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Optical retailer Warby Parker soon opening in Ridgedale Center

Low-cost eyeglasses retailer Warby Parker is opening a new location at Ridgedale Center in Minnetonka.  The new store will likely open in the spring on the ground floor of the mall, directly across from the Apple Store and near Nordstrom, a company spokesperson confirmed Tuesday. Warby Parker sells a variety of eyewear and contact lens brands, including its own brand of contacts, Scout by Warby Parker. The Ridgedale store doesn’t plan to offer eye exams, according to the company's website. New….....»»

Category: topSource: bizjournalsJan 24th, 2023

Boot Barn (BOOT) Q3 Earnings Meet, Revenues Increase Y/Y

Boot Barn's (BOOT) revenues and earnings meet the consensus mark for third-quarter fiscal 2023. The bottom line falls from the year-ago quarter's level. Boot Barn Holdings, Inc. BOOT came up with third-quarter fiscal 2023 results wherein the top and the bottom line matched the Zacks Consensus Estimate.This lifestyle retailer of western and work-related footwear, apparel and accessories posted adjusted earnings of $1.74 per share for the fiscal third quarter, meeting the Zacks Consensus Estimate. The bottom line plunged from $2.27 a share reported in the year-ago period.This presently Zacks Rank #3 (Hold) stock has increased 19.9% in the past six months compared to the industry’s 16.6% growth.Let’s IntrospectNet sales of $514.6 million were in line with the Zacks Consensus Estimate. However, the metric rose 5.9% year over year owing to the incremental sales from stores opened in the last twelve months, partly offset by lower consolidated same-store sales. Higher average unit retail prices, somewhat driven by inflation, also added to the net sales.Image Source: Zacks Investment ResearchConsolidated same-store sales dipped 3.6% with retail store same-store sales slipping 0.8% and e-commerce same-store sales plunging 15.2%. How Margins FareGross profit of $187.8 million fell 2% from the prior-year period’s level on increased freight expenses and merchandise cost. The gross margin decreased 290 basis points to 36.5% on account of 190 basis points decline in merchandise margin, and 100 basis points deleverage in occupancy and distribution center costs. Merchandise margin dipped on 180 basis-point headwind from higher freight expense.Income from operations of $72.5 million plunged from $92.2 million in the year-ago quarter. The The operating margin tumbled 490 basis points to 14.1%.A Sneak Peek into Other MetricsDuring the fiscal third quarter, Boot Barn Holdings opened 12 stores, taking the total count to 333 stores as of Dec 24, 2022. For fiscal 2023, BOOT anticipates opening 43 stores.Boot Barn Holdings ended the quarter with cash and cash equivalents of $50.4 million and a stockholders’ equity of $729.2 million. At the end of the quarter, BOOT had a $59.1 million balance drawn on its $250 million revolving credit facility.For fiscal 2023, management envisions capital expenditures of $90-95 million.OutlookManagement projects total sales of $1.67-$1.68 billion, indicating growth of 12.2-12.9% versus the prior year. Same-store sales range of about 0.5-1%, with retail store same-store sales of 2.5-3.0% and e-commerce same-store sales of (10.5)% to (9.5 )%.It anticipates a gross profit of $611-615 million or 36.6% of sales. Gross profit consists of an expected 140 basis point decrease from freight expenses, somewhat offset by 40 basis points of product margin expansion. Income from operations is anticipated between $228 million and $232 million, representing about 13.7-13.8% of sales. Boot Barn envisions a net income of $5.51-$5.60 per share.Fiscal 2023 is a 53-week year. Boot Barn Holdings predicts delivering nearly $34 million of sales and earnings per share of 19 cents in the 53rd week.For the fiscal first quarter, management expects same-store sales growth of (3)% to (0.5)% and total sales of $438-$448 million. Retail store same-store sales are likely to be flat to 2% growth and e-commerce same-store sales of (20.0)% to (16.0 )%. Further, gross profits are expected between $156 million and $160 million, or nearly 35.7% of sales. Gross profit comprises an estimated 290 basis point decline from freight expenses, somewhat offset by 40 basis points of product margin expansion.Income from operations is expected between $59 million and $63 million, accounting for nearly 13.5-14% of sales in the fourth quarter. Boot Barn envisions net income of $1.42-$1.51 per share for the quarter.Solid Picks in RetailWe highlighted three top-ranked stocks, namely Tecnoglass TGLS, Chico's FAS CHS and Capri Holdings CPRI.Tecnoglass manufactures and sells architectural glass, windows and aluminum products for residential and commercial construction industries. TGLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and EPS suggests growth of 11.2% and 9%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.Chico's FAS, an omnichannel specialty retailer, currently sports a Zacks Rank of 1. CHS has a trailing four-quarter earnings surprise of 87.5%, on average.The Zacks Consensus Estimate for Chico's FAS’s current financial-year sales and EPS suggests growth of 19.6% and 127.5%, respectively, from the year-ago reported figures.Capri Holdings, a global fashion luxury group of iconic brands like Versace, Jimmy Choo and Michael Kors, carries a Zacks Rank of 2 at present.The Zacks Consensus Estimate for Capri Holdings’ current financial-year sales and earnings per share suggests growth of 0.9% and 10.5%, respectively, from the corresponding year-ago tallies. CPRI has a trailing four-quarter earnings surprise of 21%, on average. Free Report: Must-See Energy Stocks for 2023 Record profits at oil companies can mean big gains for you. With soaring demand and elevated prices, oil stocks could be top performers by far in 2023. Zacks has released a special report revealing the 4 oil stocks experts believe will deliver the biggest gains. (You’ll never guess Stock #2!) Download Oil Market on Fire today, absolutely free.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chico's FAS, Inc. (CHS): Free Stock Analysis Report Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report Tecnoglass Inc. (TGLS): Free Stock Analysis Report Capri Holdings Limited (CPRI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 26th, 2023

