• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

Takeaway: Sales finally pick up. Adi takes a swing at NKE w new sportswatch. Reebok sucking wind. KSS joins M/JCP on Thanksgiving. Labor costs rise.


TJX - Investor Meeting: Tuesday 10/22 1:30 pm


ICSC - Chain Store Sales Index


Takeaway:  This is the first time in over a month we saw the growth in sales (per ICSC) come in ahead of last year. Not hugely so, but we'll take it.

What's New Today in Retail (10/22) - chart1 10 22

What's New Today in Retail (10/22) - chart2 10 22



JCP - Martha Stewart Revises J.C. Penney Deal


  • "The new agreement essentially reverses the bulk of the Penney’s-MSLO deal. Now it features a more focused range of product categories over a shorter period of time, through June 30, 2017, versus the original deal, which would have expired in 2021."
  • "Neither MSLO nor Penney’s would provide further details of the financial terms of the deal, but they said Penney’s would sell through any unbranded product at issue in the Macy’s case and that it would not manufacture any more."
  • "Under the new deal, MSLO will continue to design Martha Stewart branded products for Penney’s in the following categories: window treatments and hardware, lighting, rugs, holiday and celebrations. These categories were not disputed in the Macy’s lawsuit."
  • "MSLO will receive design fees, guaranteed minimum royalties and the 11 million shares of MSLO Class A common stock that Penney’s currently owns. Additionally, Penney’s will no longer have representation on MSLO’s board. Penney’s paid $38.5 million for the MSLO shares."

Takeaway: This is a CYA move for MSLO. Judge Oing was going to squash the JCP arrangement if nobody got off their tail and proactively found a solution on their own. This solution is actually an upgrade for JCP, as we had previously assumed that its Martha product went to zero.

ADS - Adidas Creates New U.S. Model, Becker Exits Reebok


  • "Patrik Nilsson, currently head of Adidas North America, will head up a joint group that covers Adidas North America and Reebok. He also will take on global responsibility for the Reebok-CCM Hockey brand." 
  • "Uli Becker, president of Reebok North America, has decided to leave the company. The changes are effective immediately."

Takeaway: Translation = Reebok is still sucking wind, and it needs to be 're-German-engineered'.

ADS - Adidas Arms Up for Smartwatch Wars


  • "The Adidas watch will retail for $399 when it becomes available on Nov. 1. It includes GPS tracking technology, wrist-based heart monitoring, a Bluetooth-enabled music player, and use of Adidas’ live coaching service, miCoach."
  • "Mr. Gaudio said the watch was developed for runners who don’t like the idea of bringing along their phone on runs, and who use that time to disconnect. Two key features of the watch are, in fact, components it doesn’t have: Unlike gadgets offered by Samsung and Nike which work in conjunction with smartphones, the miCoach Smart Run functions as a standalone product. Further, its heart rate monitoring is conducted on the wrist, eliminating the need for a traditional separate chest strap."

What's New Today in Retail (10/22) - chart3 10 22

Takeaway: Nike currently has its Nike+ Sportswatch that it built 2-years ago in conjunction with TomTom. It has GPS, tracks cadence, laps, splits and has a solid alarm. All of that said, this Adidas watch appears to blow it out of the water. That said, Nike's sells for $169, and Adidas is $399.  On a relative value basis, Nike still might come out ahead.  Either way, expect NKE to up the ante on its product to beat Adidas -- and it will likely do so at the same sub $200 price.

TJX - TJX to Boost Store Outlook


  • "The off-price giant boosted its earnings outlook and said it would raise its estimates for long-term store growth at an investor meeting Tuesday."
  • "TJX said its sales and profit margins so far this quarter were strong and raised its adjusted earnings estimates to 73 cents to 74 cents a diluted share — up from the 69 cents to 72 cents projected this summer. Comparable-store sales are slated to rise 4 percent."
  • "For the full year, TJX is now projecting adjusted earnings of $2.78 to $2.82 a diluted share, up from an adjusted $2.47 in 2012."

Takeaway: Nice, but nothing that people were not expecting ahead of the company's analyst meeting -- which is being held today.

KSS - Kohl’s to open 8 p.m. Thanksgiving; digital efforts include Santa photo op


  • "...Kohl’s Department Stores announced it will open its doors at 8 p.m. on Thanksgiving Day,  kicking off its Black Friday event earlier than ever."
  • "Stores will be open for 28 hours straight – from 8 p.m. Thursday, Nov. 28 through midnight Friday nationwide."
  • "The retailer is also offering a digital variation on the photos with Santa tradition.  Starting in November, shoppers can skip the long lines to visit Santa at the mall by taking a photo at Kohl’s Snapshots with Santa in-store photo opportunity in Kohl’s stores nationwide."

Takeaway: KSS matches store hours at Macy's -- a day after JC Penney did the same. We still think this is a risky move. The number of people that will shop on Thanksgiving is unknown, and the costs of manning the stores will be immense (late night and on a holiday equals double time at least).

KER - Kering ready to inject 300 mln eur in La Redoute


  • "...Kering is ready to inject at least 300 million euros ($411 million) into its La Redoute unit as part of efforts to find a buyer for the loss-making mail order business, two sources close to the matter said."
  • "Three potential purchasers have requested further information about La Redoute, though Kering has not yet received any firm offer, the sources told Reuters on condition of anonymity."
  • "La Redoute is the last of Kering's retail businesses, which it has been shedding to focus on luxury goods and sportswear. Its exit from the retail industry began with the disposal of department store Printemps in 2006."


Bangladesh Minimum Wage Dispute Finally Nears Resolution


  • "After repeatedly halted negotiations, workers and factory owners in Bangladesh seem to be finally arriving at a negotiated compromise over wages. It looks like the minimum wage will be set at Tk 5,000 per month, significantly lower than the workers’ original demand for Tk 8,114 but much better than the owners’ first offer at Tk 3,600."

Takeaway: This is a win for labor, and a loss for everyone else. Someone's going to have to pay for the increased cost -- either manufacturers, brands, retailers, or consumers. Manufacturers will bear at least half. The remainder will be split by brands and retailers. Consumers won't see a penny.

Swiss Watch Exports Rise 8.5%


  • "Swiss watch exports rose 8.5 percent in September, their highest monthly increase since January, helped by favorable calendar and base effects, the Federation of the Swiss Watch Industry reported."
  • "Foreign sales of Swiss timepieces totaled 1.9 billion Swiss francs, or $2.06 billion at average exchange rates for the period…"
  • "While China continued to lose ground with a decline of 3 percent, Hong Kong and the United States confirmed recent signs of recovery with increases of 10 percent and 17.4 percent respectively. Germany posted a rise of 8.7 percent and Japan was up 9.2 percent, but Italy recorded a 1.4 percent decrease."