• It's Here!

    Etf Pro

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

  • It's Here


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

Takeaway: JCP Nov/Dec sales - marketshare gains from KSS to continue. CK adding the Biebs, far cry from Marky Mark. NKE e-mail promos.


Thursday (1/8)

FDO - Earnings Call: 10:00am

BBBY - Earnings Call: 5:00pm


JCP - November/December period up 3.7 percent


Takeaway: Optically the number looks solid for JCP, though we could argue that a 3.7% comp isn't good enough for a retailer who ceded $5bil in sales and has productivity levels 45% below peak. But in light of the expectations it was enough to get the stock moving +20% after hours. The only other point of contention we'd flag here is the lack of commentary on gross margins - though for JCP it's less of an issue with GM 1000bps below historical levels. Any way you slice it, it's a big improvement from the "pleased with its performance for the holiday period" press release from LY.

This marks 5 quarters now where JCP comps have been better than negative and it also is the first quarter where it laps market share gains from both M & KSS. Over the past 4, JCP has outperformed M and KSS on the comp line by an average of 0.7% and 3.4% respectively (see chart below). Our research, which includes a number of surveys on the topic, shows that KSS was the biggest beneficiary of JCP's lost market share gaining over $1bil in sales. JCP is just starting to take that back – they’ll either earn it, or they’ll buy it (through discounting). Either way it’s bad for KSS.

Lastly on January - we did that math to see what the implied comps looked like for each of the three retailers during the month and there is no question comps look easy. The scorecard looks like this: JCP -3.8%, KSS -7.8%, and M -10.2%. But it's important not to lose sight of 1) the month represents ~15% of the top line in the quarter and 2) M & KSS were comping against 11.7% and 13.3% comps respectivley in January of FY12.

Retail Callouts (1/7): JCP, KSS, M, PVH, NKE, UA - 1 7 chart1

PVH - Calvin Klein Signs Justin Bieber, Baby


Takeaway: The 2 or 3 Bieber fans left out there that The Bieb did not alienate and/or offend can sleep well knowing that he'll be synonymous with the CK Brand. Seriously, what is PVH thinking? There is very likely a large number of potential male CK Underwear consumers that won't touch the brand given Bieb's affiliation. The teeny-bopper crowd has grown out of him. Adult women generally don't find him appealing. Men hardly view him as being 'masculine' or fashion-forward. And his music is no longer relevant.  We hope that PVH did a lot of market analysis on this one and has enough data to prove us wrong. But this sounds like a really bad idea. If all else fails, maybe CK can sell a lot of underwear and jeans in Canada.

Retail Callouts (1/7): JCP, KSS, M, PVH, NKE, UA - 1 7 chart2

NKE - Rare Email Promo

An extremely rare promotional email directly from Nike with many items on the site on sale. The company is in the process of transitioning out of Holiday and into Winter, so this makes sense. But the point is it previously used its outlets as the primary clearance channel. For what it's worth, Nike's promo emails look tight and brand-relevant -- which is a far cry from the emails of its wholesale partners.

Retail Callouts (1/7): JCP, KSS, M, PVH, NKE, UA - 1 7 chart3


UA - Under Armour Launches UA Record™, the Latest Addition to the Definitive Digital Health and Fitness Network


Chris Burch Shutters C. Wonder Operation


Federal mediators join West Coast ports dispute


GME - GameStop swaps customer gift cards


SWY - Safeway to pay $9.87 million for environmental violations