Tractor Supply"s (TSCO) New Distribution Center to Aid Growth

Tractor Supply's (TSCO) latest distribution center is likely to help support its expansion plans and serve the growing customer base in Ohio. Tractor Supply Company TSCO launched its largest and ninth distribution center, located in Navarre, OH, which was marked by a grand opening event. This development will help the company to support its expansion plans across the United States and drive growth.Last year, TSCO reached a milestone by surpassing more than 2,100 Tractor Supply stores across the United States and 50,000 Team Members. The company’s sales also witnessed more than 70% growth from the time its first distribution center was opened in 2018.The new facility will meet growing customer demand in the Ohio and Upper Midwest regions. The distribution center will provide for nearly 250 stores, and help fulfill online orders for customers in Ohio, Michigan, Minnesota and other parts of the Upper Midwest region. Also, the move will create 500 additional jobs in the Stark County area.What Else Do You Need to Know?Tractor Supply is on track to build up on its Out Here lifestyle assortment and convenient shopping format to gain customers and market share. The strategy is essentially based on five key pillars, including customers, digitization, execution, team members and total shareholder return. As part of the plans, it revised the long-term financial growth targets for 2022-2026.Management envisions achieving net sales growth of 6-7%, while comps are expected to grow 4-5%. The operating margin is expected to be 10.1-10.6%, up from the earlier mentioned 9-9.5%. Earnings per share are likely to grow 8-11%, up from the previously stated 8-10%.Earlier, the company launched the Field Activity Support Team (“FAST”) and implemented various technology and service enhancements across the enterprise.Tractor Supply is in the initial phase of transforming its side lots and mature stores to improve space productivity, bringing the latest merchandising strategies to life, and advancing efforts to remain nationally strong and locally relevant. Management anticipates transforming the side lots in 100 locations in 2022. These have been significant investments in stores. These are expected to boost productivity across the existing and new stores.Given the changing consumer trends, Tractor Supply is focused on integrating its physical and digital operations to offer consumers a seamless shopping experience.The company is on track with the ‘ONETractor’ strategy to connect stores and online shopping. The company’s omni-channel investments, include curbside pickup, same-day and next-day delivery, a re-launched website, and a new mobile app. Its e-commerce business witnessed high-single-digit growth from the prior year.Tractor Supply added app features such as My Pet and upgraded its in-store mode. The company expanded the program to include Petsense by Tractor Supply stores. The move will enable it to gain pet customers for both banners. The mobile app has also been performing well. Management earlier predicted to reach more than $2 billion in sales by 2026.The company’s store expansion initiatives bode well. It is well-positioned to expand its store base, remaining on track to increase its domestic store to 2,500 in the long term. In the third quarter of 2022, the company opened 11 Tractor Supply stores and two Petsense stores. Management is on track with its store-opening initiatives. It plans to open 60-70 Tractor Supply stores and 10 Petsense stores in 2022.Driven by these factors, management raised its guidance for 2022. The view reflects the recent acquisition of Orscheln Farm and Home, which is likely to contribute $75 million to sales in the fourth quarter and 2022.The company expects net sales of $14.06-$14.12 billion, up from the prior mentioned $13.95-$14.05 billion. Comps are likely to grow 5.4-5.8%, up from earlier stated 5.2-5.8% growth. The operating margin is anticipated to be 10.1-10.15% compared with the previously stated 10.2%. Earnings per share are likely to be $9.55-$9.63, up from the earlier mentioned $9.48-$9.60. The view also includes gains from the 53rd week in 2022, which is expected to contribute 1.5 percentage points to the top line and 15 cents to the bottom line.Shares of this Zacks Rank #3 (Hold) company have gained 2.3% in the past year compared with the industry's 5.5% growth. Image Source: Zacks Investment Research However, Tractor Supply has been reeling under cost inflation and higher transportation costs. The company has also been witnessing elevated costs in the commodity inputs in its product categories. Higher labor wages and