US Financials (XLF): Love Me; Love Me Not?

As they were hitting new intermediate term highs, I shorted the financials yesterday via the XLF at $12.62/share.

Howard Penney will walk through the bottoms up earnings expectations embedded in Q3/Q4 for the Financials in another note. Here are a few things to consider as to why my macro models flashed sell:

  1. Spread – the yield curve’s spread is within 3 basis points of being as wide as it has ever been. Ever is a long time, and lending spreads can easily compress if the US Federal Reserve ever opts for sobriety in their analysis of Q4 inflation.
  2. Range – with GS and JPM earnings out of the way, the Financials look to be setting up to trade in a proactively predictable range. This will provide opportunities to tactically short the group on up days, and cover it on down days (my new range for the XLF is $11.56-$12.71; see chart below).
  3. Duration – as shown in the chart below, the long term TAIL for the Financials remains broken. Unlike the unlevered factors embedded in the Nasdaq, the financials need leverage and a socialized yield curve to earn a return on capital – so this makes sense.

Since the XLF bottomed on March 5th, 2009 at $6.24 we have seen a generational short squeeze that only an CNBC rockstar turned independent research analyst could perpetuate. AFTER a group rallies for a double (+102%) is not the time to get hyped up about Goldman Sachs. They are the chosen ones, we get it – but we also get that there is a time and a price for every risk managed position.


Keith R. McCullough
Chief Executive Officer

US Financials (XLF): Love Me; Love Me Not? - xlf

Charting Whether The Consumer Is Stupid

While it was all good and fine for Howard Penney and I to get excited about this chart bottoming in Q1 (being long the MEGA Squeeze in Consumer Discretionary), everything that matters to our macro model continues to occur on the margin. This morning’s US Consumer Confidence report (see chart) of 46.6 for July was a downtick from last month’s reading of 49.

As importantly, this month’s reading flashes another lower-high on the US Consumer’s appetite to buy into Wall Street/Washington latest line of storytelling. As the story goes, there is no inflation that will be born out of our government Burning The Buck. Bernanke and Geithner can issue limitless levels of credit creation, saving the Debtors obligations and the Bankers bonuses alike, and the US Consumer shall stand in line taking it for the man.

*Editor’s Note: on a 30 year basis, the only chart US macro chart that I can find that looks this bad is that of the US Dollar.

As the Debtors get paid, the Creditors pay the bills. The US Consumer is not stupid.


Keith R. McCullough
Chief Executive Officer

Charting Whether The Consumer Is Stupid - chart99


RCL recently gave revised 2009 guidance of $0.86; factoring in swine flu, a 45% increase in fuel prices, losses on ineffectual FX hedges, and cost of new debt issuance. The bad cat is out of the bag already for this heavily shorted stock.


The news has been so bad this year; it sets up for an easier comp next year, although we believe the key metric of Net Yields will still fall in 2010.  The near term channel check from travel agents and feedback from both RCL & CCL (see the “U-tube” section below) are consistently positive on the margin.  Despite the supply growth in Europe the ships are getting filled and the new ships are getting premium pricing.  Despite awful credit markets, ships are getting financed at attractive rates and companies are issuing notes.

When we step back and think about the big picture in our space, leisure travel is doing better on the margin.  The lodging companies have told us that leisure demand, which led the way into this recession, is now one of the few bright spots.  Leisure demand has been elastic, while corporate travel just isn’t showing any signs of life.  Positive CCL commentary a month ago surrounding booking volumes and firming pricing confirmed this elasticity.

When RCL reported 1Q09 earnings on April 23rd, 75% of 2009 bookings were in the bag. We bet that when they gave revised guidance on June 29th well over 80% of bookings were in the bag.  The other theme that has emerged so far in 2009 is beating on the cost side.  We expect this trend to continue for at least this quarter.   

That leaves us with 2010.  We have expressed our concerns for capacity coming online in 2010. Given the impact of swine flu, weaker USD, and benefit negative hedges continuing to roll off, RCL could very well show huge EPS growth in 2010.  That doesn’t mean that our fundamental outlook for 2010 has changed; it just may look better. 



Q1 Trends

“...some months ago the market had begun to stabilize and we are happy that the level of stability has continued to increase.”

“...volume is remaining surprisingly robust given the current economic climate.”

