02/11/15 09:21 AM EST

Retail Callouts (2/11): UA, FL, PIR, RH, AMZN, CHS

Brian McGough

@hedgeyeretail

Alec Richards

@HedgeyeEnergy

Jeremy McLean

@HedgeyeRetailJM

Takeaway: UA & FL leveraging Steph Curry into NBA All-Star Weekend. PIR - No read through to RH. AMZN slowing on ChannelAdvisor comps.

EVENTS TO WATCH

COMPANY HIGHLIGHTS

UA/FL - UnderArmour and Foot Locker Go Viral

UA and FL are promoting a series of short videos centered around its basketball footwear business, and more specifically, Stephen Curry -- arguably the brand's most marketable asset in the sport. The segments pit Curry against a series of opponents in a 3-point competition. As amazed as we are with the talent of 9-year old Jaden Newman, we're a bit surprised UA would put her up against Curry. But truth be told, her killer performance supports what UA stands for -- that the little guy (or gal, in this instance) has the right to compete, and win.

The notable thing from our perspective is that this is extremely cheap advertising for UA, but more important is that they are partnering with Foot Locker. That said, Foot Locker is not prominently positioned in the ads. And furthermore, when you go to the FL dot.com site, you have to click five times to get past all the Nike's to get to UA shoes. Maybe that changes on Friday when UA releases the latest Curry shoe in advance of the All Star Game -- but then again, Nike will probably release 30 shoes on that same day.

One other point we'd note is that any shoe that launches at Foot Locker will ALSO be available at underarmour.com and at UA stores. It looks like FL is buying the right to get the exclusive vs Finish Line, etc...

This is definitely notable in that co-op credits have been trending lower for FL -- that is, the ad expense that have been funded by the footwear brands. This campaign supports our view that vendor support will continue to dwindle, which will pressure the P&L. That's probably the 10th reason out of ten why we are bearish on FL...but it's another small development in the short thesis.

PIR - FY 2014 Guided Down, CFO Leaving

Takeaway: The stock was up 22% since the company reported earnings on 12/18 and 15% since the company posted Holiday comps 190bps ahead of the street. And then…the market closed and the bottom fell out after the company guided the top end of the EPS range down 22%. This appears to be completely self inflicted and there is a body count to prove it.

More importantly as it relates to RH (our favorite idea) --

We never liked PIR as a comp, but given the small cadre of names in this industry that trade on the capital markets it's something we have to live with. It's a completely different customer group and the decorative/furniture split is 60/40. It's the inverse at RH.
This isn't endemic to the industry. Simply the case of a management team misunderstanding the business model. We don't expect that the market will beat RH up over this, but if they do it's a name we still like a lot up here. The company is on track to grow revenue by 30% and EPS by 50% in 2015.

AMZN, EBAY - 2year Slowdown for AMZN, Acceleration for EBAY

Takeaway: Amazon sales in January were +27%, but against an easy comp the 2 year continued the downward trend from the August peak. These comp numbers are composed of a large sample of 3rd party AMZN and EBAY sellers. One thing we can't ignore is AMZN's decision to incorporate items sold by 3rd party sellers into its free shipping minimums. Our guess is that the company is looking at the same chart we are.