transportation costs have been adversely impacting its vendor partners. Management expects rising inflation to persist throughout 2023, with some normalization in the back half of 2023.Stocks to ConsiderHere are three better-ranked stocks to consider — Capri Holdings CPRI, Tecnoglass TGLS and Ulta Beauty ULTA.Capri Holdings, which operates membership warehouses, presently sports a Zacks Rank #1 (Strong Buy). CPRI has an expected EPS growth rate of 11.8% for three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Capri Holdings’ sales and EPS for the current financial year suggests respective growth of 1% and 10.6% from the year-ago period’s reported figures. The company has a trailing four-quarter earnings surprise of 20.99%, on average.Tecnoglass, the producer and seller of architectural systems for the commercial and residential construction industries, currently carries a Zacks Rank #2 (Buy).The Zacks Consensus Estimate for Tecnoglass’ current financial-year revenues and EPS suggests growth of 43.4% and 82.2%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter negative earnings surprise of 26.9%, on average.Ulta Beauty currently carries a Zacks Rank #2. The expected EPS growth rate for the company for three to five years is 13.8%.The Zacks Consensus Estimate for Ulta Beauty’s current financial-year sales suggests growth of 15.7% from the year-ago period’s reported number. The beauty retailer and the premier beauty destination for cosmetics, fragrance, skincare products, hair care products and salon services has a trailing four-quarter earnings surprise of 26.2%, on average. 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.8% per year. So be sure to give these hand-picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tractor Supply Company (TSCO): Free Stock Analysis Report Ulta Beauty Inc. (ULTA): Free Stock Analysis Report Tecnoglass Inc. (TGLS): Free Stock Analysis Report Capri Holdings Limited (CPRI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 19th, 2023

Huntington Shopping Center Signs 4 New Tenants

 Federal Realty Investment Trust (NYSE: FRT)  has announced The Container Store will join REI and Whole Foods Market at Huntington Shopping Center in Huntington Station, NY as part of its $75M redevelopment. Additionally, Burger Village, Love Sac and Just Salad have signed leases for the center’s new pad site facing Route... The post Huntington Shopping Center Signs 4 New Tenants appeared first on Real Estate Weekly.  Federal Realty Investment Trust (NYSE: FRT)  has announced The Container Store will join REI and Whole Foods Market at Huntington Shopping Center in Huntington Station, NY as part of its $75M redevelopment. Additionally, Burger Village, Love Sac and Just Salad have signed leases for the center’s new pad site facing Route 110.   The Container Store is the nation’s leading specialty retail of storage and organization products, custom closets, and in-home services. The new 15,676 SF store will be located adjacent to Whole Foods Market and will be the brand’s second location to open on Long Island.  Route 110 Pad Site:  Burger Village, a Long Island-based burger chain aiming to serve the freshest and finest organic delicacies to its customers, is planning a 2,756 SF restaurant  Love Sac, an American furniture retailer specializing in a patented modular furniture system called Sactionals will be opening a 1,412 SF showroom  Just Salad, a New York-based fast-casual salad chain will open a 2,382 SF location  “The transformation of Huntington Shopping Center continues to draw premier brands that, together, create a must-visit retail destination,” said Mark Brennan, VP of Regional Development at Federal Realty. “With the addition of some of the region’s most desirable retail, food & beverage concepts, we believe the property will deliver what the community needs and wants.”  This 21-acre community shopping center sits adjacent to Walt Whitman Mall on Route 110 in the heart of Huntington’s main retail corridor. PetSmart, ULTA, Tilly’s, Michaels, and Vision Works are currently open. When the redevelopment is complete in 2024, there will be a total of 277,000 square feet of retail at the site.   On the construction front – Federal Realty has begun work on the highly anticipated 43,609 SF Whole Foods Market while REI builds out its 21,226 SF store adjacent to Tilly’s alongside Route 110. Additional center improvements include the new pad site along Route 110 with 1,407 SF still available for lease, updated property-wide signage, lighting, and facades.   The post Huntington Shopping Center Signs 4 New Tenants appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyJan 8th, 2023