Ticket in tour revenue came in slightly better than we had forecasted and onboard spending was consistent with our forecast.”

“Our onboard revenue challenges continue to be driven primarily by gaming and other auctions. Our areas of strength are phone, Internet, shore excursions....” 

Booking environment

“The booking window is certainly more contracted that we had seen in 2007 and 2008 and much of the demand is being driven present by aggressive pricing.”

“... We have seen a little bit of uptick lately in the three to six months window... When you go beyond that six months market it's where we're seeing people really holding back in the high degree of uncertainty.”


“...second quarter departures are behaving much the same way that the sailings that occurred in the first quarter did... Since [January] then the volume of new business has improved significantly and year-over-year pricing changes have been very stable.”


“...we are still fairly early in the booking cycle ...But again, the same pattern that we witnessed in the first and second quarter seems to be developing in the third quarter and the momentum of new business for third quarter sailings has begun to accelerate.”

“... our best estimates have third quarter yield change on both in as reported basis and on a constant dollar basis to be slightly better than the second quarter”

Full year 2009

“European yields will be weak in 2009 on a year-over-year basis. Fortunately, however, our strategic expansion in Europe is delivering benefits to our brand as the number of Americans cruising in Europe has decreased. We estimate at about three-fourths of our guests in Europe this season will originate from European source markets.”

I would guess [RCL is] just under three quarters all-in booked for the year.”


  • Better than expected pricing on close in bookings
  • Slightly larger yield declines as the back half (‘09) of the year feels the full brunt of the recession and is impacted by the seasonal deployments in Alaska and Europe
    • A weaker dollar may mask some of this impact
    • Seem to have found a stabilization point between pricing and booking, and with the strong booking pace, some itineraries were showing price improvement
    • Since March they have seen both volumes and yields starting to improve – have been tweaking pricing up

3Q09 outlook (June 1 – August 30):

  • North American brands:
    • Saw a modest improvement in premium NA product, but “contemporary” product was impacted by swine flu
    • Resumed sailings to Mexico in June, with pricing rebounding (off of lows) and volume was strong
    • Guidance for next 3 quarters: 
      • Pricing is lower across all itineraries with steepest decline in Alaska, and Mexican Riviera also impacted. European itineraries pricing down, but better less so than originally expected. Caribbean lower and also impacted by swine flu
      • Occupancy lower y-o-y for Caribbean, Mexican Riviera and Alaskan itineraries and slightly higher for European itineraries
      • Expect NA yields to be lower in the double digit range by the time the 3Q closes
      • European Brands:
        •  Pricing held steady, little swine flu impact expect pricing down in the single digit range for the continental Europe brands, and with UK brands only down “slightly” (overall down single digit range)
        • Overall net yields down 14-16%

4Q09 outlook (Sept 1- Nov 30):

  • Fleet-wide occupancies and pricing are lower than 4Q08 levels but look sequentially better than 3Q09
  • North American brands:
    • Pricing commentary (y-o-y comparisons): Caribbean down similar to 3Q09, Alaska very weak, Europe is weak but better than Alaska.  Long and exotic cruise also down considerably
    • Occupancies lower but only modestly
    • European brands:
      • Pricing  continues to be better than NA brands, although still lower (y-o-y) but better than 3Q09

2010 outlook:

  • Expect yield declines in the 1Q2010; comps are difficult since a good % of 1Q09 booking were booked pre-crash. Expect occupancies to be flat
    • North American brands occupancy and pricing is lower across all itineraries (sounds like the booking levels are a lot lower but pricing is ok on what’s booked?)
    • European brand pricing is running about flat, but occupancies are lower

real-time alerts

real edge in real-time

This indispensable trading tool is based on a risk management signaling process Hedgeye CEO Keith McCullough developed during his years as a hedge fund manager and continues to refine. Nearly every trading day, you’ll receive Keith’s latest signals - buy, sell, short or cover.

Another Rear View Reality

It seems like forever ago but 6 months ago we were calling for:

A)    a MEGA Squeeze in Consumer Discretionary

B)    a Q2 Bottom in US Housing

Over the past month the Consumer Discretionary (XLY) has been the second best performing sector rising 9.3%.  Within the XLY, Home Builders and Household durable names have been the best performing names within the index.

