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Thu, Feb. 4, 10:13 AM
- Trucking stocks are in rally mode off a mix of macroeconomic news and earnings.
- Notable gainers include ArcBest (ARCB +11.7%), Old Dominion Freight Line (ODFL +4.2%), Heartland Express (HTLD +4%), Celadon Group (CGI +8.4%), YRC Worldwide (YRCW +7.7%), Knight Transportation (KNX +2.2%), and Marten Transport (MRTN +4.1%).
- It's a moonshot for Roadrunner Transportation Systems (RRTS +37.5%) after earnings.
- Shipping companies FedEx (FDX +2.6%), AirT (AIRT +3.9%), and UPS (UPS +0.8%) are also well-ahead of broad market averages.
Tue, Feb. 2, 8:38 AM
- UPS (NYSE:UPS) reports revenue rose 2.4% on a currency-neutral basis in Q4.
- Total company shipments were up 1.8% to 1.3B packages.
- Segment revenue: U.S. Domestic Package: $10.27B (+2.6%); International Package: $3.18B (-7.3%); Supply Chain & Freight: $2.61B (+6%).
- Average revenue per piece: U.S. Next Day Air: $18.74 (-6.9%); U.S. Deferred: 11.30 (-6.8%); U.S. Ground: $7.64 (+1.5%); International: $16.37 (-6%).
- Compensation and benefits expenses decreased 7.4% to $8.504B.
- Adjusted operating margin rate grew 180 bps to 13.5%.
- FY2016 Guidance: DIluted EPS: $5.70 to $5.90 (+5% to +9%).
- UPS +2.68% premarket.
Tue, Feb. 2, 7:48 AM
Mon, Feb. 1, 5:30 PM
Fri, Jan. 29, 2:20 PM
- The long-term thesis on FedEx (FDX +3.4%) and UPS (UPS +2%) may be slightly altered after Amazon reclassified itself in its latest SEC filing (tipped by Baird).
- For the first time, Amazon officially described itself as a "Transportation Services Provider."
- Amazon's logistics capabilities build-out is seen as slowly becoming a larger consideration for the shippers.
- Amazon's SEC Form 10-K
Sat, Jan. 9, 10:47 AM
- The success of the retail sector during the holiday season came into focus after a number of chains issued their holiday sales reports last week and research firms weighed in with data-driven analysis.
- Lesson #1 - Early and late: 25% of all shoppers purchased a Christmas present before Halloween, while the Black Friday to Cyber Monday period disappointed. A late flurry of shopping was a boon for many large retail chains, as well as Amazon (NASDAQ:AMZN), FedEx (NYSE:FDX), and UPS (NYSE:UPS). Trading around anecdotal reports of Black Friday traffic now looks like an exercise in futility.
- Lesson #2 - Women over men: Sales of women's apparel were strong during the two-month period, up 10%, while demand for men's apparel tailed off significantly. A microcosm of the trend is the +8% comp reported by L Brands (NYSE:LB) - while The Men's Wearhouse (NYSE:MW) is in a -72% 3-month funk. The disastrous performance in the electronics category (BBY, CONN, HGG) reinforces the trend.
- Lesson #3 - The sweet spot of retail was in the middle: Luxury sellers (COH, KORS, RL, TIF) had a weak holiday season as F/X challenges and lackluster Asian tourism factored in, while discounters also were scrambling due to a high level of promotional activity. The $2-gas benefit seemed to help in the middle where Costco (NASDAQ:COST), Target (NYSE:TGT), Ross Stores (NASDAQ:ROST), TJX Companies (NYSE:TJX), and The Children's Place (NASDAQ:PLCE) set up shop.
- Lesson #4 - No slowdown in online : Holiday online sales rose 20% Y/Y. Brands such as Ulta Salon (NASDAQ:ULTA) and Victoria's Secret that sell easily through e-commerce channels are well-positioned to benefit from the trend, although for a large part of the apparel sector the e-commerce mix is a margin cruncher. Just ask Gap (NYSE:GPS), Urban Outfitters (NASDAQ:URBN), and American Eagle Outfitters (NYSE:AEO).
