Retail Callouts (6/9): Ideas List, WMT, FDO, FOSL, JWN, KORS, KATE, AEO

Takeaway: Updated Hedgeye Retail Ideas list. WMT curious shopper data disclosure. FOSL - Tory Burch watch line to debut in Fall


*Deleted RL and WSM from Short Bench and added both to Long Bench.

Retail Callouts (6/9): Ideas List, WMT, FDO, FOSL, JWN, KORS, KATE, AEO - ideas




TUESDAY (6/10)

  • FRAN - Earnings Call: 8:30am
  • ULTA - Earnings Call: 5:00pm



  • RH - Earnings Call: 5:00pm



  • LULU - Earnings Call: 9:00am




WMT - Shopper Data Stats


Retail Callouts (6/9): Ideas List, WMT, FDO, FOSL, JWN, KORS, KATE, AEO - chart2 6 9


Takeaway:  This is one of the strangest tweets we've ever seen from a company.  We're not sure how WMT thinks customers will react to it touting how much information it has on their shopping behavior.  From where we sit, it makes a lot more sense for WMT to simply pipe down and use the information to optimize the pricing part of equation around the type of product it has in its stores. It's presumably doing that already -- which we'd arguably makes this a bearish statement by the company. It has 30 petabytes of shopping information, and still can't comp. McMillon shouldn't have signed his name to this tweet.


FDO - Carl Icahn discloses 9.4% stake in Family Dollar



  • "Carl Icahn reported a 9.4% stake in Family Dollar Stores Inc., calling the stock undervalued and saying he plans to agitate for changes."
  • "Icahn said he plans to seek discussions with the retailer’s management to discuss 'strategies to enhance shareholder value,' potentially including the 'exploration of strategic alternatives.' The billionaire investor made the statement in a filing Friday with the Securities and Exchange Commission."
  • "Icahn said he and his affiliates 'may also determine to seek shareholder board representation if appropriate.'"


Takeaway: Interesting move here. From where we sit, FDO clearly has a sub-par real estate portfolio when compared to it's arch-rival, Dollar General. After shifting incrementally to consumables to drive traffic, now it's resorting to less desirable items like tobacco. We've looked at FDO so many times, and never did we ever walk away thinking that it is a long -- except in a situation where you want a levered bet on the low-end US consumer (something we have not wanted in a while). The point here is that FDO strikes us as one of those companies where an activist can't be the catalyst for meaningful change inside the company. If anything, it'd be that Icahn looks to get this company sold.


FOSL, JWN - Tory Burch Extends Brand Into Watches



  • "Tory Burch has teamed with Fossil Group to launch her first watch collection, due out in October.
  • Burch and Fossil first inked the deal in February 2013, and over the past 15 months have worked together to shape the debut collection. The final selection features nine models done in multiple colorways, and will be unveiled to press on Wednesday."
  • "The... collection ranges in price from $350 to $695. The price point places Burch higher than watches by Kors (which retail from $140 to $550) and Marc by Marc Jacobs (priced from $150 to $350)."
  • "The initial collection will be available exclusively at Nordstrom, as well as at Tory Burch stores and on"


Takeaway: Logical next category for Tory Burch following in the footsteps of KORS and KATE who have looked to watches, jewelry, and accessories to support the next leg of growth. Not a direct competitor to the two aforementioned names given Burch's much higher price points, but definitely competition on the fringe. FOSL keeps winning these licenses given its high-quality, low-cost status in the industry, which has helped offset the secular slowdown in the watch category.




AEO - American Eagle to open UK stores



  • "The fashion chain is in talks to open a store at Westfield’s Stratford City shopping centre, as well as at its west London centre and Bluewater in Kent."
  • "The company has filed documents at Companies House to create a UK subsidiary called American Eagle Outfitters UK Limited, paving the way for it to open stores."
  • "A total of 31 international retailers opened stores in London for the first time last year, including US fashion retailer J Crew and luxury brand Tom Ford.  This means that 57pc of international brands – almost three in five – have a presence in London."


CWTR - Sycamore Acquires Coldwater Creek IP Assets



  • "Private equity firm Sycamore Partners has acquired the intellectual property assets of bankrupt women’s specialty retailer Coldwater Creek."
  • "The purchase, which included customer lists, was through a Sycamore affiliate, CWC Direct LLC, last month at a bankruptcy court auction in Delaware. A Delaware bankruptcy court has already approved the acquisition."
  • "A source familiar with Sycamore’s plans said the financial firm intends to reestablish the business in the future. The entity would operate as a separate company under Sycamore’s growing portfolio that now includes Talbots, Hot Topic and the former Jones Group brands."

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more

Amazon's New 'Big Idea': Ignore It At Your Own Peril

"We all see another ‘big idea’ out of Amazon (or the press making one up) just about every day," writes Retail Sector Head Brian McGough. "But whatever you do, DON’T ignore this one!"

read more