Yesterday’s new home sales data and now the data from Case-Shiller provide some economic support for the move in the XLY.  The S&P/Case-Shiller home-price index dropped 17.1% year-over-year, the smallest drop in nine months.  The index increased from the prior month for the first time in almost three years. According to Bloomberg, consensus forecast suggested the index would drop 17.9%.

Helping to moderate the decline in home prices is the fact that distressed properties account for a smaller share of those sales.   In three out of the last four months, the index has seen a sequential improvement in moderating home prices. 

Stocks, fortunately, have discounted a lot of this news. They don’t care so much for the Rear View.

Howard Penney

Another Rear View Reality - shiller1

Another Rear View Reality - shiller2


PENN reports tomorrow. The only cracks we see are the possibility for slightly lower guidance and limited visibility on cash deployment. Street 2010 looks a little high but we’re not yet at that bridge.


Ignoring potential insurance proceeds, we see Q2 EPS and EBITDA close to PENN guidance and our estimate of $0.36 and $147 million, respectively.  The quarter should be a non-event.  For all of 2009, we are projecting $1.47 and $611 million, respectively, both in-line with the Street. 

Where we differ is 2010.  Our estimates of $1.48 and $645 million fall $0.08 and $26 million, respectively, short of the Street.  Numbers could go even lower, however, due to competitive conditions in many of PENN’s markets including Chicagoland, St. Louis, and Indiana (35% of property EBITDA in the aggregate).  Beyond 2010, most of PENN’s properties will face new market entrants.  We estimate over 80% of PENN’s EBITDA is generated in markets with increasing supply.  We’ll cross that bridge when we get to it.

The PENN positives are clear:  great management and a solid balance sheet and cash flow.  The negatives are the lack of growth and dwindling acquisition possibilities.  So what’s the right multiple?  The stock trades at about 7.5x 2010 EV/EBITDA and a 9% FCF yield.  Looks fair to us.



28 JULY 2009



Positive factors outweigh negative by 5 to 1. We would need to have seen the opposite to take this stock down.

UA’s revenue beat, EPS beat, guide-up and clean inventory position is going to frustrate plenty of folks today who are negative on the name – and trust me – there are plenty.  ALL of them will focus on the one negative…”how the heck could footwear be down 18%?”  Yes, that’s certainly a valid point. That number was below my estimate. But one that is being answered by the management change announced late last week and the hiring of Gene McCarthy as SVP footwear (the best footwear free agent out there). Find me any long term investor that owns the stock that now no longer thinks one that this is a remarkable opportunity for this company that that are proactively preparing to capture. Also, let me point out that 3 out of every 5 key bear case points thrown back at me over the past six months has been that core apparel ‘simply is not growing.’  Well, the +16% return to growth we saw this quarter in apparel is going to suck the wind out of that sail…

Anyway anyone wants to slice it…this is a very very positive result.



Some Notable Call Outs

- In a rare cross marketing effort between retailers, Foot Locker and Office Depot are collaborating on a back to school promotion. Presumably in an effort to leverage the traffic in two of the most important categories for the season, each is offering a discount for a cross purchase. It’s hard to think of many examples of retailers promoting each other, however with zero overlap between footwear and school supplies this appears to make some sense. Customers making a purchase at Footlocker will receive a coupon for $10 off a $30 purchase at Office Depot. For shoppers purchasing at Office Depot, they will receive a 20% off coupon for a purchase at Footlocker.

- DKS acquired six additional stores in Oregon, adding to the single store it is currently in that market. The former Joe’s Sports, Outdoor, & More locations are expected to open this fall. We mentioned a few weeks ago that DKS was poking around at the now-bankrupt Joe’s real estate, but this is the first indication that the company is taking multiple units in the pacific northwest. With 20 new store openings originally expected for 2009, we suspect the opportunistic entry is providing incremental growth opportunities beyond original expectations.

- In meetings with LIZ management yesterday, CEO Bill McComb suggested the likelihood that we see a significant pickup in markdowns over 2H, driven by the need to drive traffic (and not due to inventories which remain very clean).



