Feb. 26, 2014, 5:30 PM| 1 Comment
Feb. 26, 2014, 2:44 PM
- Three Senate Democrats have broken away from Majority Leader Harry Reid's $10.10/hour line in the sand on minimum wage legislation.
- Mary Landrieu of Louisiana, Mark Pryor of Arkansas, and Mark Warner of Virginia have all tipped off that they think there could be some room to negotiate over the amount of an increase over the current federal minimum wage of $7.25/hour. The GOP likes the status quo, but is viewed as likely to give some ground in an election year.
- Federal minimum wage legislation could create higher costs in the retail and restaurants sectors as companies adjust to the new higher floor.
- Last week, Gap made a preemptive move to raise its own hourly wage in a development that stirred the pot a little bit.
- Related stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, CEC, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN, AEO, ANF, ARO, BBBY, BJ, CHS, COST, DG, DLTR, GPS, HD, JCP, JWN, KR, KSS, LOW, LB, NDN, ODP, PIR, PLCE, RSH, SPLS, SWY, TGT, TJX, URBN, WMT.
Feb. 25, 2014, 10:25 AM
- Investors are giving Macy's (M +3.9%) a pass after January sales came in soft and the company warned on a sluggish early start to the current quarter.
- The enthusiasm on the retailer appears to stem from its ability to hold up margins through its omnichannel approach to selling.
- Macy's also reiterated its guidance for the fiscal year despite the slow start.
- The department store sector is mounting a little comeback today after it was awash in red yesterday.
- Gainers: Kohl's (KSS) +1.8%, Nordstrom +0.8%, Dillard's (DDS) +4.6%, Sears Holdings (SHLD) +3.3%, Bon-Ton Stores (BONT) +2.6%.
Feb. 19, 2014, 8:18 AM| Comment!
Feb. 6, 2014, 2:07 PM
- Kohl's (KSS +3.9%) is higher on the day despite reporting sluggish sales and cutting guidance.
- The department store operator continues to get stung by problems with its e-commerce business which has added costs.
- Today's rally is a little bit about expectations being even worse for the period, say analysts.
Jan. 22, 2014, 1:38 PM
- Overall retail space could be reduced by between one-third to one-half over the next ten years, forecasts industry watcher Michael Burden.
- The harsh assessment could indicate the round of store closings from Sears Holdings (SHLD), J.C. Penney (JCP), and Macy's (M) is only the tip of the iceberg. Watch for American Eagle Outfitters (AEO), Aeropostale (ARO), Dillard's (DDS), Nordstrom (JWN), and Kohl's (KSS) to enact some logical downsizing, while even Wal-Mart (WMT) and Best Buy (BBY) could surprise with some paring.
- Analysts think stores at malls will be shuttered faster than open air outlets.
- What to watch: Vibrant brands such as Michael Kors (KORS), Lululemon (LULU), and Vince (VNCE) could shift into a standalone mode as consumer demand stays strong for their on-trend products, but mall metrics trend weaker.
Jan. 9, 2014, 7:32 AM
- Retail warnings are starting to pour in as more companies report on comparable-store sales.
- Cato and Buckle both saw their December comps fall, due in part to tough weather, while L Brands had to push hard on promotional levers to stay in positive territory.
- The common theme from the holiday season has been that mall-based retailers used promotions and e-commerce channels to try to make up for very slow store traffic. While Macy's is ahead of the game with a vibrant online fulfillment system and cost-cutting plan in place, other department store operators (KSS, SHLD, JCP, DDS, JWN) could be at risk.
Jan. 6, 2014, 8:58 AM
- Winter storms which dumped over ten inches of snow in a large number of U.S. cities (Boston, Chicago, Detroit, St. Louis, NYC region) has wreaked havoc on mall traffic, according to retail watchers.
- In some major cities, malls were completely closed down due to the extreme snow.
- The extended bout of wintry weather hit right as the sector was looking for a bounce from post-holiday deal shoppers and gift card conversions.
- Analysts think most of the anticipated sales will be recouped, although a lag factor could in play. Apparel sellers could be the hardest hit as inventory starts to look stale.
- On watch: AEO, ANF, ARO, JCP, JWN, KSS, URBN, APP, TLYS, GES, BKE, CHS, ASNA, CWTR, ANN, CBK, NWY, CACH, BODY, WTSL, CATO, BEBE, DDS, LB, PSUN, EXPR, DDS, M, GPS, SHLD.
- Related ETFs: XLY, VCR, FXD, FDIS, RCD, PEZ, PSCD
Jan. 2, 2014, 12:29 PM
- Fresh data from IBM Digital Analytics Benchmark could give some hope that the holiday season wasn't quite as bad for department stores as reads on store traffic would suggest.
- Online sales for the group rose 62.8% Y/Y in Q4 and mobile sales gained 38%, according to the research firm.
- The contribution of online/mobile to total sales varies widely in the group.
- Department store chains: Macy's (M), Nordstrom (JWN), Kohl's (KSS), Dillard's (DDS), J.C. Penney (JCP), Sears Holdings (SHLD), The Bon-Ton Stores (BONT), Stage Stores (SSI), Ross Stores (ROST).