- Sources: Planalytics.com, Chain Store Age, company holiday sales reports
Dec. 29, 2015, 3:21 AM
- It's not only severe weather that hit FedEx (NYSE:FDX) before Christmas. The shipping company is also attributing its delivery failures to volumes that "far exceeded all previous records."
- "An unprecedented surge of last-minute e-commerce shipments" flooded in ahead of the holiday, FedEx said in a statement,
- "UPS completed its deliveries on Christmas Eve, and customer feedback suggests everything was delivered on time," spokesman Glenn Zaccara said by e-mail.
- Whatever the case may be, both stocks are down year-to-date: FDX -14.5%; UPS -12.8%.
- Previously: FedEx lower after late shipments raise concerns (Dec. 28 2015)
- Previously: FedEx plans Christmas deliveries after delays (Dec. 25 2015)
Dec. 25, 2015, 2:38 AM
- FedEx (NYSE:FDX) plans to run Christmas Day deliveries in some markets to help complete shipments after severe weather interrupted services in the run-up to the holiday.
- The company's major air hub is located in Memphis, an area affected by the storms.
- Counters at FedEx Express stations nationwide will also be open Friday morning so customers can pick up their shipments.
- How about rival UPS? "Everything was processed overnight and we expect to maintain current on-time performance," said company spokesman Dan Cardillo. "We will be working into the evening tonight to get everything to customers."
Dec. 24, 2015, 7:29 AM
- Traffic at physical stores fell 10.4% last weekend, according to RetailNext, while sales fell 6.7%. That's worse than the 8% drop in traffic and 5.8% decline in sales recorded from Nov. 10 through Dec. 14.
- Source: WSJ
- At least there's last minute shopping, but online retailing is making fast gains there as well. Naturally, this is testing the limits of delivery services, with chains including Eddie Bauer and Pacific Sunwear (NASDAQ:PSUN) warning customers of delays, noting broader issues at FedEx (NYSE:FDX).
- FedEx is running 24/7 to “accommodate additional unforeseen volume from some customers,” but says its delivery network is performing as expected. UPS says it's running about 98% on time.
- All this is pushing traditional retailers into deeper promotions, and to keep their stores open for even longer stretches leading up to Christmas Eve. Kohl's (NYSE:KSS) opened at 7 AM on Dec. 17 and won't close until more than 170 hours later at 6 PM ET tonight. At Gap's (NYSE:GPS) Old Navy, the entire store is up to 75% off through Dec. 28, Macy's (NYSE:M) is offering "after Christmas prices now," and Abercrombie & Fitch (NYSE:ANF) is discounting the entire store by 40-60%.
- Online retailers, on the other hand, "aren't playing the big promotion game as much," according to PwC.
Dec. 23, 2015, 5:41 PM
- A few retailers are warning customers that their holiday packages are being delayed and blaming what they say are broader problems at FedEx (NYSE:FDX), according to a WSJ report.
- Officials at Eddie Bauer and Pacific Sunwear (NASDAQ:PSUN) have said this week that FDX is experiencing a backlog that is "delaying standard shipments by several days or even weeks, [and] all online merchants are affected."
- Other retailers, including Wal-Mart (NYSE:WMT), say their orders are shipping normally.
- FDX says it is running operations around the clock to "accommodate additional unforeseen volume from some customers," but that its delivery network is “performing as designed for the forecasted volumes from our major retail and e-tail customers."
- Industry consultants who work with retailers tell WSJ that the networks of both FDX and rival UPS appeared to be at capacity this week, and the companies were enforcing volume limits on some retailers.
Dec. 11, 2015, 1:47 PM
- The pickup in the pace of U.S. retail sales growth during November was a good sign for the retail sector, but a data read on shippers UPS (NYSE:UPS) and FedEx (NYSE:FDX) could be cause for some concern.
- On-time delivery rates for both UPS and FedEx are markedly lower than last year, despite the lack of wintry weather. The high level of shipping activity could be an indication that a higher percentage of holiday sales are going through e-commerce channels - a trend that benefits some companies more than others.