- Pakistan is going to release a new textile policy to boost exports in the next three year - The policy will detail plans to hike exports to $25 billion in the three-year period, and would address issues regarding updating machinery, developing infrastructure and boosting human resources to enhance the industry's international competition. <>

- Thirteen Malaysian trade associations have raised concerns over the new foreign labour to the Minister of International Trade and Industry - Some of the issues which have been raised by these trade organisations include freeze on foreign labour intake and the proposed doubling up of levy on foreign workers to be borne by employers. Andrew Hong, CEO of Malaysian Textile Manufacturers Association said, "All associations based in Malaysia have joined their hands to raise their voice on a common issue of levy fee imposed on the companies ... they hope to get positive result from government to revert back to the old policy, but still are not sure about the results". <>

- EU Trade Commissioner soon to determine whether to extend duties on mainland Chinese and Vietnamese footwear - The debate whether these measures should be continued or not bitterly divides European producers and importers. Any decision taken will inevitably offend a large number of interested parties in the EU. Hong Kong's business community will recall that duties worth 16.5% for footwear from mainland China  and 10% for footwear from Vietnam, entered into force in October 2006 and are set to expire on 3 January 2010, unless the ongoing review decides that measures should be continued. A majority of around 15 Member States are opposed to the continuation of measures including Austria, Belgium, Czech Republic, Cyprus, Denmark, Estonia, Finland, Germany, Ireland, Latvia, Luxembourg, Malta, the Netherlands, Sweden and the UK. In view of this opposition, it would be unlikely that Commissioner Ashton would make a decision without gathering majority support among the Member States. <>

- The SGB Retail Top 100 list has some big changes from prior years - The turmoil of the last year has certainly had its impact on the retailers in the market, but there were as many opportunities as challenges this year.  Dick’s Sporting Goods once again took the top spot for full-line sporting goods stores - though the gap with arch-nemesis The Sports Authority narrowed just a tad.  Dick’s Sporting Goods has tempered store opening plans for this year after growing square footage in the double-digits again in 2008, but The Sports Authority has taken a more aggressive approach to the new stores as well, adding a net increase of 29 stores, including 11 stores in one day in August last year.  The mall, for the most part, is a place that has been getting healthier after years of rapid expansion and the eventual bursting of the retail real estate bubble.  The main players are all limiting store growth, instead focusing on expense controls and the renegotiation of leases when available.  There are some estimates that as much as 40% of the mall athletic specialty stores could be renegotiated, remodeled, re-named or shuttered this year. Jimmy Jazz, the New York-based urban retailer, posted the highest growth percentage for 2008 as they continue their rapid expansion into Florida and the Southeast and Midwest regions.  Jazz shows no sign of slowing down in 2009 after just completing a deal through an affiliated business to take the Man Alive stores from The Finish Line - a transaction that could add another 75 doors to the retailer’s portfolio.  The rest of the top high fliers in revenue growth owed their growth to the red-hot Internet business or specialty retail as, Athleta, Lululemon, and rounded out the top five growth stories of the year. Still, the tough business environment - particularly at retail - took its toll as dozens of small specialty shops disappeared from the landscape.  The pain wasn’t reserved for the small guy though, as Sportsman’s Warehouse was forced to shutter or sell a large number of stores and Joe’s Sports & Outdoors made it through the year only to find its 31 stores liquidated by the time this list went to print.  Joe’s made it onto the SGB Top 100 list for one last time, if only to better express the opportunity that awaits other retailers in the Northwest. <>


- Slowdown in merger and acquisition activity in the retail, apparel, footwear and restaurants sector - Merger and acquisition activity in the retail, apparel, footwear and restaurants sector fell sharply during the first half of the year, putting 2009 on track to be the slowest M&A year of the 21st century so far. According to a quarterly report by Robert W. Baird & Co.’s investment banking department, the number of disclosed M&A deals in the U.S. for less than $1 billion, considered “middle market,” dropped 37.7% to 43 from 69 during the first six months of the year. The value of the middle-market deals within the retail, apparel, footwear and restaurants sector fell 17.7%.  If current trends hold, 2009 would set new lows for both deal volume and value. Deal value peaked in 1999 at $1.57 trillion, according to Baird, but came close to matching that level in 2007, when deal value hit $1.51 trillion. The greatest number of disclosed deals in the last 10 years was 6,040 in 2000. At its current pace, M&A activity in the retail-restaurant sector easily would fall below the slowest year of the decade, 2002, when a total of 108 disclosed deals came through with a value of $15.25 billion.<>

