Industry: Overall, our Aggregate Visits Dataset decelerated this week on a continued Easter shift impact and tougher compares. 5Wk Trend also slowed, but it still directionally positive since the beginning of 2024. Redbook Comp Sales also took a hit this week, but the overall positive trend is still strong. At the same time, we got our first weak tax refund week in since February, with the YY weekly refunded amount declining -2% (vs +49% the week prior). We still think refunds are creating some near term excess spending capacity for US consumers, but this will not last forever – which is notable given compares on a 1-year basis start getting tougher in May.
- Notable Industry Callouts: Various accelerations and decelerations caused by Easter shift impact.
Recent Black Books Links:
- Retail 2Q 2024 Themes
- BYON | Beyond | Best Idea Long | The Path to a $100+ Stock
- FND | Floor & Decor | Best Idea Short | Unit Economics Deep Dive (Highly Recommend - RW)
Company Callouts:
- Auto Parts: AutoZone (AZO), O’Reilly Auto Parts (ORLY), Advance Auto Parts (AAP) | GPC Earnings—NAPA Auto Parts Accelerates. GPC reported Q1 EPS of $2.22 vs the Street expectation of $2.17 on a revenue miss of $5.78B vs $5.84B. Automotive Parts revenue also came in below the street at $3.57B vs $3.62B, but EBIT was ahead at $273mm vs $264mm. On a RoC basis, Automotive comps saw a sequential acceleration from -2.7% YY in 4Q 23 to +0.2% YY in 1Q 24. Auto parts demand overall improving on the margin with a long-term secular tailwind at play. We still have ORLY and AZO on our Long Bias list. Visits across all of the banners look very similar to each other, with a directionally positive trend since the start of 2024. Moving forward, these retailers have to comp against LSD YY changes in visits throughout the summer, until visits ease from late September into the winter. We still like this space long term, in part due to the ageing US vehicle fleet—meaning increased vehicle maintenance—and it looks like from a visits perspective the category could continue to be a winner throughout the year. Given improvements in the company specific data we will look to get more positive on the names moving forward. Long ORLY & AZO.
Chart List:
- Industry
- Companies
Source: Placer.ai
