Industry: Aggregate visits slightly accelerated from -7.3% to -6.9% this week, while the 5Wk Avg continued its descent from -6.6% to -6.9%. At the same time, Redbook Retail Sales saw another slight uptick in comparable store sales from +3.5% YY to +4.0% YY (though saw a strong deceleration in the 2Yr Avg from +7.9% to +6.2%), but the overall counterintuitive trend of declining visits and stable to rising comp store sales remains.
- Notable Industry Callouts: The major Beauty & Spa acceleration that we saw last week was slashed this week with a major deceleration from +9.3% to +2.0%. Visits across the space, following a period of relative outperformance, have plenty more room to fall. Best Idea Short ULTA & SBH. Other industries across retail were not as volatile, but still saw decent accelerations and decelerations. Key ones to watch are Home Improvement, which accelerated from -13.9% to -12.3% (Best Idea Short LOW, HD, & FND), Department Stores, which decelerated from -14.0% to -15.9% (Best Idea Short JWN, Short Bias M), and Car Shops & Services, which saw a deceleration from -1.3% to -2.3% (Best Idea Short MNRO, and Long VVV/DRVN).
Companies: Numbers below = YoY Rate of Change from week to week
- Notable Accelerations: Allbirds +25%, Vince +11%, Guess Factory Store +10%
- Notable Decelerations: MarineMax -29%, Lovesac -26%, Vera Bradley -21%, Burberry -19%, West Elm -16%, Athleta -16%, Haverty’s -15%, Tiffany & Co. -15%, Fix Auto -14%, Anthropologie -14%, Buckle -13%, J.Jill -13%, Kay Jewelers -11%, Ollie’s Bargain Market -9%
Recent Winners & Losers:
- Loser: Ollie’s Bargain Outlet. OLLI saw a major ROC slowdown this week with visits falling from +7.9% last week to -1.1% this week. This is the first time that visits are negative at the discount retailer since April of 2023 given its relative outperformance throughout the year. Even with its strong visit trends, though, things have taken a turn for the worse since July with visits peaking at +18% YY. While we do not currently have a call on the stock, the major deceleration in traffic over the past few weeks is intriguing given how well the stock has performed this year. We're looking for the appropriate entry point to short this name...perhaps we're getting closer.
- Loser: Lovesac. “Whack the Sac” is still the play as YY visits at Best Idea Short LOVE continue to degrade on a ROC basis from +60.4% last week to +34.0% this week and the stock makes lower lows (despite the recent bounce).
- Loser: Ulta Beauty. Visits at Best Idea Short ULTA continue to weaken after the short-term jump due to its 21 Days of Beauty Sale and fall stock up event that occurred over the past two weeks. We continue to expect demand at ULTA (and across the space) to slow and margins to degrade significantly, especially if the company continues to offer additional items at a discount. After a very strong past two years of growth and margin expansion, Beauty is staring down the barrel of tough comps and high expectations. Best Idea Short ULTA and SBH.
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Source: Placer.ai
