Industry: Aggregate YY Visits returned to the decelerating trend with a decline from -6.7% YY last week to -6.9% this week, with the 5Wk Avg trend continuing its straight-line down from -5.7% to -6.4%. Visits across brick & mortar retail remain staunchly negative and we have not yet seen the impact of student loan repayments returning nor the numerous consumer headwinds expected in #Shocktober. As we have highlighted over the past few months, there is still plenty more room for visits to fall in the coming weeks and months given what we are seeing across the macroeconomic environment.
- Notable Industry Callouts: This was another unique week in the retail industry as we saw multiple strong accelerations and decelerations across our data—with little stability in individual subsector visits. Beauty & Spa saw a massive acceleration from +5.2% to +10.3% YY after a two-month decelerating trend between August and September. Although Beauty & Spa has outperformed retail in aggregate since the beginning of the declining visits trends across retail, it is interesting to see the near-term acceleration in the data given the major declines seen in other subsectors. However, Beauty & Spa does act more like a staple—remaining stable across consumer downtrends—despite its seemingly inherent discretionary nature. We remain short Beauty with Best Idea Short ULTA & SBH. Home Improvement returned to its decelerating trend as visits fell from -11.5% to -13.2% YY. Contrary to Beauty, Home Improvement does act like a typical discretionary industry, though, as consumers are more willing to put off big ticket purchases and home upgrades than their essential beauty products when discretionary spending ability tightens. Best Idea Short LOW, HD, & FND. Superstores continued its major decline this week as visits fell again from -6.4% to -7.2%, with the 5Wk Avg declining from -4.6% to -5.7%. Short Bias TGT.
Companies: Numbers below = YoY Rate of Change from week to week
- Notable Accelerations: MarineMax +24%, Kay Jewelers Outlet +20%, Vera Bradley +20%, Bath & Body Works +17%, Lovesac+17%, Athleta +17%, Kay Jewelers +13%, Meineke Car Care Center +10%
- Notable Decelerations: Once Upon a Child -12%, J. Crew -11%, The North Face Outlet -11%, Big Lots -11%
Recent Winners & Losers: Mostly Losers (no surprises there)
- Loser: Home Improvement – LOW, HD, FND. To back the above data on Home Improvement, we are highlighting the big players in the space… Best Idea Short LOW saw a deceleration from -15.7% YY to -16.7% this week and continued to trend negatively on the 5Wk Avg from -14.3% to -14.9%. Likewise, Best Idea Short HD continued its descent from -11.1% to -13.3% YY with the 5Wk Avg falling from -10.2% to -11.0%. Lastly, contrary to LOW & HD, Best Idea Short FND has seen a recent acceleration in its visits trend as visits accelerated again this week from -10.4% to -8.5%, however, visits remain squarely negative. As we continue to callout, the Home Improvement sector is not where you want to be right now. Home turnover remains depressed with falling supply, rates remain elevated, credit is tightening, and the consumer wallet will be squeezed more by student loan payments and accelerating inflation in energy/necessities. We think the bulls are far underappreciating the comp risk here over the next 12 months. Best Idea Short LOW, HD, & FND.
- Loser: Tractor Supply Co. After a period of relatively steady performance, visits at TSCO are on a notable downward trend since the beginning of July. This week, visits saw a massive deceleration from -4.9% to -9.7%, with the 5Wk avg declining from -4.8% to -5.7%. While we do not have a call on the name, TSCO is a company that is also exposed to the Home Improvement subsector which we are bearish on as a whole.
- Loser: Academy Sports + Outdoor. Although it was recently punted off the Short Bias List, we want to highlight that ASO visit trends look like absolute death over the past few weeks. This week, visits decelerated again from -16.8% to -22.6%, while the 5Wk avg continued to fall from -14.3% to -16.2%. Furthermore, compared to 5 weeks ago, visits are sitting -11% lower this week on a rate of change basis. Not the greatest look for a company that is supposed to be a unit grower.
- Winner: Vuori. Visits at Vuori are always extremely choppy given the relative newness of the brand and its low store count, but overall visits continue to be strong. This week, visits accelerated from +95.8% to +167.4%, with the 5Wk avg improving from +112.3% to +121.4%. Although Vuori is still a private company, rumors of a potential 2024 IPO are swirling. Given Birkenstocks IPO next week, lets see if Vuori follows suit in going public when the brand and presumably its P&L are hot.
Charts:
- Industry
- Companies
Source: Placer.ai