Dec. 31, 2013, 1:07 PM
- Gift cards are a bigger part of the earnings matrix for retailers this year with usage rising to 23.7% of all holiday spending.
- Companies which have their fiscal quarter end in January stand a better chance of realizing gift card sales along with holiday sales, while those with a December 31 ending date could see sales slip into the next period.
- The volume of gift card sales can also factor in to how promotional firms decide to become during the post-Christmas season.
- Previous: Gift card sales data, Starbucks' cash cow.
- Related stocks: BBY, HAWK, AEO, ANF, ARO, BBBY, CHS, GPS, JCP, JWN, KSS, LB, M, URBN, WSM.
Dec. 26, 2013, 3:35 AM
- A last-minute surge in online shopping and bad weather left major retailers such as Amazon (AMZN), Kohl's (KSS) and Wal-Mart (WMT) unable to fulfill guarantees to deliver packages in time for Christmas. IBM estimates that Internet sales jumped 37% on year over the pre-Christmas weekend.
- UPS (UPS) was particularly caught out. "The volume of air packages in the UPS system did exceed capacity as demand was much greater than our forecast," a UPS spokeswoman said. FedEx (FDX) was also affected, although the company said that it wasn't suffering significant delays.
- Amazon is refunding shipping charges to affected customers and providing a $20 gift card, while Kohl's will pay the full cost of all goods that arrive late.
Dec. 23, 2013, 9:03 AM
- Warnings on slow store traffic at retailers are being heard far and wide from analysts as more channel checks disappoint.
- Ground zero for promotional activity in the sector appears to be mall-based apparel sellers which are throwing "shocking" deals at consumers to stoke sales and clear inventory.
- Weather has been a factor, but forward-looking insiders also see a paradigm shift. Consumers enabled with mobile devices have taken a hatchet to the amount of their holiday season impulse buying which typically helps retailers drive margins higher on select items at stores.
- On watch: AEO, ANF, ARO, JCP, JWN, KSS, URBN, APP, TLYS, GES, BKE, CHS, ASNA, CWTR, ANN, CBK, NWY, CACH, BODY, WTSL, CATO, BEBE, DDS, LB, PSUN, EXPR.
Dec. 5, 2013, 10:35 AM
- Kohl's (KSS +0.8%) shares tick up after BofAML upgrades shares to Buy from Neutral.
- Others aren't as convinced by the retailer's prospects, musing whether its 100-hour stay-open move smacks of "desperation." Hedgeeye's Brian McCough is of that mindset, speculating "Only one reason [Kohl's] opens 24/7 for 5 days. It's simply sitting on too much inventory."
- Kohl's was hurt during the holidays last year due to a "huge excess of inventory" (CFO Wesley McDonald's words). Inventory fell 1% Y/Y on a per-store basis in Oct., but inventory turn was also slower, management noted on the last conference call.
Dec. 5, 2013, 9:13 AM
- Kohl's (KSS) says it will keep its stores open around the clock from December 20 to 6:00 p.m. on Christmas Eve in a 100-hour effort to boost traffic and sales.
- The big picture: Despite the frenzied competition amongst retail chains to have their stores open earlier and longer, analysts aren't convinced the companies are getting the bang for the bucks they are pouring into employee overtime hours and maintenance costs. Bespoke asks if the measure smacks of desperation?
Dec. 4, 2013, 7:12 AM
- The inventory levels of apparel retailers in the U.S. stand at alarming levels, according to Nomura Equity Research.
- By most accounts, the group didn't perform well over the Black Friday weekend after entering the holiday shopping season at high inventory levels.
- Retailers such as Macy's (M) and Gap (GPS) may have an edge with their strong online fulfillment programs, but the early starts to the shopping season exacerbate inventory issues. Some retail chains will start selling spring lines in late December forcing a more promotional stance on older items.
- On watch: AEO, ANF, ARO, JCP, JWN, KSS, URBN, LTD, APP, TLYS, GES, BKE, CHS, ASNA, CWTR, ANN, CBK, NWY, CACH, BODY, WTSL, CATO, BEBE, DDS.
Nov. 26, 2013, 4:57 AM
- Consumers who think they'll be getting huge discounts on Black Friday might want to think again. In the words of the WSJ's Suzanne Kapner, "those bargains will be a carefully engineered illusion."
- Retailers and suppliers first work out the lowest price they can sell a product at and still make the profit they want, and then they jack up the "suggested retail price" so that the retailer can later offer a big discount.
- Another tactic is for stores to raise selling prices just before the holiday season discount period kicks in.
- Retailers: WMT, JCP, M, SHLD, JOSB, MW, KSS, BBY, TGT, HD
- ETFs: XLY, XRT, VCR, RTH, RETL, PEJ, IYK, FXD, PMR, UGE, RCD, SZK, PSCD, FDIS, PEZ
KSS vs. ETF Alternatives
Kohl's Corp operates department stores that sell moderately priced exclusive and national brand apparel, footwear, accessories, beauty and home products. Itswebsite includes merchandise available in stores, and merchandise available only on-line.
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