Retail Callouts (8/13): M, AMZN, EBAY, TGT, PETM, BABA

Takeaway: Decent quality miss from M, sort of. AMZN’s traffic trends annihilating EBAY. CAB shows how gun retailers deal with looting.

EVENTS TO WATCH

 

Wednesday (8/6)

M - Earnings Call: 10:30am

 

Thursday (8/7)

WMT - Earnings Call: 7:00am

KSS - Earnings Call: 8:30am

JCP - Earnings Call: 4:30pm

JWN - Earnings Call 4:45pm

 

CHANNELADVISOR SSS

 

Retail Callouts (8/13): M, AMZN, EBAY, TGT, PETM, BABA - chart1 8 13 2014

 

Takeaway: The bifurcation between AMZN and EBAY is startling -- whether you look at a 1-year or 2-year trend. The fact that AMZN's numbers have accelerated sequentially every single month thus far in 2014 is simply remarkable. Too bad we're not seeing this from brick & mortar retailers as well.

 

COMPANY NEWS

 

M - 2Q14 Earnings

 

Macy's missed by $0.06, but truth be told, the quality of the quarter was really not that bad (and we're Macy's bears, mind you). Comps of 3.4%, EBIT growth of 6.9% and EPS growth of 10.7% is not a bad financial algorithm for a department store -- particularly with inventories and the cash conversion cycle well-controlled versus last year. If there's anything we'd poke a hole in it is that the SG&A ratio of 32.3% is the lowest EVER for Macy's in a 2Q in the history of the company. Not sure how excited we can get about an #oldeconomy zero square footage growth retailer driving earnings growth via leveraging SG&A.

 

Retail Callouts (8/13): M, AMZN, EBAY, TGT, PETM, BABA - chart4 8 13

Retail Callouts (8/13): M, AMZN, EBAY, TGT, PETM, BABA - chart5 8 3

Retail Callouts (8/13): M, AMZN, EBAY, TGT, PETM, BABA - chart6 8 3

 

CAB - The Hazelwood (St. Louis) Cabela's dealing with the riots while remaining open

(http://imgur.com/a/dhmPT)

 

With all the unrest and rioting in St. Louis due to the Police shooting of an unarmed 18-year old, the local Cabela’s responded in a draconian — yet socially responsible way. Check out the photos below.

 

Retail Callouts (8/13): M, AMZN, EBAY, TGT, PETM, BABA - chart2 8 13

 

There are only long guns on display, safely behind the counter. All handguns have been removed from the glass display cases to protect against flash mob-style smash-and-grab attempts. Specific firearms customers want to see are brought out one at a time from storage off the sales floor.

 

Retail Callouts (8/13): M, AMZN, EBAY, TGT, PETM, BABA - chart3 8 13 2014

 

The usually accessible racks of long guns leading toward the gun library have been emptied.

 

OTHER NEWS

 

TGT - New head of Target Canada plots his course to a turnaround

(http://www.theglobeandmail.com/report-on-business/new-target-canada-chief-outlines-plans-to-fix-empty-shelves-pricing-problems/article20009995/?cmpid=rss1)

 

"The new boss of Target Canada has drawn up a detailed plan to fix its raft of problems – from too many items jammed in its warehouses to pricing that is too high because 1,000 of its products failed to go through the retailer’s price comparison checks."

"Mark Schindele, who took over as Target Canada president in late May, said the U.S. discounter’s hasty launch of 124 stores and three warehouses last year 'led to some unintended consequences that we’re unwinding now.' They include bare store shelves and some prices that were higher than the same product at arch-rival Wal-Mart Canada Corp."

 

PETM - JANA Partners Issues Statement to PetSmart

http://www.sec.gov/Archives/edgar/data/863157/000090266414003430/exhibite.htm

 

"JANA Partners LLC and other shareholders have called upon PetSmart, Inc. to conduct a review of all strategic alternatives, including a sale, to maximize value following years of underperformance for shareholders."

"So far, PetSmart has resisted such a fulsome review and has instead proposed standalone options that are unlikely to generate as much value as a sale given its numerous operating and strategic challenges, and unsuccessfully attempted to convince the market that there is lack of interest from potential buyers. Now it appears that the board of directors is redoubling its efforts to avoid a genuine strategic review of all options to unlock value for shareholders."

 

BABA - Alibaba Gears Up For Sept. IPO

(http://www.wwd.com/business-news/financial/alibaba-gears-up-for-sept-ipo-7837502?module=Business-latest)

 

"The Chinese e-commerce company is weighing a plan to start marketing the share sale to investors on Sept. 3, with management traveling across Asia, Europe and the U.S. before an initial public offering in the middle of the month, people with knowledge of the matter said."

"The schedule, put forth by banks managing the IPO, would have meetings begin in Hong Kong and Singapore before executives travel to London and eventually host their first U.S. event in New York on Sept. 8, the people said, asking not to be identified discussing private information. The timeline has Alibaba targeting a Sept. 16 trading debut, the people said."

 

AMZN - Amazon.com builds brick-and-mortar presence with card-swiping device

(http://www.reuters.com/article/2014/08/13/us-amazon-payments-idUSKBN0GD0N420140813)

 

"Amazon.com Inc. unveiled a $10 credit-card reader and mobile app for brick-and-mortar businesses on Wednesday, marking the latest step by the U.S. online retailer to expand its presence in the physical world."

"The move pits Amazon against a slew of rivals, including startup Square, which popularized a payments dongle that allowed small- and mid-sized businesses like food trucks, coffee shops and personal trainers to quickly accept credit and debit cards."

"The new point-of-sale system, called Amazon Local Register, would give Amazon crucial data on how U.S. consumers shop offline. More than 90 percent of U.S. retail sales still take place in physical stores, according to U.S. government data."

 

APP - American Apparel Posts Preliminary $15 Million Net Loss

(http://www.bloomberg.com/news/2014-08-12/american-apparel-posts-preliminary-15-million-net-loss.html?cmpid=yhoo)

 

"American Apparel Inc., the clothing retailer whose founder is fighting to regain control of the company, posted a preliminary second-quarter net loss of $15 million as it failed to boost sales."

"The loss, which the Los Angeles-based company disclosed yesterday in a filing, is narrower than its $38 million loss a year earlier. Sales were little changed at about $162 million, according to the company, which said it’s delaying its official quarterly report because of the recent overhaul of its board."


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