- UK bears at credit ratings agency claim recent positive trends are unsustainable and downturn may last through 2011 - A leading UK credit ratings agency has dismissed recent signs of life on the high street as unsustainable, predicting that the downturn may continue through to 2011. Fitch played down recent positive trading figures from a number of firms including fashion chain Next, which said that fine weather in the first half of its trading year had added between 2% and 3% to sales. But the ratings agency said the upturn was temporary as a later Easter, better weather and many early sales conspired to give trading an artificial boost. Fitch added that retailers may have tied themselves in knots with the early sales, which left margins squeezed and firms backed into a corner to keep promotions or suffer shoppers looking elsewhere after becoming accustomed to price cuts. <>

- August is set to be a “weak” month for UK retail sales, according to figures compiled by the CBI - UK Retail sales fell for the third consecutive month in the year to July, with little respite forecast by retailers for August, according to the CBI’s Distributive Trades Survey. 32% of retailer respondents said that year-on-year sales volumes increased during the year to July, while 47% said that they were down.  27% of retailers forecast that sales would be below seasonal norms in August. The three month moving average of sales volumes was negative at a balance of -16% and is expected to drop further in August to -21%. <>

- Fast Swimsuit ban will take place in 2010 - The Fédération Internationale de Natation (FINA) has agreed to ban the record-breaking swimsuit technology that led to 108 world records last year and almost 30 already this year, according to reports from several sources including the Associated Press. The new rule will not take effect until 2010, as the 13th FINA World Championship is currently underway in Rome.  The ruling means that all use of non-textile fabrics will be barred by Jan. 1, 2010.  The argument for the ruling is that the non-textile suits, made from polyurethane, provide more speed and buoyancy to the swimmers, according to several published reports.  Yet swimsuit makers may argue that advances in sport technology can only benefit the sport and to deny access to these technologies would be putting the sport back decades to before it existed. <>

- Speedo expressed frustration over new swimsuit ban - Speedo blasted the Fédération Internationale de Natation (FINA) move to ban swimsuit technology that led to numerous world records over the last year. Among other points, Speedo said, "Any move which seems to take the sport back two decades – such as a possible return to the traditional female swimsuit and male jammer - is a retrograde step that could be detrimental to the future of swimming." <>

- Nike's management gets lower compensation - Lower earnings last year translated into smaller paychecks for Nike Inc.’s chief executive officer and the president of the Nike brand. Mark Parker, president and ceo of Nike, saw his total compensation decline 17% to $7.3 million from $8.8 million the year before. Although his base pay rose 6.3% to $1.5 million and his stock and option awards gained 4.4% to a total of $4.8 million, these couldn’t make up for a nearly two-thirds reduction in his nonequity incentive plan compensation, to $900,000 from nearly $2.7 million. Parker’s long-term incentive compensation, one of two components of the nonequity package, rose to $900,000 from $750,000 in fiscal 2008, but annual incentive compensation, tied to company performance, shrank to zero from $1.9 million. For Parker and his fellow top executives to qualify for the annual payout, Nike would have had to have posted yearend earnings before income taxes of $2.47 billion. However, Nike’s pretax profits fell to $1.96 billion, shutting out Parker and the other principals. <>

- LVMH accidently preannounces, posts Q2 flat sales and modest sales growth in 2H while also experiencing heavy destocking by distributors - LVMH reported a 23% decline in first-half profits, despite a modest sales gain, as its wines, spirits, watches and jewelry businesses were hurt by heavy destocking by distributors. But the French luxury group said it still expects to gain market share in 2009 because of product launches, expansion in new markets and cost containments. A spokesman for LVMH said the company had to publish the earnings earlier than scheduled after they were mistakenly released. Sales in the period rose 0.2% helped by strong global demand for Louis Vuitton bags and a good performance by the Sephora beauty chain. In the second quarter, sales were flat but fashion and leather goods sales grew 8%. Louis Vuitton bags and luggage had a “particularly exceptional” first half of the year, said LVMH, as the unit reported double-digit growth and strengthened its position across all regions. The brand also received a boost from Japanese shoppers, who took advantage of the strengthening yen by making purchases abroad. <>

