Retail Callouts (9/16): ICSC, DKS, URBN, WWW, M

Takeaway: ICSC - 3% growth simply 'ok'. DKS loses two executives. URBN feeling the media heat. WWW shuffling the deck. M outlines e-comm strategy.



Wednesday (9/17)

PIR - Earnings Call: 4:30pm


Thursday (9/18)

RAD - Earnings Call: 8:30am




Takeaway: This marks the second biggest sequential deceleration we've seen in these numbers all year -- +3.0% from +4.0%.  The irony is that if we turned the clock back six months, the industry would have given anything for a 3% comp. Now, after the huge numbers we've been seeing for the past quarter, a 3% reading is simply 'ok'.


Retail Callouts (9/16): ICSC, DKS, URBN, WWW, M - 9 16 chart1

Retail Callouts (9/16): ICSC, DKS, URBN, WWW, M - 9 16 chart2




DKS - Departure Of COO and EVP of Merchandising



  • "On September 10, 2014, Joseph H. Schmidt informed Dick’s Sporting Goods, Inc. of his intention to retire from his position as President and Chief Operating Officer, a role he has held since 2009. Mr. Schmidt has served in several key leadership roles since joining the Company in 1990. Mr. Schmidt will remain with the Company until the end of fiscal 2014 or such other date as mutually agreed to by Mr. Schmidt and the Company. The Company has initiated a search for Mr. Schmidt’s successor."
  • "On September 10, 2014, John G. Duken informed the Company of his plan to retire, effective as of the end of November. Mr. Duken has served as the Company’s Executive Vice President, Global Merchandising since 2012. Mr. Duken joined the Company in 1999 and has held a number of roles in operations, planning & allocation and merchandising throughout his tenure."


Takeaway: When is it a good sign when both the COO and head of Merchandising are fired/pushed out/step down on the same day? Never. The reality is that Dick's problems go far beyond these two individuals...but accountability has to start somewhere. We wouldn't touch this stock unless it was on the short side.


URBN - Urban Outfitters Features "Vintage" Red-Stained Kent State Sweatshirt


  • "The Ohio university is best known for the 1970 shootings on campus that left four anti-war protesters dead.  Urban Outfitters has pulled the sweatshirt from its website and apologized."


Retail Callouts (9/16): ICSC, DKS, URBN, WWW, M - 9 16 chart3


Takeaway:  We're all for pushing the envelope as to what is considered socially acceptable from a product and brand messaging standpoint. But this is definitely taking it too far. But let's be real, URBN isn't exactly knocking the cover off the ball right now. Even negative attention is good attention at this point. That's probably what the Urban merchants thought when they braced for the fallout from this product launch.


WWW - Wolverine Worldwide Names Rick Blackshaw President of Sperry Top-Sider and Chris Lindner President of Keds



Takeaway: The swap between Sperry and Keds is puzzling at face value.  But the bigger point is that this is not a first for WWW. It is part of the company's DNA. Very few executives in the WWW organization have stayed with one brand throughout their whole tenure. Now WWW is applying the same philosophy to the acquired PLG brands, which makes perfect sense.  This is NOT a sign of things going wrong at Sperry or Keds, which we're inclined to think that WWW/Sperry-haters will try to argue. We'll take the other side of that any day.


M - Macy’s, Inc. Outlines New Developments in Omnichannel Strategy and Technology



  • "Macy’s and Bloomingdale’s to help launch Apple Pay; same-day delivery to be piloted in fall 2014; new POS technology and customer service enhancements in testing; new apps, web functionality and mobile wallet launched; RFID being expanded to fashion categories"


Takeaway: Over the past eight years, M has grown its online business at a 32% CAGR, 2nd only to KSS. That channel now accounts for about 15% of total sales - tops in the pier group. Macy’s is the best in the business at driving its financial model, and we’ve got to respect that. But when all is said and done, we simply have a tough time justifying that there’s enough room to evolve the financial model into something that’s meaningfully better than we see today. Margins are tapped and costs are accelerating. That’s not in expectations. But, we have to give credit where credit is due. In this release, M outlines 12 initiatives it has in the works to enhance both the online and in-store shopping experience through technology. Some of them echo the rest of the industry, particularly buy online pick up in store and same day delivery, but for the most part M is leading the charge when it comes to technological innovation.




