consumer (May 28)
- Previously: Personal income rises in-line with forecast (May 31)
Fri, May 20, 8:34 AM
- Lowe's (NYSE:LOW) announces that it completed the acquisition of Rona.
- The highly-watched deal adds 539 stores in Canada to Lowe's overall store count and pro-forma revenue of about C$6B ($4.58B US).
- Rona will keep its retail store banners and have a headquarters in Quebec.
- The home improvement market in Canada has grown at a steady rate over the last few years.
- Now read Lowe's: Surprisingly Good Q1 Results which includes some analysis of the Rona deal.