The rise and fall of the American shopping mall

In the 1980s and '90s, malls were the center of American social life. Today, there are dead and dying malls scattered across the country. Shuttered stores at Schuylkill Mall in Pennsylvania in 2017.Spencer Platt/Getty Images When the first malls opened in the 1950s they were such an achievement that they inspired even Walt Disney.  By the 1980s, the mall had become the center of American social life and accounted for the bulk of all retail sales.  But a shrinking middle class, the rise of online shopping, and the fact that there were simply too many malls contributed to the decline of the American mall.  The nation's first fully enclosed indoor mall opened on October 8, 1956. Called Southdale Center, the shopping center was located in the suburbs of Minneapolis, Minnesota, and contained shops, fountains, art installations, a courtyard, and a bird sanctuary.Southdale Mall in 1986.Larry Salzman/APSource: InsiderThe mall was designed by Victor Gruen, an architect known up until that point for designing boutiques and storefronts. Gruen's mall was met with rave reviews, with some going as far as to compare it to Disneyland — incidentally, Walt Disney later cited Gruen's work as one of the inspirations for his Epcot theme park.Architect Victor Gruen, middle, in 1956. Gruen designed the first enclosed indoor mall in the US.Los Angeles Examiner/USC Libraries/Corbis via Getty ImagesSource: InsiderThe middle of the century was uniquely primed for the advent of the shopping mall. The birth of the interstate highway system meant the suburbs were growing at warp speed, and people had more money to spend post-World War II.Interior of a shopping mall in the 1960s.H. Armstrong Roberts/Retrofile/Getty ImagesSource: Smithsonian MagazineNot only that, but changing tax laws made it lucrative to invest in commercial real estate, leading to shopping centers springing up across the country. For example, six new shopping plazas were built in or near downtown Cortland, New York, between 1950 and 1970 even though the population had hardly budged.A Denver shopping mall in 1968.Denver Post via Getty ImagesSource: Smithsonian MagazineBy 1960, there were 4,500 large shopping complexes in the US, meaning an average of at least three new shopping centers had opened every day since 1956.A Seattle shopping mall in 1974.Barry Sweet/APSource: InsiderThe 1970s brought about another new invention: the food court. The first food court opened in New Jersey's Paramus Park Mall in 1974, with the hope that it would be a place for teenagers to safely socialize — and a way for mall owners to make more money.Water Tower Place shopping mall in Chicago in 1976.Barbara Alper/Getty ImagesSource: Federal Reserve Bank of RichmondBy the mid-1970s, 33% of all US retail sales happened at a mall or shopping center — a decade later, that number had grown to 52%.Water Tower Place shopping mall in Chicago in 1976.Barbara Alper/Getty ImagesSource: Insider, The New York TimesBy 1986, there were 25,000 shopping malls nationwide, and they'd become de facto town squares. The mall was where teens hung out and where single people met for dates. Music and movies glamorized and skewered the mall in equal measure, while Consumer Reports named it one of the top 50 inventions that had revolutionized consumer life – alongside innovations like antibiotics and birth control pills.The Galleria shopping mall in Houston, Texas, in 1986.Richard Carson/APSource: The New York Times, ViceMall culture reached a fever pitch in 1992 upon the opening of the Mall of America outside Minneapolis. The 5.6 million-square-foot megamall housed over 500 stores, a theme park complete with roller coasters, a full-size aquarium, a wedding chapel, and a movie theater. These days, the mall has its own comedy club and escape room.An aerial view of the Mall of America in 1992.Antonio RIBEIRO/Gamma-Rapho via Getty ImagesSource: Insider, Federal Reserve Bank of RichmondFor a while, megamalls were wildly popular — and profitable. A decade after Mall of America opened, it was drawing 43 million visitors every year and reporting about $900 million in annual sales.Mall of America in 1992.Antonio RIBEIRO/Gamma-Rapho