Takeaway: AMZN now taxing 50% of biz. NKE gears new NTC App for women. 10%+ labor cost boost. WMT Donkey-gate. Good COLM China deal. F21 FW ASP +100%.
AMZN - Amazon Now Charging Sales Tax in Indiana, Nevada, and Tennessee
Takeaway: No surprises here…We've had visibility into this issue for quite some time. The most surprising factor is that more states have not joined in. If the statement above that AMZN collects tax from half of its customers is true -- and it sounds right to us -- the most interesting fact is that AMZN's business remains on fire despite a narrowed competitive gap vs. brick and mortar retailers.
NKE - Nike Launches Updated N+TC App
Takeaway: This new NTC (which we've used already) has some notable enhancements. We can't call them 'improvements' because that would suggest that the previous iteration was lacking -- which it wasn’t. The biggest takeaway is that the workouts are almost entirely geared towards women. That's not to say that dudes can't do the workouts (that statement was an attempted face-saver for me), but almost all of the digital instructors are women. Last time Nike led with Allyson Felix (Olympic Gold Medal sprinter) and Manny Pacquiao (Filipino Boxer/National Hero). This time, its Serena, Sharapova, and a host of (extremely fit) women we've never seen before. Our sense is that all the data Nike collected over the years from NTC users allowed it to fine-tune its app and focus on a more commercial audience -- women. Separately, most people don't know this, but many Nike retail stores host NTC classes in the stores -- much like how LULU clears the floor to host yoga class, Nike does it for circuit training.
WMT - Wal-Mart Adds DNA Tests in China After Donkey-Meat Recall
Takeaway: We're usually good for a comment on just about any topic. This one, however, leaves us without words.
M, JCP, MSO - Macy’s and Martha Stewart Living Omnimedia Settle Legal Dispute
Takeaway: The big loser in this whole mess is Martha Stewart. Let's face it, her reputation isn't exactly stellar. And then the goes ahead and inks an exclusive agreement with JCP when she is already locked into one with Macy's? Perhaps blame it on Ackman and Johnson -- but Martha was central to the deal. If you ran a retailer, would you really want to do business with MSO again?
COLM - Columbia Sportswear Company and Swire Resources Announce Commencement of New Joint Venture in China
Takeaway: This is a good deal. Much of the Outerwear market in China is counterfeit/knock off, or just poor quality unbranded product. While COLM already has a presence there, it will now be with a much stronger partner, and one with which it has greater financial interest. Despite the brand's presence in China, the market remains wide-open.
Forever 21 - Forever 21 Expands Footwear Line
Takeaway: This is a big deal. Aside from the fact that whatever Forever 21 does it usually does right, it's noteworthy that price points vs existing products are going up by upwards of 100%. They better get the value proposition right, otherwise the consumer will vote very quickly.
Coupons.com - IPO Prospect Coupons.com to Buy Yub for $30 Million
Takeaway: Ordinarily, we'd dismiss something as minor as this. But the reality is that with the emergence of sites like eBates.com and Coupons.com (and possibly Groupon -- but that's a stretch), we're left with powerful discounting mechanisms online that are still in the early stages of proliferation.
NXT - Next Raises Forecast After Christmas Sales Exceed Hopes
Takeaway: There's a little trend for you…two retailers smoked sales expectations. 1) H&M, and 2) Next. US clothing retailers have got to have 'sales envy'.
BRK - Brooks Signs Nick Symmonds
Takeaway: But can he sell shoes? We can think of a dozen slow runners that can sell more shoes than elite runners. We're not sure with this guy -- but it's a question that should be asked. (If he was really marketable, Nike would have grabbed him).
IBM Digital: Holiday Online Sales Rise 10.3 Percent
2014: Global Sourcing to be More Costly as Worldwide Minimum Wages Continue to Rise
Cambodia Worker Protests Turn Deadly
Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.
After an Oct/Nov bounce off the September disaster, are investors due for a shock?
Takeaway: Please join us on Wednesday, January 8th for a discussion with former STB and ICC Chairman Linda Morgan.
The history of railroad profitability is dominated by regulation and government intervention. Railroads have been regulated because, like utilities, they possess some characteristics of a natural monopoly. With current railroad profitability generally higher than at the start of the Interstate Highway System, will regulators gradually step back in? If hints emerge that the regulatory pendulum might swing back against railroads, it could prove negative for railroad share prices. If not, the favorable industry structure of the railroad industry may allow the continued high levels of profitability investors now expect.
UNP, NSC, CSX, KSU, BRK, CN CN, CP CN, GWR
Please feel free to send question for Linda in advance of the call.
ABOUT LINDA J. MORGAN
Linda Morgan has 35 years of in-depth regulatory and legislative experience in the transportation industry, with a practice focusing on a variety of railroad and other regulatory and commercial transportation matters and associated legislative and policy issues.
Ms. Morgan's past experience includes acting as the Chairman, during President Clinton's Administration, of the former Interstate Commerce Commission (ICC), which became the Surface Transportation Board (STB) in 1996. During her 8 years as agency Chairman, she presided over numerous transportation regulatory proceedings, including rail rate and service matters and railroad merger cases of unprecedented national scope and complexity. In 1999, the Senate confirmed Ms. Morgan for a second term, and in 2001, President Bush asked for her continued service as Chairman until he designated a new Chairman in December 2002.
Prior to joining the ICC, Ms. Morgan served for 15 years as counsel with the Senate Committee on Commerce, Science, & Transportation, including seven years as General Counsel. During this period, Ms. Morgan was responsible for much of the legislation that established the framework for today's transportation system, including surface transportation policy that she later was in charge of implementing as Chairman of the ICC and the STB.
More background on Linda Morgan here: http://www.nossaman.com/lmorgan
Takeaway: Gold is nowhere near confirming anything at all except a dead cat bounce.
After crashing throughout 2013, Gold, Yen, VIX (volatility) were all up yesterday.
Yes, I will be fading that counter TREND move (shorting Gold and buying US and European equity beta) on that.
Sorry, but Gold is nowhere near confirming anything at all except a dead cat bounce.
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