Phalguni is a retail analyst at Market Realist. Phalguni has had 9 years’ experience in Canada, Dubai, and India, and has worked in Analyst roles at Great Canadian Gaming Corp., Dubai World, Lusight Research, TradeBriefs, and Global Education Management Systems. Phalguni has completed the CFA program. She received a degree in Commerce from the University of Calcutta and was placed at the top of her class.
Disclosure: I am in full compliance with all ethics and other policies for Market Realist research analysts. I am not invested in securities that I cover on Market Realist.
The stock prices of Target and CVS Health rose seven sessions in a row, from June 15–June 23. The pharmacy sale announcement by both companies resulted in a positive reception by the markets.
In 2013, the company had 117 factory-house stores and 6 brand stores in North America. Store rollout is up and is expected to be stronger going forward.
Dr. John Williams, president and CEO of the San Francisco Fed, spoke on the normalization of monetary policy and monetary tightening in a presentation to the Association of Trade & Forfaiting in the Americas in San Francisco on Thursday, May 22.
After posting adjusted EPS growth rates exceeding 20% in the first three quarters of fiscal 2016, the earnings expectations for Nike (NKE) in the fourth quarter are modest.
Nike (NKE) is expected to post sales of $8.3 billion in fiscal 4Q16, an increase of 6.4% year-over-year, according to the Wall Street analysts’ consensus.
In fiscal 2017, Foot Locker’s management expects the company to post double-digit growth in EPS (earnings per share). Wall Street analyst consensus is adjusted EPS of $4.73.
Foot Locker (FL) stock has been one of the strongest performers in the retail industry group. The company has generated total annualized returns of 20.5% over the past five years.
As part of its long-term plan, Foot Locker (FL) has been concentrating on enhancing its profitability margins and focusing on store remodels and improved service and product assortment.
Foot Locker (FL) operates several e-commerce websites under the Foot Locker and other store banners. It reports e-commerce sales under the direct-to-customer segment.
Foot Locker has been steadily closing down or converting its existing Lady Foot Locker stores to the new SIX:02 concept. Currently, there are 30 SIX:02 stores in FL’s retail base.
In fiscal 2016, Foot Locker made $5.3 billion in US sales, representing 71.6% of its total revenue. In contrast, international revenue came in at $2.1 billion.
Foot Locker is primarily a mall-based athletic goods specialty retailer. The company operates several store formats, depending on the product, customer demographic, and geography.
It’s easy for customers to switch between sporting goods retailers. Specialty retailers (XRT) compete on product exclusives, assortment, price points, and customer experience.
In this part, we’ll look at industry forces affecting sporting goods retailers. We’ll also look at Foot Locker’s competitive positioning based on Porter’s Five Forces
In this series, we’ll analyze Foot Locker’s business, market positioning, and revenue and expense outlook. We’ll also look at investments being made to spur growth.
Skechers’ performance is typically unevenly distributed during the year due to seasonal factors. Its first and third quarters are usually its strongest.
Skechers is quickly establishing its presence in international markets. It made $3.1 billion in sales in 2015, of which 40.4% stemmed from overseas markets.
Skechers has been able to steadily increase its profitability and margins over the past five years. The company’s net income margin rose to 7.4% in 2015.
Skechers grabbed the number two spot in the US footwear market last year. The company’s brands were also ranked number one in walking and work footwear.
China has been an important element in Skechers’ success in international markets. Sales from China rose to $220 million in 2015 from $86 million in 2014.
In recent years, Skechers has reported improved working capital metrics. The company’s inventory turnover (or ITR) rose from 2.9x in 2013 to 3.2x in 2015.
Athletic footwear brand Skechers operates around 525 company-owned retail stores around the world. Of these, around 395 are located in the United States.
Skechers (SKX) products are sold in about 160 countries. The company’s international wholesale segment was its fastest-growing segment from 2011 to 2015.
Since the launch of its first line in 1992, Skechers has diversified into several new lines, targeting different demographics and different activities.
Based on Lululemon Athletica’s (LULU) healthy sales performance in fiscal 1Q17, the company has raised its sales and earnings per share outlook for the year.
Walmart (WMT) hopes to leverage its Yihaodian e-commerce business in China, which could drive higher sales for its clubs and superstores. So far, the company lacks broad-based retail penetration in China.
