prev

Cartoon of the Day: 1,000 Years

Takeaway: The U.S. housing market is going downhill (just when many economists thought annual sales would be heading up.)

Cartoon of the Day: 1,000 Years - Housing 04.25.2014

 

From Hedgeye's Q2 Macro Themes:

 

#HousingsSlowdown:  We have been big housing bulls over the last 18 months. But the party is ending. Asymmetry in being long has flattened.   Price follows demand on a lag and demand is slowing as affordability declines, regulatory changes drag on liquidity, and institutional interest ebbs.  We will walk through our updated view on the Supply/Demand/Price dynamics prevailing in the housing market and our forward outlook for prices. 

Subscribe to Hedgeye.

 


Video | McCullough to Bartiromo: Europe Is a Better Place to Be Than U.S.

 

Hedgeye CEO Keith McCullough shares his views on European markets with Maria Bartiromo, host of Fox Business' Opening Bell.


Subscribe to Hedgeye.


Video | McCullough: Tread Carefully In This Market, Particularly In the Nasdaq

 

Hedgeye CEO Keith McCullough discusses some concerns he has about the market right now with Fox Business host Maria Bartiromo on "Opening Bell."

SUBSCRIBE TO HEDGEYE.

 


investing ideas

Risk Managed Long Term Investing for Pros

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.

Video | McCullough to Bartiromo: $400 Amazon? More Like $200

 

Hedgeye CEO Keith McCullough talks tech stocks with Maria Bartiromo, host of Fox Business' Opening Bell.

Subscribe to Hedgeye.


Under Armour: Brand Heat Has A Price | $UA

Takeaway: UA could not afford even the slightest blemish this quarter, unfortunately.

Under Armour: Brand Heat Has A Price | $UA - ua kevin plank

 

Here are some key takeaways from a research note that was originally sent to subscribers on April 24, 2014 by Hedgeye Retail sector head Brian McGough. Follow McGough on Twitter @HedgeyeRetail.

Key Takeaways

  • Not the quarter a 50-times multiple needed. We remain confident that this company will double – at least – over 5-years. But will continue to spend heavily to achieve that goal.
  • One thing we’ve got to give UA regardless of margin trajectory – this management team is as focused as any we know.
  • Overall, it was a great quarter for Under Armour when viewed in isolation.  Unfortunately, the market does not view things in isolation – nor do we.
  • People obviously did not love UA’s guidance for the upcoming year. UA beat by $43mm in revenue, but only took up full-year guidance by $40mm.
  • There was something about CEO and founder Kevin Plank today on the call that seemed exceptionally mature, seasoned, focused, and not only a great Brand ambassador (which he’s always been) but a flat-out solid leader for Under Armour.

Under Armour: Brand Heat Has A Price | $UA - UA sigma

SUBSCRIBE TO HEDGEYE.


Retail Callouts (4/25): HBI, AMZN, BRBY, Alibaba, NKE, UA, WMT, ARO, HMB

Takeaway: Maidenform carries HBI. AMZN good, but needed great. BRBY taps Alibaba. NKE/UA store openings. WMT changes up Asia.

COMPANY NEWS

 

HBI - 1Q14 Earnings

 

Retail Callouts (4/25): HBI, AMZN, BRBY, Alibaba, NKE, UA, WMT, ARO, HMB - chart1 4 25

 

Takeaway: The good: HBI continues to push margin expansion and still has some room to run as it recognizes the synergies from the Maidenform integration. The bad: HBI's core business was flat after stripping out FX on top of a -2% number in 1Q13, which equates to a -1% 2yr core run rate. Yes, this company can and will acquire to grow the top line, but what happens when they can no longer take price and commodity costs turn from a tailwind into a headwind?

 

AMZN - 1Q14 Earnings

 

Retail Callouts (4/25): HBI, AMZN, BRBY, Alibaba, NKE, UA, WMT, ARO, HMB - chart5 4 25

 

Takeaway: AMZN results were slightly above printed expectations -- but how do you really measure expectations for something that trades at 135x earnings.  Top line grew at 22.8% at $19.74 billion vs Consensus $19.46 billion (21.1%), and accelerated YoY and sequentially -- good news there.  But North American Media decelerated sequentially, which is not what we want to see. Sure, AWS (Amazon Web Services) picked up some slack -- but is that really the future of this brand? #no. 

 

BRBY, Alibaba - Burberry Teams With Alibaba's Tmall.com

(http://www.wwd.com/retail-news/direct-internet-catalogue/burberry-teams-with-alibabas-tmallcom-7654803)

 

  • "Burberry has unveiled a collaboration with the Alibaba Group to open a Burberry store on Tmall. The new tie-up is a first for any luxury brand on the platform. The collaboration with China’s largest online retail platform will further connect Chinese consumers to the Burberry brand."
  • "The official Burberry Tmall.com store will offer a tailored assortment of products from all of the brand’s product categories. The store will be accessible in China across all mobile, tablet and desktop devices. The custom-built, dedicated space mirrors the brand’s own online flagship store, Burberry.com…"

 

Takeaway: BRBY's move validates the Alibaba platform in China. Adidas, New Balance, and GPS among others already use Tmall as the platform for their dot.com presence in China, but luxury brands have been hesitant to follow suit primarily because of fears over brand integrity and counterfeiting. We think its an interesting opportunity for RL in particular who we think has a lot to gain from partnering with Alibaba for its e-commerce operations in China.

