Retail & Wholesale

Macy’s and Nordstrom stocks rose 2.6% and 1.8% on Thursday. Mastercard SpendingPulse reported a 3.4% rise in US retail sales during the holiday season.

FedEx stock fell 1% yesterday on reports that Amazon is blocking third-party merchants from using FedEx’s Ground delivery services for Prime shipments.

Alibaba (BABA) has bagged the exclusive rights to stream media content from the English soccer club, Manchester United (MANU), in China.

Retail giant Walmart (WMT) had applied for a digital coin patent. The news comes just as Facebook (FB) is pushing for its own cryptocurrency, Libra.

The Dow Jones Index needs a Santa Claus rally this year. Instead, the Dow Jones might have to contend with the “Tariff Man.”

In our Get Real market newsletter, we saw trouble in China with the Hang Seng’s free fall and the Hong Kong Act. Plus, cannabis has declined in Canada.

CVS Health stock is up about 13% in November. Strong financial performance is driving the stock higher, but low earnings growth could limit further upside.

Gap (GPS) recently announced that it will start selling merchandise on Amazon.

Maverick Capital lowered its position in Baidu, Inc. in 3Q14. The position accounts for 0.36% of the fund’s total portfolio in the third quarter.

This restaurant industry does well when the economy is expanding and poorly when the economy is contracting. In other words, it’s cyclical.

Liberty Media Corporation owns interests in a range of communications and entertainment businesses. Recently, the company completed the previously announced spin-off of its cable business, Liberty Broadband.

OTPP added a new position in XPO Logistics Inc. (XPO) during the third quarter that ended in September. The position accounted for 0.46% of the fund’s total portfolio.

Lowe’s (LOW) operates in the home improvement retail industry. The company competes with a number of retail and wholesale players.

Lowe’s (LOW) has reported a positive trend in comparable store sales (XRT) for the past ten quarters.

One of the ways retailers can track their store performance is via productivity measures like sales and profitability per retail square foot.

Going omni-channel makes natural sense for both Lowe’s and Home Depot. Both retailers have a massive store network in the US, which can double as strategic fulfillment centers.

Historically, a large percentage of Lowe’s (LOW) capital expenditure (or capex) has been spent on new store rollouts.

Driving growth from sales to pro customers is a key growth opportunity for the world’s largest home improvement retailer.

The Home Depot’s (HD) focus on the pro customer allows the retailer to compete in the installations market and the product demand the services create.

The Rona (RON.TO) acquisition should give Lowe’s (LOW) a market-leading position in Canada’s home improvement market, estimated at over $45 billion Canadian.

Adverse foreign currency movements due to an appreciating US dollar have reduced Walmart’s top line by $12.3 billion in the last three quarters.

Wage costs are expected to be a headwind for Walmart. On February 20, Walmart made the second round of wage increases for over 1.2 million staff.

Costco posted record results for fiscal 2015. Revenue grew by 3.2% to $116.2 billion, and net income rose by 15.5% to $2.4 billion.

Costco has been able to steadily increase the renewal rate in the US and Canada from 88% in fiscal 2010 to 91% in fiscal 1Q16.

Costco has seen traffic growth averaging 4.3% per year in the period between fiscal 2009 and fiscal 2015. In fiscal 1Q16, club traffic rose by 3.5% YoY.

Target had upbeat revenue performance in fiscal 4Q16 and 2016. Store traffic was up by 1.3% YoY in fiscal 2016, trending in positive territory in all four quarters of the year.

It’s relatively easy to open a competing business like Target’s, though it’s harder to do it on the scale that the retailer presently enjoys.

Target opened 15 new stores in fiscal 2016. Its same-store sales rose 2.1%, with customer traffic at stores up 1.3%.

Target has identified four signature categories it’s concentrating on to provide higher store and web traffic and sales: Baby, Style, Wellness, and Kids.

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 (TGT) has been making improvements in its supply chain to cope with the additional demand posed by e-commerce and omni-channel retailing (RTH).

Target (TGT) spent $1.4 billion on capital expenditure in fiscal 2016, representing about 2% of sales.

Target’s flexible and smaller format stores could prove a cost-effective and capital-efficient way for it to reach customers in new markets.

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.

The growth rate in activewear or athleisurewear has outpaced the overall clothing market, with a double-digit CAGR over the past five 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.

Foot Locker (FL) has several key strengths. It’s the largest specialty retailer (XRT) of sporting goods in terms of US store count.

Yesterday, Macy’s (M) stock fell 10.9% after department store peer Kohl’s (KSS) announced weak third-quarter results and shared a gloomy outlook.

TJX Companies (TJX) reported better-than-expected earnings results for the third quarter of fiscal 2020, which ended on November 2.

Margins in the food and staples (XLP) retail segment are slender. It’s important for Walmart (WMT) to keep a tight grip on the cost structure.