TIF - Don't Fear the Reap-o
Share Repurchase -- 'Announcing' ≠ Lower Share Count
We're absolutely not concerned about being short TIF into the company re-upping its share repo authorization. For starters, 1) we're only talking $500mm, which is about 6% of the current market cap. This program is a drop in the bucket. 2) Next, just because a company announces a repo, it does not mean it will actually execute on it. 3) Lastly and most importantly, history does not lie. Over the past decade, TIF spent $1.1bn on share repo, and yet the share count only came down by 6.6mm, or 4.8%. The implied repo price per share comes out to $170, and yet the stock only poked its head above $100 fewer than a dozen times, and never broke $110. But the average implied repo price was $170?
The fact is that some companies, like GPS (which we don't like) use repurchases as an offensive weapon -- cutting it share count in half over a decade. TIF is not one of those companies -- as it basically uses the repo program as a way to offset dilution from options and other non-cash compensation.
NKE, ROST - Jumpman Ain't Dead
People are finding every way imaginable to jump on the 'Jordan is Done' bandwagon, and this report is the latest. The picture shows two pairs of Jordans on the rack. We're hard pressed to find them at any other stores. The reality is that this happens all the time, even for high end product. The shoes are likely damaged, or more likely, the boxes are damaged. That's usually the factor that results in Marquee shoes ending up in off price channels. Keep in mind that 'sneakerheads' value the box almost as much as they value the shoe. All it takes is a palette of 100 pairs of shoes to get wet, or the corner of the boxes crushed, and they are deemed unsellable in full-price channels. If there's anything unusual about this it is that they did not end up in Nike outlets. Our sense is that the retailer who deflected these kicks to Ross Stores will be getting an angry phone call from someone in Beaverton.
WMT - NLRB Judge declares Wal-Mart violated federal law when it disciplined employees after 2013 strike -- must rehire 16 former employees with backpay
BID - Sotheby's Board of Directors eliminates the Company’s $0.10 dividend effective immediately, and allocate the capital instead to repurchase shares.
M - Macy’s new omnichannel strategy, “Pick to the Last Unit”, lets stores act as “warehouses” to utilize the full assortment of owned inventory
WSM, RH Baby & Child - Pottery Barn Kids is unveiling its first nursery collection
CAB - Cabela's trying to sell credit card business, responsible for 30% of revenue, prior to selling to company
Richemont acquires remaining 40% of luxury watch and jewelry maker Roger Dubuis
DG - Dollar General Names Michael M. Calbert as Non-Executive Chairman of the Board to Replace Rick Dreiling