 

NKE, UA - New Doors for NKE in Boston and UA in New York

 

Retail Callouts (4/25): HBI, AMZN, BRBY, Alibaba, NKE, UA, WMT, ARO, HMB - chart1 4 24

Retail Callouts (4/25): HBI, AMZN, BRBY, Alibaba, NKE, UA, WMT, ARO, HMB - chart2 4 24

 

Takeaway: New doors for both brands opened over the past week. For UA, it’s a major milestone for the brand as it opens its first significant full-price door -- and in New York nonetheless. What strikes us is the influence LULU has had on the athletic retail store experience - the brand redefined the way brands sell athletic apparel especially to women.

 

WMT - Wal-Mart Names China CEO to Head Asia as Regional Sales Slow

(http://www.bloomberg.com/news/2014-04-25/wal-mart-s-asia-ceo-leaving-post-amid-slowing-growth-in-region.html)

 

  • "Wal-Mart Stores Inc. named its top China executive to head its Asian operations amid store closures and sluggish sales in the region that have hampered the retailer’s attempts to counter slowing growth in the U.S."
  • "Greg Foran, the chief executive officer of Wal-Mart’s Chinese operations since 2012, will take over as president and CEO of Asia from Scott Price, Wal-Mart, the world’s largest retailer, said today. Price, 53, will move to the company’s headquarters in Bentonville, Arkansas, as an executive vice president. The changes take effect June 1."

 

Takeaway: McMillion and WMT continue to rework the international leadership. Since the announcement of his promotion to CEO, new leadership has been put in place for Walmart International, WMT India, and now Asia. Clearly the former strategies weren't working, and now WMT is trying to get its C-suite in place as it renews its International push.

 

OTHER NEWS

 

UA - S&P 500 Adds Navient, Under Armour

(http://online.wsj.com/news/articles/SB10001424052702303380004579522170119563780)

 

  • "S&P Dow Jones Indices said Thursday it would add...athletic-goods maker Under Armour Inc. to its S&P 500 index, effective April 30."

 

AMZN - Amazon, in Threat to UPS, Tries Its Own Deliveries

(http://online.wsj.com/news/articles/SB10001424052702304788404579521522792859890?mg=reno64-wsj)

 

  • "Adjacent to recently closed Candlestick Park, Amazon is testing its own delivery network for the 'last mile,' the final leg of a package's journey to consumers' doorsteps. Trucks loaded with Amazon packages and driven by Amazon-supervised contractors leave for addresses around San Francisco. Similar efforts are under way in Los Angeles and New York."
  • "Delivering its own packages will give Amazon...which have grown as a percentage of sales each year since 2009, according to securities filings."

 

Retail Callouts (4/25): HBI, AMZN, BRBY, Alibaba, NKE, UA, WMT, ARO, HMB - chart2 4 25

 

ARO, HMB - Aéropostale Sues Hennes & Mauritz

(http://www.wwd.com/business-news/legal/aropostale-sues-hennes-mauritz-7655971)

 

  • "The New York-based specialty chain sued Swedish fast-fashion giant Hennes & Mauritz in Manhattan federal court Thursday over use of the Live Love Dream, Aero and 87 trademarks."
  • “'H&M engaged in a pattern of conduct involving the use of identical, or nearly identical marks on some of the same goods for which Aéropostale uses its marks, namely, clothing and tote bags,' Aéropostale said in the suit."
  • "Aéropostale said it discovered in March that H&M was selling a graphic T-shirt and a cloth bag with the words Live Love Dream and upon further investigation discovered other looks that it claims infringe on other trademarks."

 

WTSL - The Wet Seal, Inc. to Exit Arden B Business

(http://ir.wetsealinc.com/releaseDetail.cfm?ReleaseID=842601)

 

  • "The Wet Seal, Inc...today announced that it will begin winding down its Arden B brand. Arden B currently operates 54 mall-based stores and an e-commerce web site...In the fiscal year ended February 1, 2014, Arden B generated net sales of $60.4 million and represented 11% of consolidated net sales."
  • "31 Arden B locations will transition to Wet Seal Plus merchandise and the remaining 23 locations will transition from Arden B to Wet Seal merchandise. Where permissible, Arden B locations will be refreshed with either Wet Seal or Wet Seal Plus signage. The Company expects to complete this conversion by the start of the back-to-school selling season in late July."
  • "Through lease expirations and the exercise of early termination provisions, the Company will close 15 Arden B locations through the remainder of fiscal 2014 and 16 Arden B locations in fiscal 2015. For the interim period while Arden B locations remain open, the stores will offer Wet Seal or Wet Seal Plus merchandise, as noted above."

 


get free cartoon of the day!

Start receiving Hedgeye's Cartoon of the Day, an exclusive and humourous take on the market and the economy, delivered every morning to your inbox

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.

next