EVENTS TO WATCH
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.
TGT- 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.
AMZN - Amazon in Talks to Buy Some of RadioShack's Stores
SPLS, ODP - Staples, Office Depot in Advanced Talks to Merge
TGT, WMT, GNC, WBA - Retailers Receive Cease and Desist Orders Over Herbal Supplements
RSH - NYSE Moves to Delist RadioShack
AMZN - Report: Amazon pilots e-commerce sites with universities
Topshop Reportedly Closes Japan Stores
TJX - The TJX Companies, Inc. Elects William H. Swanson to Board of Directors
LE - Lands' End names new CEO
ICON - Iconix Acquires Athletic Brand PONY In North America
ICON - Iconix Announces Definitive Agreement To Acquire Strawberry Shortcake Brand
LOW - Lowe's Names James H. Morgan To Board Of Directors