Retail Callouts (2/3): ICSC, TGT Store Growth, AMZN, RSH, ICON

Takeaway: ICSC disappoints against easiest compare in years. After departing Canada, TGT store plan faces the original challenge of driving US growth.

EVENTS TO WATCH

Retail Callouts (2/3): ICSC, TGT Store Growth, AMZN, RSH, ICON - 2 2 chart2

 

 

ICSC RETAIL SALES (80 General Merchandise Stores)

Takeaway: We expected a number far better than +3.7% this week given that it went against a weather-impacted week in 2014 that was the worst in 4-years. Despite the apparent strength, the 2-year trend actually decelerated by 50 bps for the week. The 3-year trend -- which eliminates all the noise -- actually decelerated in all but one week year-to-date.

 

Retail Callouts (2/3): ICSC, TGT Store Growth, AMZN, RSH, ICON - 2 3 chart1

Retail Callouts (2/3): ICSC, TGT Store Growth, AMZN, RSH, ICON - 2 3 chart3

 

 

COMPANY HIGHLIGHTS

 

TGT- Target Announces Store Growth Plans for 2015

(http://pressroom.target.com/news/target-announces-store-growth-plans-for-2015)

 

Takeaway: Every time we talk about TGT we have to put our accountability pants on. In the Black Book we put together in April of last year our research indicated that the company would never make money in Canada and would print $3.2bil in revenue in 2017, 40% below consensus. But we can't ignore what the stock has done since that point - which we can translate pretty easily in to 'We were wrong'. But, this announcement by the company glitzed and glammed by the PR department reminds us what TGT is working with in the US. The 15 openings equate to 0.4% sq. ft. growth in the US and -6% for the consolidated company if we include the discontinued Canada operations (it also ignored closed stores, which could be very well North of 15). As misguided as Steinhafel was in moving to Canada for growth, we have to ask what challenged internal growth forecast led TGT North of the border in the first place? It went from having a peer group where it had a notable competitive advantage, to putting itself right in the middle of four unique competitors – 1) WalMart, 2) Department Stores, 3) Dollar Stores, and 4) Supermarkets. As a bonus, it has Amazon.com hovering over its head plucking away every last sales dollar it can. We get the 'easy comp through 2Q' argument, but for a business trading at 17x earnings and 8x EBITDA on 2015 numbers that is stuck in the competitive set its built for itself, we think it's one of the most expensive names in retail today.

Retail Callouts (2/3): ICSC, TGT Store Growth, AMZN, RSH, ICON - 2 3 chart4

 

 

OTHER NEWS

 

AMZN - Amazon in Talks to Buy Some of RadioShack's Stores

(http://www.bloomberg.com/news/articles/2015-02-03/amazon-said-to-mull-buying-radioshack-stores-in-retail-expansion)

 

SPLS, ODP - Staples, Office Depot in Advanced Talks to Merge

(http://www.wsj.com/articles/staples-office-depot-in-advanced-talks-to-merge-1422937999)

 

TGT, WMT, GNC, WBA - Retailers Receive Cease and Desist Orders Over Herbal Supplements

(http://www.nytimes.com/interactive/2015/02/02/health/herbal_supplement_letters.html?_r=0)

 

RSH - NYSE Moves to Delist RadioShack

(http://www.wsj.com/articles/nyse-moves-to-delist-radioshack-1422919146)

 

AMZN - Report: Amazon pilots e-commerce sites with universities

(http://www.chainstoreage.com/article/report-amazon-pilots-e-commerce-sites-universities)

 

Topshop Reportedly Closes Japan Stores

(http://www.wwd.com/retail-news/specialty-stores/topshop-reportedly-shutters-all-japan-stores-8158060?module=Retail-latest)

 

TJX - The TJX Companies, Inc. Elects William H. Swanson to Board of Directors

(http://investor.tjx.com/phoenix.zhtml?c=118215&p=irol-newsArticle&ID=2012642)

 

LE - Lands' End names new CEO

(http://www.retailingtoday.com/article/lands-end-names-new-ceo)

 

ICON - Iconix Acquires Athletic Brand PONY In North America

(http://phx.corporate-ir.net/phoenix.zhtml?c=62075&p=irol-newsArticle&ID=2012916)

 

ICON - Iconix Announces Definitive Agreement To Acquire Strawberry Shortcake Brand

(http://phx.corporate-ir.net/phoenix.zhtml?c=62075&p=irol-newsArticle&ID=2012958)

 

LOW - Lowe's Names James H. Morgan To Board Of Directors

(http://phx.corporate-ir.net/phoenix.zhtml?c=95223&p=irol-newsArticle&ID=2012244)


GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

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