- The recession’s reach seems to be forcing the City That Never Sleeps to dress more relaxed - The one-two combo of a decline in black-tie parties and benefits and the upswing in at-home entertaining is changing the way women dress up at night. That’s not necessarily such a bad thing, according to some fashion insiders — many of whom now have no qualms about wearing daytime pieces at night. Dresses with detachable accessories also fit the bill for post-work festivities. All in all, many Americans seem to be warming up to a more low-key lifestyle. <>

- Ebay takes advantage of vacant retail space through pop-up store whose lifespan is short - Ebay on Monday began filling with products a 5,000-square-foot three-dimensional equivalent of its online self at 3 West 57th Street. EBay, with platforms for trading goods and services auction-style, payments and communications, wanted people to see what just a fraction of its inventory would look like in a store — even if only for five days. “They’ve taken this fabulous retail space among all these great neighbors and decided to create the brick-and-mortar experience of what eBay is,” a spokeswoman said. “There will be ‘wow’ items, including lots of clothing, shoes and accessories.” The company said its holiday preview event would showcase a diverse selection of new and used merchandise from Louis Vuitton, Apple and Barneys New York, which, coincidentally, happen to operate stores within blocks of the eBay pop-up. Ebay is leasing space in a neighborhood with a high pedigree. Bergdorf Goodman is just east of the space, which previously housed auction house Phillips, de Pury & Luxembourg. The location, said the spokeswoman, “is at the physical and metaphorical intersection of shopping, pop culture, high style and creativity.” <>

- Lacoste Footwear president resigns - Gary Malamet has resigned from his position as president of Lacoste Footwear, a wholly owned subsidiary of Pentland USA Inc., based in New Hyde Park, N.Y. Malamet, who joined the company in January 2007, was responsible for overseeing operations in the U.S. and Canada. A replacement has not yet been announced.  <>

- VF Corp. named David Conn president of VF Retail Licensed Brands - Conn is the former EVP of Iconix Brand Group and also served in senior marketing roles at Columbia House and Candie’s Inc. In his newly created role, Conn will seek out new retailers for the company’s licensed business. “Partnering with leading retailers is one of the cornerstones of VF’s growth strategy,” Mike Gannaway, VP of VF Direct/Customer Teams, said in a statement. “Beyond our core national brand strategy, we see additional opportunities for growth with key partners through the introduction of new brands under a licensed business model. David brings a unique set of skills, capabilities and brand licensing experience to VF that will prove effective in leading our efforts in this new endeavor.” <>

- LaCrosse Footwear posted a massive beat at $0.26 when the street was at -$0.01 - This is the first company we have seen that has beaten on a revenue basis.  Although BOOT beat big time on EPS, here are some reservations about the implications of the Q2 09’s results and the company’s future looking forward: 1) Sales were only a beat because of increased military orders which boosted work/occupational sales up 26% while their non military leveraged outdoor category revenue was down 22%, 2) inventories were completely out of control being up 35% while sales were only up 7.5%, 3) BOOT’s cap ex is on the rise which is completely opposite to the entire footwear and apparel industry. 

- Rocky Brands misses earnings on lower sales - Cautious inventory commitments and decreased consumer spending contributed to sales and earnings losses at Rocky Brands Inc. in the second quarter. For the three months ended June 30, Rocky Brands reported a net loss of $1.4 million, or 25 cents a share, versus earnings of $700,000, or 13 cents, during the year-ago period. Sales at the Nelsonville, Ohio-based company dropped 15 percent to $51.2 million, compared with $60.5 million last year. Sales in wholesale were down 11 percent to $37.9 million, while retail sales decreased 24 percent to $12.3 million for the quarter. “Sales were down as retailers remained cautious with inventory commitments as the result of decreases in consumer spending and store traffic,” Mike Brooks, chairman and CEO of Rocky Brands, said in a statement. <>

- Christian Lacroix SNC received a serious bid from Italy’s Borletti Group - The administrator of Christian Lacroix SNC said Monday it has received a “serious” bid from Italy’s Borletti Group, the owner of department stores La Rinascente and Printemps, in association with the designer. Monday was the deadline to lodge offers for the couture house, which has been in administration after filing for protection against creditors in May. A commercial court is due to rule in September on the offers, including Borletti’s. A bid from French turnaround firm Bernard Krief Consultants, which last week said it was planning to make an offer for the fashion house, has been deemed unsatisfactory, said a spokeswoman for administrator Regis Valliot. <>

