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A Quick Thought on Victoria's Secret "Free Shipping" | $LB

Takeaway: Hedgeye's Brian McGough thinks Victoria Secret's "free shipping" offer is a continuation of a trend that will plague the rest of retail.

Victoria's Secret (LB) has used the Free Shipping offer as an offensive weapon in the past (they were one of the first to do so, actually), but this is a continuation of a trend that we think will ultimately plague the rest of retail.


A Quick Thought on Victoria's Secret "Free Shipping" | $LB - vs3


While LB is a high-end brand with a very loyal customer base, we would note that even a powerhouse like Victoria's Secret can't easily absorb free shipping costs due to a relatively low average basket size.


It's high-ticket retailers like Nordstrom (JWN) and brands like Nike (NKE) and Ralph Lauren (RL) that could absorb shipping costs without a material hit to their margins. 


A Quick Thought on Victoria's Secret "Free Shipping" | $LB - vs2


Takeaway: RHP should report a solid Q3 and clarification of diluted share count will be welcome

Consensus estimates, management guidance and commentary, and questions for management in preparation for the earnings release tomorrow



Please see our note: http://docs.hedgeye.com/HE_RHP_EarningsPrep_11.3.14.pdf

KATE – Best Idea Flash Call (Wednesday)

Takeaway: KATE: Best Idea Flash Call Wednesday, 11/5 at 11:00am ET.

We’re hosting a Flash Call on Wednesday, November 5th at 11:00am ET to outline why we added KATE  to our Best Ideas list as a long. We’ll review, in detail, our thesis across durations (Trade, Trend and Tail) and will explore where the stock should go as well as where we could be wrong ahead of the company’s print (on Thursday the 6th).


Key Topics Will Include:

1) Bottom-up category growth model. Penetration and growth potential in handbags, apparel, footwear, accessories, etc…

2) Where KATE is in its store maturation curve, and the implied impact on comp. 

3) A look at earnings and profitability under a real reporting structure – one that we think it will adopt within 2-years – as opposed to the opacity that exists in the model today.

4) Property strategy relative to other brands, and cost implications.

5) Process by which KATE could jettison Jack Saturday.

6) Scenario analysis for updated guidance to long-term model – both the risk and the upside.

7) Where we could be wrong in having KATE as one of our Best Ideas on the long side.


Participant Dialing Instructions

Toll Free Number:

Direct Dial Number:

Conference Code: 213986#

Materials: CLICK HERE

investing ideas

Risk Managed Long Term Investing for Pros

Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.

Cartoon of the Day: #CurrencyBurning

Takeaway: This is going to get really ugly.

Cartoon of the Day: #CurrencyBurning - campfire cartoon 10.31.2014

Will Plunge In Oil Prices Crush Vladimir Putin and Russia?

Takeaway: Putin's got some major problems.

Russia remains one of our preferred country shorts on Oil Deflation. We shorted it last Thursday in Real-Time Alerts. Russian equities are in full-blown crash mode now down -22% year-to-date.


Our macro team is doing a lot of work right now on whether or not Japan and Europe opting to devalue will ultimately result in eventual Russian economic collapse.


It’s an important question to ask as oil trades below $80, and Vladimir Putin’s Russian budget is reportedly based on oil trading at $100.


Will Plunge In Oil Prices Crush Vladimir Putin and Russia? - 11.03.14 Oil vs. Russian Equities

*CALL TODAY AT 11AM: Will There Be An October Surprise? With renowned pollster Scott Rasmussen

We will be hosting a conference call today at 11:00am EDT with renowned pollster Scott Rasmussen to discuss the upcoming midterm elections.  


Mr. Rasmussen will provide a 30 minute presentation on potential election outcomes followed by an open Q&A moderated by Hedgeye Director of Research Daryl Jones.


Mr. Rasmussen was referred to by the Washington Post as "a driving force in American politics" and been called "America's insurgent pollster". He has widely been considered one of the more accurate pollsters in the nation and the one who is most in touch with subtle opinion shifts in the electorate.




  • What are the probable outcomes nationwide for both the Senate and House of Representatives?
  • Which races are most likely to end in surprise?
  • What are the implications of this election for politics, economics, and policy?
  • Post the results, what are the implications for the President and both parties in various outcome scenarios?



  • Toll Free Number:
  • Direct Dial Number:
  • Conference Code: 399212#
  • Materials: CLICK HERE (slides will be available approximately one hour prior to the start of the call)

Ping for more information.



Founder and president of Rasmussen Reports, Scott Rasmussen is a political analyst, New York Times bestselling author, public speaker and independent public opinion pollster. 


In 2012, Rasmussen became a New York Times bestselling author with his book The People's Money. His earlier books include Mad as Hell: How the Tea Party Movement is Fundamentally Remaking Our Two-Party System and In Search of Self-Governance.


Rasmussen and his firm have developed a reputation for delivering reliable, newsworthy and actionable public opinion data. Slate.com's Mickey Kaus declared in 2009, "If you have a choice between Rasmussen and, say, the prestigious N.Y. Times, go with Rasmussen." The Washington Examiner's Michael Barone calls him "one of America's most innovative pollsters." Pat Caddell and Doug Schoen, pollsters for Presidents Jimmy Carter and Bill Clinton, say that Scott has an "unchallenged record for both integrity and accuracy."


In 2008, Rasmussen projected then-Senator Barack Obama would win the presidential election by a 52% to 46% margin. Obama won 53% to 46%. In 2004, Rasmussen was within half a percentage point of the actual vote totals earned by both President Bush and Senator Kerry.


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