ASOS- Trading Statement for the three months ended 31 August 2014



  • "Our UK performance remained strong over the final quarter, with sales increasing 33%. Our
  • International business grew 6% or 14% in constant currency. However, due to the fire at our
  • Barnsley distribution centre, we lost sales during the quarter of between £25m and £30m with a retail gross margin impact of c.200 basis points. After adjusting for insurance proceeds, we expect profit before tax for the year to be in line with market expectations."


RSH - RadioShack Appoints Interim Chief Financial Officer



  • "RadioShack Corporation announced the appointment of Holly F. Etlin as interim chief financial officer, replacing John Feray.  Mr. Feray resigned on September 12, 2014, citing personal reasons."
  • "Ms. Etlin, a managing director of AlixPartners and longtime RadioShack advisor, served as RadioShack's interim CFO from July 2013 to February 2014."


AMZN - Amazon Begins Login and Pay in Europe



  • "Amazon will today open its Login and Pay With Amazon system in Europe, the streamlined payment and checkout solution that made its debut in the U.S. in October."
  • "The tool allows for consumers to use their Amazon credentials when purchasing from non-Amazon sites, eliminating the need to reregister and input personal information every time a consumer shops at a different e-tailer."


SHLD - Sears Borrows $400 Million From Lampert’s ESL Investments



  • "'Sears Holdings Corp. is taking a $400 million short-term loan from the hedge fund owned by its chief executive officer and largest shareholder, Edward Lampert.'"
  • "'Lampert’s ESL Investments provided $200 million as of yesterday and will fund the remainder on Sept. 30, Hoffman Estates, Illinois-based Sears said in a regulatory filing. The money will be used for 'general corporate purposes.'"


ANN - ANN INC. Responds to Engine Capital LP and Red Alder LLC



  • "We have met with Engine Capital and Red Alder, and the full Board has had the opportunity to review the presentation of Engine Capital and Red Alder referenced in their press release. "
  • "While the Board appreciates the input of Engine Capital and Red Alder, none of the analyses contained in their presentation is new to the Board.  The conclusions that one draws from these analyses depend heavily on the various assumptions made.  The Board continues in a very deliberate manner and on an informed basis to consider and determine the courses of action that are in the best interests of all of its shareholders."


TJX - T.J.Maxx enlists stars for style campaign



  • "This fall, T.J.Maxx is partnering with Erika Christensen and designer Jenn Rogien, who has made headlines for her wardrobe curations for hit TV series such as “Girls” and “Orange Is the New Black,” for a new ad campaign revolving around a woman’s style."


GME - GameStop to exit Spanish market



  • "GameStop Corp. plans to exit the Spanish market by selling some stores there to U.K.-based video game retailer Game Digital plc, and closing the remaining locations. Under the terms of this proposed agreement, GameStop will transfer ownership of a portfolio of GameStop stores located in Spain with the remaining retail sites winding down in 2014."

PODCAST | McCullough Talks VIX, Hedgeye Process and More

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Takeaway: 47% of Nasdaq stocks and 41% of stocks in the Russell 2000 are crashing from their 12-month peak. The long bond? It's up +12% YTD.

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Takeaway: Adding LVS to the Hedgeye Best Ideas list on the short side

Jimmy McMillan would be cutting estimates.



We are adding LVS to the Best Ideas list on the short side.  Consensus estimates still need to come down for Q3, Q4 of 2014 and for 2015.  Hedgeye is currently 6%, 7%, and 9% below the Street, respectively.



LVS was a top long idea on the Best Ideas list from 01/31/14 until we removed it on 03/10/14.  We made our Mass Decelerating call on June 13th and highlighted LVS as the most at risk to estimate reduction and stock pressure.  The condition of the Macau market has deteriorated faster than even we expected and while we’ve had lower than consensus estimates for 2H for a while, we feel compelled to lower estimates once again.  Here are our EBITDA estimates versus Consensus.




We still like the long term outlook for Macau and believe that LVS is very well positioned to capitalize on Macau and Asian growth.  However, with the fundamentals worsening over the near and intermediate term, Mass disappointing more on the margin, and lower estimates, LVS and the Macau stocks look like they should continue to move lower.  Strong Golden Week hotel bookings notwithstanding, October and Q4 offer few catalysts and we fear the difficult market will continue into 2015.


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