Walmart’s (WMT) Neighborhood Markets format stores, which average 42,000 square feet in size, have shown considerable resilience and sales traction over the past few years.
Supercenters are more likely to double as fulfillment centers as Walmart widens its omni-channel capabilities. They are likely to provide the company with economies of distribution.
Lululemon Athletica’s (LULU) management expects its fiscal 2017 diluted earnings per share to come in at $2.05–$2.15, an implied growth rate of 10.2%–15.6% year-over-year.
Costco also reported better-than-average growth in e-commerce sales. Costco’s online sales grew by 14% year-over-year on a reported basis and by 13% on a comparable basis.
On May 25, 2016, Costco Wholesale (COST) declared its results for fiscal 3Q16. Although Costco’s performance was mixed, the retailer beat the consensus Wall Street analysts’ adjusted EPS estimate by $0.02, or 1.6%.
Home Depot offers its customers several omnichannel options. The strong execution across channels is a valuable differentiator for the company compared to the competition.
The growing trend toward more casual apparel at work, higher sports participation, and more fitness activities for women is fueling a boom for activewear.
The athleisurewear category has had a boost from higher interest in physical well-being globally and by increased participation by women in sports and other fitness activities.
Under Armour raised the higher end of its 2016 operating income estimate to $503 million–$507 million, implying a growth rate of 23.1%–24.1% over 2015.
Under Armour (UA) has increasingly looked to “premiumize” its product line. Its signature Curry Two shoe retailed $10 higher than the Curry One and still experienced very strong sell-through.
Under Armour has added 250 shop-in-shops in Europe with retail partners as well as points of distribution in north and south Africa, the Middle East, and Turkey.
Under Armour’s (UA) international sales grew 55.6% to almost $150 million in 1Q16. Sales growth in overseas markets came in at 64.6% in currency-neutral terms.
Under Armour’s (UA) footwear business registered an impressive 64.2% growth (VUG) rate in 1Q16 versus 1Q15. Footwear sales came in at $264 million in the quarter.
According to the Wall Street analyst consensus, Under Armour is expected to post revenues of $1.04 billion in the quarter, an increase of 28.8% over 1Q15.
Target’s business model has been tested over several economic cycles. Even during the recession in 2008–2009, it managed to raise its dividend per share.
Target operates 1,792 stores in the United States under multiple store formats. Its merchandise assortment differs by store, store location, and store size.
Target has identified four signature categories it’s concentrating on to provide higher store and web traffic and sales: Baby, Style, Wellness, and Kids.
Lululemon (LULU) stock rose 10.7% to $67.80 on March 30, 2016, the day the company declared its fourth quarter results. The stock has risen more than 29% year-to-date.
Over the next five years, Lululemon Athletica (LULU) is aiming to double its revenue to $4 billion with an expected mid-single-digit growth rate in store comps.
In fiscal 2017, Lululemon Athletica (LULU) expects to grow revenue 10.9%– 13.3%, or $2.29 billion–$2.34 billion. Same-store sales growth is expected in the mid-single-digit range.
E-commerce was one of the reasons Lululemon Athletica (LULU) had an upbeat performance in fiscal 2016. It posted e-commerce sales of almost $402 million, a 25% increase year-over-year.
Lululemon Athletica’s (LULU) revenue grew by 14.7% year-over-year to $2.1 billion, a new milestone for the company. In fiscal 4Q16, Lululemon’s sales grew 16.8% to $704 million.
Lululemon (LULU) stock rose 10.7% to $67.80 on March 30, 2016, the day the company declared its fourth quarter results. The stock has risen more than 29% year-to-date.
Nike’s profitability in fiscal 3Q16 was helped by better-than-average performance in North America and Greater China, two of its most profitable segments.
Nike saw $1.2 billion in e-commerce sales in fiscal 2015. It grew its e-commerce sales by 56% in fiscal 3Q16, reporting higher traffic and conversion rates.
In order to mitigate the impact of these higher costs, Walmart is investing considerably in pricing via its everyday low prices and everyday low costs loop.
On March 15, Walmart’s executive vice president provided an investor update at the Bank of America Merrill Lynch Consumer & Retail Tech Broker Conference.
