Here are SIGMAS for the companies reporting earnings over the next 24 hours. Every single one of them is bad.
WMT - Believe it or not, WMT is actually the prettiest of all the charts. Three of the past four quarters had down margins, and the sales/inventory spread is in decent shape. That said, once WMT gets to the point of 'easy comparisons' on the operating margin line, it will fail to 'comp the comp'. Due to investment in virtually every area of its business, margins should be down for at least another 2 years -- with or without a recession.
JWN - Here's a consensus short if there ever was one. Short interest has gone from 6% to a cycle high of 19% since Nov. It's probably warranted, however. JWN is the only department store that did not come out and preannounce weak holiday sales, and there's no reason to think that it bucked the negative trend put up by its peers. Furthermore, e-commerce numbers -- based on our analysis -- look horrible. And this matters a lot to JWN with e-comm at 21% of sales, vs peers at 10%. Furthermore, margins have been down, and inventories outgrowing sales for eight consecutive quarters -- and that was during an otherwise solid business cycle. While this is a crowded short, the consensus is likely directionally right on this one over a Trade and Trend duration.
CAB - This chart looks to us like Q3 is Cabela's center of gravity. It consistently tries to pull away into a better place on the SIGMA, but it ends right back in Q3. In the upcoming quarter, it goes up against that lone data point on the far right-hand side of the chart. We're not quite sure the Street is appropriately prepared for risk to the downside.
LZB - This is perhaps the ugliest chart. People tend to think that Quadrant 3 is the worst -- which is technically true. But the market usually recognizes Q3 more fully. In Quadrant 2, margins are still positive, but inventories are building, and management is likely clinging to hope that sales will rebound before dropping a bomb and taking down guidance. Good, proactive management teams usually revert immediately to Quad 4 (upper left) by way of lowering price and clearing the balance sheet. Everyone else reverts to Q3, and potentially stays there for a very long time (look at JWN chart above).
DSW - DSW acquires Ebuys, an online off-price footwear retailer with N.A. presence, for $62.5mm
Our Take: The DSW model is not scalable. When you rely on getting mass quantities of off-price fashionable shoes in a spectrum of colors and sizes that consumers actually want, it gets increasingly difficult to 'go-big' in growing the core. We generally don’t like deals, and have not analyzed this one. But at face value, this one actually makes sense.
AMZN - Amazon readies launch of own-label fashion brands
Our Take: Amazon has been selling apparel forever. It's simply been horrible at it. The private label brand makes a ton of sense to us for one reason -- mid-lower income consumers, people who have a body shape that makes them uncomfortable shopping in a store, and MOST IMPORTANTLY, penetrating non-US markets that are not as 'premium brand focused' as we are in the US.
RL - Ralph Lauren brings piece of supply chain in-house to manage distribution
W - Wayfair.com Names Sharif Sleiman Vice President of Supply Chain and Operations
KSS - Kohl's completes construction on 4,000-sq.-ft. showroom in Manhattan to show off 'latest fashions'
AMZN - Amazon acquires Indian payments processor as it expands into growing Indian Ecomm segment
AMZN - Foursquare is partnering with Delivery.com to offer grocery delivery through mobile app
PLCE - Former Children's Place CEO Ezra Dabah launches Kidpik after controversial split with the company
AdiBok - Black Yeezy Boost 350 pre-orders close in 22 minutes on Adidas' app
NKE - Nike converting NBA All-Star weekend pop-up store into permanent Jordan brand retail location in Toronto