- 1) First, the bad news. Anything remotely resembling strength in the brand is coming at the family footwear channel - hardly a sign of regaining traction with real brand influencers. In addition, with the initial push into more fashion-forward product almost a year ago having fallen flat on its face, our read is that TBL has pulled the good 'ol retail one-eighty. It went from experimental fashion to ultra safe basic product. In that context, TBL is not taking up any prices (because it lacks brand strength to do so) despite higher input costs. There's very little to get excited about here.
- 2) But here's what piques our interest. A) Our read from retail is that inventories are very clean. B) While average selling prices for TBL's boot business is down per NPD, the trend is hitting higher lows. C) Market share is still off, but at a materially lower rate than in at least 8 quarters. D) Surprisingly, the strongest channel aside from the family retailers is the department stores. A brand performing well there has got to be doing something right.
- 3) Gross margins are still under pressure - which is no secret. But what's misunderstood is that TBL's gross margin pressure for the past 3 years has been magnified by a factor of 4 on the EBIT line. In other words, SG&A investment went up instead of down when things got tough, and TBL took it on the chin when it could have otherwise cut muscle to print a better number. We like TBL's course of action. That's a big lever to pull when things get tough. TBL is starting to pull it.
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This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”read more
7 Tweets Summing Up What You Need to Know About Today's GDP Report
"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.read more
GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist
“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.read more
Inside the Atlanta Fed's Flawed GDP Tracker
"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.read more
People's Bank of China Spins China’s Bad-Loan Data
PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.read more
UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'
“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."read more
Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)
"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.read more
An Update on Defense Spending by Lt. Gen Emo Gardner
"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.read more