- Cartier `Not Sure Worst Is Over' for Jewelry Market as Slowdown Persists - Cartier, the biggest brand owned by Cie. Financiere Richemont SA, is prepared for a prolonged slowdown in the jewelry market and lower sales this year, with more workers set to work part-time hours if needed, according to U.K. Managing Director Arnaud Bamberger. <>

- Wal-Mart selling exclusive Foreigners Comeback CD - Can Walmart work its magic for yet another '70s rock act? The retail giant's exclusive September 29 release of Foreigner's Can't Slow Down will be its first major exclusive since AC/DC's Black Ice in October. The album (Foreigner's first since 1995's Mr. Moonlight) has much in common with Journey's 2008 Walmart-only release, Revelation. Like its predecessor, Can't Slow Down will be a three-disc set that features a CD of new material, a concert DVD and a best-of collection. But whereas Revelation included a CD of rerecorded Journey favorites, Foreigner remixed the band's original master recordings to make its hits sound more contemporary. Perhaps most noticeable to longtime fans of both bands, each release features a replacement lead singer -- in Foreigner's case, Kelly Hansen, who takes the place of original frontman Lou Gramm. Despite the absence of original Journey lead singer Steve Perry, Revelation sold 633,000 copies in the United States, according to Nielsen SoundScan. In its debut week that ended June 8, 2008, it sold nearly 105,000 copies, good enough to reach No. 5 on the Billboard 200 album chart. Black Ice sold 2.1 million U.S. copies, including 784,000 in its debut week that ended October 26, 2008. <>

- Coldwater Creek names a creative director for stores and its retail site - The retailer has named Jerome Jessup to the newly created position of executive president and creative director, with responsibility for brand management, creative services and visual merchandising. <>

- Zale hires a new marketing leader who will oversee its web site - Zale Corp., a chain and online jewelry retailer, has hired Richard A. Lennox as executive vice president and chief marketing officer. His duties will include overseeing Zale’s e-commerce operation. <>

- Footwear and apparel from Nice Skate Shoes, or NSS, will launch at Kmart and Sears stores soon - The young men and boys apparel line ($9.99 to $26.99) features street-and skater-themed T-shirts, hoodies, denim, belts, chains and other novelties. NSS shoes ($17.99 to $44.99) are offered in sizes from toddler to adult for men, women and kids. To kick off the apparel launch, Kmart and Sears have created the nationwide rideNSStour, where the best skating talent will compete at 25 skate parks in California, Kentucky, Ohio, Pennsylvania, Maryland, New York, New Jersey and Indiana. <>

- KB Toys intellectual property sale set - Streambank has set an Aug. 6 auction date for the intellectual property sale of KB Toys, which filed for Chapter 11 this past December. No stalking horse bidder has been confirmed. <>

- Bebe enters into licensing agreement with Titan industries for footwear - Mall-based women's apparel retailer Bebe Stores Inc said it entered into a five-year licensing agreement with Titan Industries Inc to design, manufacture and distribute non-casual footwear for women. The Brisbane, California-based retailer said the new bebe shoe collection will be sold in bebe stores in the United States and Canada as well as select specialty and department stores worldwide from early spring 2010. The shoes will be priced in a range from $89 to $169 at retail stores, the company said in a statement. Titan was created in 1998 for the sole purpose of licensing shoes under the bebe brand, Titan's Chief Executive Joe Ouaknine said. Bebe's shares closed at $6.63 Monday on Nasdaq. Pasted from <>

- The spring ’10 Polo Ralph Lauren Layette collection offers plenty of options for pint-size preppies - With patent leather loafers, nautical-inspired slip-ons, casual sneakers and gingham-print espadrilles, some of spring’s most classic styles have been shrunk down for the cradle crowd. Produced under license by Boca Raton, Fla.-based BBC International, the collection retails from $20 to $50. <>



RESEARCH EDGE PORTFOLIO: (Comments by Keith McCullough): UA, AZO

07/27/2009 10:49 AM

BUYING UA $24.22

Company reports tomorrow and if this stock gets squeezed I don't want to miss it. Intermediate term TREND line support = $21.98. KM


07/27/2009 10:31 AM


Lampert keeps selling, but we need to trade around this position - short green days; cover red ones. KM







Enter your email address to receive our newsletter of 5 trending market topics. VIEW SAMPLE

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.