- Previously: Core retail sales top expectations (Dec. 11)
- Previously: Retail sales pick up momentum despite underwhelming Black Friday (Dec. 11)
Dec. 9, 2015, 9:06 AM
- The extended forecast from the National Weather Service for the U.S. shows the warm weather trend continuing for a large portion of the nation.
- The warm snap already impacted some categories in the retail sector around the Black Friday to Cyber Monday period, but now threatens to dampen or push out later on the calendar sales for certain items.
- The weather excuse is a frequent topic on Q4 earnings conference calls.
- The flip side of the U.S. weather issue is the performance of FedEx (NYSE:FDX) and UPS (NYSE:UPS). The shippers benefit on the expense side from calm weather in high population areas during the holiday period.
- Snow cover map of the U.S.
- Weather-watching: DKS, ACAT, HIBB, DKS, CRI, DECK, LE, COLM, ARO, AEO, ANF, TGT, UA, FL, FINL.
Dec. 2, 2015, 12:17 PM
- Transportation stocks are lower on the day on some broad macroeconomic concerns. Some BAML downgrades in the sector are also weighing on sentiment.
- Trading is notably weak in CXS Corp (CSX -2.3%), American Railcar Industries (ARII -2.6%), Kansas City Southern (KSU -1.9%), YRC Worldwide (YRCW -5.7%), Heartland Express (HTLD -3.7%), Swift Transportation (SWFT -3%), FedEx (FDX -0.9%), UPS (UPS -0.5%), Air Transport Services (ATSG -1.7%), and Matson (MATX -2.5%).
- A notable exception to the sector slide is airline stocks which are showing strength after Delta Air Lines (DAL +2.7%) reported some eye-opening capacity constraint. The major carrier increased passenger revenue per available seat mile sand load factor during November. A 3% decline in crude oil prices is also factoring in to the rally in airline stocks.
- United Continental (UAL +3.2%), Hawaiian Holdings (HA +2.9%), Southwest Airlines (LUV +2.3%), and Republic Airways Holdings (RJET +4.4%) are all solidly higher.
- The Dow Jones Transportation Average is down 0.8% off the conflicting forces of gravity.
- Related ETFs: IYT, XTN, JETS.
Nov. 25, 2015, 10:41 AM
- Reports over the coming holiday weekend on Black Friday traffic and estimates arriving early next week on store sales should be largely ignored, observes FiveThirtyEight.com.
- The correlation of total holiday season revenue to the length of lines at stores during Black Friday and the weekend sales tallies in years past has been nearly non-existent. This is due in part to the paradox that a strapped U.S. consumer is more likely to shop on Black Friday than wait until deeper in the season and vice versa.
- Holiday season bellwhethers to trust include any data dumps or notes from management at Amazon (NASDAQ:AMZN), FedEx (NYSE:FDX), UPS (NYSE:UPS), Visa (NYSE:V) or MasterCard (NYSE:MA).
Nov. 13, 2015, 3:27 PM
- United Parcel Service (UPS -1.1%) has priced an offering of €1.2B in senior debt.
- The shipper is offering debt in floating-rate and fixed-rate notes: one tranche of €500M of floating-rate notes due 2020, and one of €700M of 1.625% senior notes due 2025.
- It expects net proceeds of about €1.19B that it intends to use for general purposes, including repaying commercial paper. The offering is expected to close Nov. 20.
- At last report, UPS reported total debt of about $14.6B, with long-term debt to assets of about 30 times.
Nov. 12, 2015, 9:26 AM
- 7-Eleven continues to make a strong push into the growing lockers initiative in e-commerce.
- The company now has lockers for deliveries from FedEx (NYSE:FDX), UPS (NYSE:UPS), Wal-Mart, and Amazon at select locations.
- Other retailers such as Rite Aid and Walgreens have dabbled with the concept before deciding that the lockers took up too much space in their stores. Also, most chains can't match the scale and long store hours of 7-Eleven.
- Locker math: Convenience stores average $600 in sales per square foot which would need to be made up in locker fees and ancillary sales to make lockers a profitable play.
United Parcel Service Inc (UPS) is a package delivery organization less-than-truckload industry & provider of supply chain management solutions. It operates in three segments; U.S. Domestic Package, International Package and Supply Chain & Freight.
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