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Takeaway: NKE product flow issues. Free shipping across the board in 18-24mo. M growth strategy not a ringing endorsement of dept. store environment.


Retail Callouts (4/27): NKE, KSS, TGT, JWN, M, JCP, FL - 4 27 chart2


NKE - Nike Delays Online Releases for Several Upcoming Models 


Takeaway: This struck us as a little strange. And maybe it's just the cost of having a greater presence online. The fact is that Nike deals with product flow issues all the time. But, with consumers becoming more dependent on the Nike site, mobile app, and retail stores -- these types of issues become a lot more visible to the consumer. Nike was pretty cagey in how it dealt with the delay, but it seems to be a short term hiccup in sourcing rather than a statement about the company's e-comm direct capabilities.

Retail Callouts (4/27): NKE, KSS, TGT, JWN, M, JCP, FL - 4 27 chart3

Free Shipping: Retail’s New Battleground


Takeaway: Free shipping = an offensive weapon for retailers to gain market share. We've seen it used sporadically from players in the department store/mass channel. Most notably Target who over the Holiday eliminated the free shipping threshold all together, and then in February cut its free shipping  threshold from $50 to $25. Over the next 18-24 months it's likely we see free shipping across the board. That will manifest itself during this Holiday season when retailers make a free shipping offensive play.

We've seen retailers, most notably KSS, talk about how a $25 shipping threshold isn't sustainable from a profitability perspective. We agree with the company on that. For Nordstrom, it makes sense to offer free shipping and returns given the basket size, but for the mid-tier space...it's bps dilutive. The problem is that a) consumers want it (in chart below its nearly 2x as important as any other online shopping feature), and b) if one domino falls, all others will have to move accordingly.

Retail Callouts (4/27): NKE, KSS, TGT, JWN, M, JCP, FL - 4 27 chart1

M - Macy’s Bag of Tricks for Growth


Takeaway: Add an 8,000 sq. ft. specialty concept in mid-tier markets to the list of new initiatives at M. Along with an off-price concept and the acquisition of Blue Mercury, we have to wonder what M sees in the department store space that would make these new initiatives attractive. Not a ringing endorsement from a company who has long been considered the best in breed. We bumped Macy's down from the core short list to the bench a few weeks back. This one is all about timing. We still think that the group (including M) will see a 1000bps sequential deceleration in growth. But for the next few months the catalysts are likely positive. And with M, unlike KSS or JCP, there's real estate value support.


KSS - Kohl’s keeps up with Apple Watch app


FL -  New TV Spot Featuring Manny Pacquiao


AMZN - Amazon comes to your wrist


TGT - Target, Sports Authority to carry folding bikes


ANF - A&F Drops ‘Sexualized’ Marketing


The Great One joins Sears Canada brand team


Retail sales surging at O’Hare Airport after redevelopment