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Takeaway: One Bright Spot In Retail Sales Print = Home Furnishings. WMT closing Super Centers. First time in 10 years.

One Bright Spot In Retail Sales Print - Home Furnishings

Headline miss ex. autos of 40bps with the discretionary bucket ex food, gas, and auto decelerating on a 1yr, 2yr, and 3yr basis. But, there was one bright spot and that was in Furniture and Home Furnishings which accelerated on a 2yr basis by 240bps against a tough comp in December of 2014.

Let's be clear as it relates to RH. We think the market opportunity for the company as it scales up its store base, expands its category collection and consolidates a highly fragmented market on the top end of the consumption period is much greater than the MSD category growth we saw throughout the year.

But, it does lend some support to category strength in spite of the commentary out of just about every CEO who competes in the space about the highly promotional/competitive environment. It's the 2nd positive data point we've seen since Holiday about strength in the category. Mastercard called out the category as the most positive in its 7.9% retail sales number.

If we look at it over a longer duration, Furniture and Home Furnishing sales are sitting 10% below its 2006 peaks compared to total retail sales which are 15% higher than 2008. We'd be much more concerned about the space if we were sitting at all time highs.

HedgeyeRetail (1/15)  |  1 Retail Sales Bright Spot, WMT Store Closures - 1 15 2016 chart1

HedgeyeRetail (1/15)  |  1 Retail Sales Bright Spot, WMT Store Closures - 1 15 2016 chart2

WMT - Walmart announces plans to close 269 stores globally -- 154 in U.S. and 115 abroad


Look at the WMT timeline in 2015 with the benefit of hindsight. Raise minimum wage across the employee base to $10, took earnings guidance to a point where we won't see 2015 earnings levels again until at least FY19. Now the company plans 269 store closures after a previously announced strategic review. 154 of those are in the US, with all of the 102 WMT Express doors being shuttered for good. That leaves 52 Super Center/ Neighborhood Market closures, the most in this economic cycle by far. In fact, WMT hasn't closed a Super Center since FY07 (calendar '06). If you want evidence that the US is at capacity from a square footage perspective, especially in the big box format look no further than this WMT release and, to a lesser extent, the 40 doors M intends to close which is 4x a normal year.

NKE - Nike Reaches $252 Million Deal to Extend Sponsorship at Ohio State




AMZN - Amazon Receives Ocean Freight License to Ship Packages From China By Sea


AMZN - Amazon Opens New 3500 sq ft Pickup Location at UC Berkeley


VNCE - Vince Names David Stefko Chief Financial Officer


E-commerce fulfillment costs for retailers still rising as UPS, FDX, USPS raise rates


LOW - Lowe's announced today that it's getting ready to hire 46,000 seasonal employees to help with the busy spring and summer season.


TIF - Luxury brand sales are slowing in Hong Kong, Paris

A decline in tourism amid Paris attacks, volatile currencies and political tensions hurt spending in key shopping destinations

HedgeyeRetail (1/15)  |  1 Retail Sales Bright Spot, WMT Store Closures - 1 15 2016 chart3


AdiBok - CCM Hockey reports 8% increase in equipment business in 2015, 18% sales growth over past 2 years


AdiBok - Designer Ronnie Fieg designs new Adidas shoes -- they are 'doomed'

HedgeyeRetail (1/15)  |  1 Retail Sales Bright Spot, WMT Store Closures - 1 15 2016 chart4