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Takeaway: COST beats but facing FX & gas price headwind. Jordan Flight 23 coming to Chicago. WMT making healthcare changes.

EVENTS TO WATCH

Thursday (10/9)

FDO - Earnings Call: 5:00pm

COMPANY HIGHLIGHTS

COST - 4Q14 Earnings

Retail Callouts (10/8): COST, NKE, WMT, WWW, JCP - 10 8 chart1

Takeaway:  Slight beat in the quarter both on the top and bottom line. Monthly sales numbers for September came in at 6% (FX & Gas adjusted) - that marks the 7th straight month of 5% or better comp growth. But, the reported comp was 200bps lower due to a stronger USD (+7% YY) and gas prices (average price per gallon -2% to -3%). That will be a headwind going forward.

FL, NKE - Jordan-brand-only Flight 23 store coming to Chicago

(http://www.chicagotribune.com/business/ct-flight-23-footaction-1008-biz-20141007-story.html?dssReturn&z=10549)

  • "Flight 23 at Footaction, a Jordan Brand-only store that debuted this year in New York, plans to open a 36,000-square-foot retail store in the space in June 2015, property owner Thor Equities said."

Takeaway: At 36,000 feet this new door in Chicago seems massive for Brand Jordan, but it's only a few thousand square feet larger than the new UA door moving in down the street. Both brands are now over $2bil in revenue and growing. These new footprints allow the brands to showcase the goods in a mono-branded format and over all we think it’s a good opportunity. Especially for NKE. Partnering with Footaction is a pretty savvy move. FA is marginal at best, and they'll do whatever Nike wants -- and they'll probably pay for a disproportionate amount of the start-up costs. Nike will handle the merchandise and branding. Footaction will sit back, write checks, and let Nike do its thing.

OTHER NEWS

WMT - Wal-Mart to End Health Insurance for Some Part-Time Employees

(http://online.wsj.com/articles/wal-mart-to-end-health-insurance-for-some-part-time-employees-1412694790)

  • "Wal-Mart Stores Inc. is cutting health insurance for another 30,000 part-time workers and raising premiums for its other employees, as U.S. corporations push to contain costs in the wake of the federal health-care law."
  • "Autumn is typically when U.S. companies unveil changes to employee insurance plans. This is the first such enrollment period since employers could assess the full financial impact of the federal health-care overhaul, and it is a key moment as companies work to lower their spending ahead of looming taxes on the most generous plans."
  • "Several other retailers already have moved away from providing health insurance to part-time workers. Target Corp. earlier this year said it would stop offering such benefits, citing options available through public exchanges. Home Depot Inc. last year ended health-care coverage for almost 20,000 part-time workers, while United Parcel Service Inc. cut coverage for workers’ spouses who had access to insurance through their own employers.

WMT - Walmart Introduces Cancer Care Benefits for Associates at Mayo Clinic

(http://news.walmart.com/news-archive/2014/10/07/walmart-introduces-cancer-care-benefits-for-associates-at-mayo-clinic)

  • "Building on its innovative program that has enhanced the quality of health care for its associates, Walmart announced it is expanding its Centers of Excellence program to include three cancers with Mayo Clinic, one of the nation’s leading health care providers."
  • "Effective Jan. 1, 2015, Walmart associates and family members enrolled in the company’s health reimbursement account plans or health savings account plan who are diagnosed with breast, lung or colorectal cancer can obtain a review of their medical records by Mayo Clinic, and when recommended, receive care covered at 100 percent for on-site visits at Mayo Clinic Cancer Center locations in Rochester, Minn., Jacksonville, Fla., or Phoenix, Ariz."

WWW - Wolverine Worldwide Appoints Melissa Howell Senior Vice President of Global Human Resources

(http://phx.corporate-ir.net/phoenix.zhtml?c=88408&p=irol-newsArticle&ID=1974955)

  • "Wolverine Worldwide announced the appointment of Melissa A. Howell to the position of Senior Vice President of Global Human Resources. Ms. Howell will report directly to Blake Krueger, Wolverine Worldwide's Chairman, Chief Executive Officer and President."
  • "Ms. Howell has more than 24 years of experience in human resource management with General Motors Company, one of the world's largest automobile companies, with well over 200,000 employees in over 150 countries.   Ms. Howell most recently served as Senior Vice President of Global Human Resources and also held numerous other human resource leadership roles during her time with the company."

JCP - B. CRAIG OWENS TO JOIN JCPENNEY BOARD OF DIRECTORS

(http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-newsCompanyArticle&ID=1975229)

  • "J. C. Penney Company, Inc. today announced that B. Craig Owens, a highly accomplished and respected executive in the consumer food and beverage industry, has been elected to its Board of Directors. Mr. Owens recently retired from his post as chief financial officer and chief administrative officer of Campbell Soup Company, where he led its finance, supply chain and information technology organizations."


DG - Dollar General rolls out digital coupons program

(http://www.retailingtoday.com/article/dollar-general-rolls-out-digital-coupons-program)

  • "Dollar General’s new Fast Way to Save program, which runs from now through Nov. 15, uses the retailer’s new DG Digital Coupon platform powered by Coupons.com to offer its customers more than 100 in additional digital coupon savings."

Tesco asks another senior executive to step aside

(http://www.ft.com/intl/cms/s/0/da0ae8d6-4de6-11e4-adfe-00144feab7de.html?siteedition=intl#axzz3FYGAJFFv)

  • "Tesco has asked a fifth senior executive to step aside as it probes an estimated £250m overstatement of its expected profits."
  • "The development came as shares in Tesco rose almost 5 per cent on buyer interest in Dunnhumby, the data consultancy that helped Tesco create its Clubcard loyalty scheme. Several private equity and trade buyers are interested in the business, which is now wholly owned by Tesco and could be worth up to £2bn, according to people familiar with the situation."