Retail Callouts (9/24): KSS, BBBY, TGT, WMT, Holiday Sales

Takeaway: KSS Short call at 11am. BBBY finally turns – how long will it last? going heavy on price. Deloitte Holiday survey bullish, as always.



KSS CALL TODAY AT 11am -- Why We Think It's a Short

Toll Free Number:

Direct Dial Number:

Conference Code: 765136#

Materials: CLICK HERE


Thursday (9/25)

NKE - Earnings Call: 5:00pm


Friday (9/26)

FINL - Earnings Call: 8:30:am





BBBY - 2Q14 Earnings

This is the first solid print for BBBY in a very long time. For those (including us) who missed the event, we'd simply ask...if BBBY could disappoint repeatedly for the better part of two years, why should we assume that the positive turn lasts only one quarter? The company took up numbers, but our sense is that there's a lot more room to go. We're adding this one to our long bench -- need to dig in to gauge additional upside.


Retail Callouts (9/24): KSS, BBBY, TGT, WMT, Holiday Sales - 9 24 chart1



TGT, WMT - Kantar Retail: Target Canada beats Walmart Canada on pricing



  • "Target Canada is aggressively repositioning to drive its price value, according to a basket pricing study by Kantar Retail."
  • "'Target’s price leadership in Canada has clearly shifted,' noted Robin Sherk, director of retail insights, Kantar Retail, and contributor to the study. 'We found that the price of Target Canada’s overall basket was 3.9% less expensive than Walmart’s. In our initial study, the retailers’ basket values were effectively even.'"


Takeaway: This might very well be the right move for Target Canada, as it needs to dramatically improve traffic to it's stores. But we can't shake the concern that a) in the end, Wal-Mart will not lose on price...even if it sells product below cost, and b) winning on price is a strategy of last resort. We want to see Target win on assortment, or value-add, or customer experience, or some other factor that sets it apart from the competition. Once you go become a price leader, or attempt to, there's really no going back.


Deloitte Sees Holiday Sales Rising 4.5% as Incomes Gain



  • "U.S. retail sales may increase as much as 4.5 percent this holiday season, exceeding last year’s gain, as improving incomes and job prospects encourage consumers to open their wallets, according to Deloitte LLP."
  • "Sales, excluding purchases of motor vehicles and gas, may climb to as much as $986 billion in November through January, Deloitte, a New York-based consulting firm, said today in a statement. Holiday sales by that measure rose 2.8 percent last year, according to the company."


Takeaway: These forecasts are interesting, but we can't really use them. Deloitte historically has proven that it does not know how to forecast a sales number outside of a band of 3-5%. It was right in 2012, when sales in Nov/Dec grew by 3.6%. But its' 2013 forecast of 4-4.5% was a bust, with sales only growing 1.9%. Let's not forget that this group is part of the organization that is the auditor for a couple dozen major retailers, including Best Buy, Gap, Sears, Dick's, Nordstrom, Coach and Toys R Us.  We're not saying that results are compromised, but it's certainly not incentivized to tell the world that the holiday sales outlook is bad.





AMZN - In Germany, Amazon Keeps Unions at Bay



  • "German unions are accustomed to wielding formidable influence. Union officials sit on supervisory boards at blue-chip companies. They have a track record of wearing down foreign employers."
  • "Not so at Inc.  For the 16 years the online retailer has done business in Germany, it has shunned the nation's consensus-driven labor model. It ignores trade unions and largely dictates contract terms at its nine German distribution centers, where it employs about 9,000."


BBY - Best Buy Teams With Designers for Tech Accessories



  • "A new line of tech accessories — designed by Nanette Lepore, Anna Sui and Isaac Mizrahi New York — will be sold exclusively at all Best Buy stores.
  • The collections, which include smartphone, tablet and laptop cases, will launch at and Best Buy stores on Oct. 5 and are available for pre-order, beginning today."


Toys'R'Us to bolster workforce with 45,000 holiday hires



  • "As part of its holiday strategy, Toys"R"Us plans to hire 45,000 seasonal employees at its stores and distribution centers nationwide, more than doubling the company's workforce as it continues preparing for the highly contested shopping season ahead."


REI makes executive appointments



  • "REI announced that Annie Zipfel has been promoted to senior VP marketing. With her, REI will not hire a chief marketing officer as previously announced, but instead add a senior creative leader to the company."


EBAY - PayPal in partnerships with Bitcoin processors



  • "PayPal has made its first direct entry into the virtual currency space. The company announced via a blog post that it has entered into agreements with leading Bitcoin payment processors BitPay, Coinbase and GoCoin. The agreements let PayPal’s digital goods merchants in North America accept Bitcoin, with a simple integration through the PayPal Payments Hub."


RSH - Report: Major vendor won’t alter terms for RadioShack



  • "RadioShack Corp. has reportedly so far been unsuccessful in its efforts to convince an unidentified ‘major vendor’ to modify a commercial agreement in a way that could benefit a financial restructuring. According to the Wall Street Journal, RadioShack still has not identified the vendor or exactly what terms it wants to restructure, but has been negotiating with wireless carriers including AT&T and Sprint to ease the terms under which the retailer is allowed to resell equipment."


Victoria Beckham Unveils First London Store



  • "Victoria Beckham has built a dream space on Dover Street in London, her first store and 'second home' in Mayfair, where she can express her vision on the shop floor. The 6,040-square-foot space spans three floors, and has more in common with a contemporary art gallery than a typical London luxury flagship."


Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more