• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here

    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

Not surprisingly another month of mixed results, with the split between upside/downside vs. expectations at 14 to 11 respectively.  Notable upside came from the “cap” (generally the larger, more relevant names making up the retail landscape).  

  • Upside: KSS, TGT, COST, JWN, ROST, TJX, AEO, ARO, GPS, BJ, LTD, BONT, ZUMZ
  • Downside: JCP, FDO, ANF, DDS, M, FRED, PLCE, BKE, WTSLA, SSI

Callouts:

  • The divergence between KSS positive performance and JCP’s negative 7.9% result continues to highlight 1) how KSS’ off-mall real estate strategy is inherently helping its traffic performance while JCP remains more of a hostage to the mall and sluggish traffic, and 2) how KSS’ offensive strategy in taking market-share from now liquidated Mervyn’s can help contribute to overall momentum.  Keep in mind that KSS’  will actually open 37 former Mervyn’s location later this month, which will accelerate profitable market share gains in the Southwest region.
  • COST reported a better same store sales result but importantly highlighted a second month in a row of improving non-food comps.  Hardlines performed slightly better than softlines, with key positive results coming from sporting goods, toys, seasonal, hardware, and domestics.  Overall, non-food categories posted slightly negative same store sales and marked the second month in a row of a sequential improvement.
  • With AEO and ARO both reporting slightly better than expected results, ANF continues to stand out the sole teen-retailer where momentum is not improving.  Despite reducing prices in attempt to be more competitive, same store sales consistently remain amongst the worst in all of retail.  While I noted earlier in the week that inventories at a local store were so thin there were bare shelves, I’m beginning to wonder if now the problem isn’t just price perception.
  • GPS reported better than expected results driven by strength at Old Navy and a sequential improvement at Gap stores.  Even with years of negative comp compares, it appears that marketing and merchandising efforts are beginning to take hold.  Old Navy’s back to school marketing campaign was a key driver of the division’s +4% result for the month.  Gap’s re-launched denim was also well received, especially in the women’s category. 

SSS Initial Take - 1 year SSS 9 09

SSS Initial Take - 2 year SSS 9 09