via Getty ImagesSource: Los Angeles TimesBut American shopping habits had begun to change. Department stores had lost their cachet, replaced by one-stop shops like Walmart. Consumers started buying things from catalogs and TV shopping channels rather than strolling through the mall for pleasure.Shoppers wait in line at a perfume store in the Ontario Mills shopping center in California on Christmas Eve 1997.Chris Urso/APSource: The New York TimesPlus, malls that had been around for 20 or 30 years were starting to look dated and rundown ...The Mountain Gate Plaza mall in California sitting mostly empty in 2002.Bob Carey/Los Angeles Times via Getty ImagesSource: Smithsonian Magazine... and the department stores, known as "anchor tenants," were frequently poached by the newer, more popular megamalls nearby, leaving older malls to slowly wither and die.A dismantled sign sits leaning outside a Sears department store in Nanuet, New York.ReutersSource: InsiderThen the 2008 Recession hit, sending tenants' sales plummeting and mall vacancy rates soaring. By the end of 2009, there were dozens of so-called "dead malls" across the country.A vacant shopping mall in Palm Beach, Florida, in 2009.Jeffrey Greenberg/Universal Images Group via Getty ImagesSource: The Wall Street JournalThe 2010s marked a painful decade in shopping-mall history. Between 2010 and 2013, visits to malls during the holiday shopping season had dropped by 50%. By 2014, a fifth of the malls had "troubling" vacancy rates, while 3% had such high vacancy rates, they were considered to be dying.Shuttered stores dominate the interior of the Schuylkill Mall in Pennsylvania in 2017.Spencer Platt/Getty ImagesSource: Time, The New York TimesIn 2017, 7,000 retailers — many of them department stores — closed their doors. Anchor tenants like Sears and JCPenney left behind massive, empty shells at malls across the country that mall owners struggled to fill.Empty shopping racks and mannequins being sold at discount prices at a closing JCPenney at the Columbia Mall in 2017 in Bloomsburg, Pennsylvania.DON EMMERT/AFP via Getty ImagesSource: Federal Reserve Bank of Richmond, InsiderWhy did malls fall so hard, so fast? For one, there were simply too many of them, to the point that malls in close proximity would cannibalize each others' sales. For another, they were less necessary than they once were, thanks to the rise of online shopping.A vacant shopping center in El Centro, California.Mickey Strider/Loop Images/Universal Images Group via Getty ImagesSource: Federal Reserve Bank of Richmond, InsiderPlus, the middle class wasn't as resilient as it once was. Middle-income shoppers had shifted their spending toward cheaper retailers like Target, Walmart, and Dollar General, leaving department stores behind.Kena Betancur/VIEWpress via Getty ImagesSource: Racked, Federal Reserve Bank of Richmond, InsiderInnovative developers are turning those empty malls into everything from medical centers to Amazon fulfillment centers. In some malls, abandoned stores are being turned into aquariums, haunted houses, and escape rooms.Employees select and dispatch items in an Amazon warehouse.Oli Scarff/Getty ImagesSource: Fast Company, NBC NewsBut the shopping mall isn't dead yet. In 2019, American Dream, a 3 million-square-foot megamall, opened its doors in East Rutherford, New Jersey. It's the nation's second-largest mall after Mall of America.Inside the American Dream mall in East Rutherford, New Jersey.Thomas Pallini/InsiderSource: InsiderAmerican Dream contains its own amusement park, water park, indoor ski hill, and ice-skating rink — not to mention room for hundreds of stores.Inside the American Dream mall in East Rutherford, New Jersey.Thomas Pallini/InsiderSource: InsiderBut American Dream was a victim of bad timing: less than six months after its grand opening, the pandemic hit, and the mall was forced to close its doors. While the mall was hailed as the second coming of the Mall of America, that popularity never materialized, and American Dream has struggled financially since it opened, losing $60 million in 2021 alone and missing an $8.8 million debt payment in 2022.Inside the American Dream mall in East Rutherford, New Jersey.Thomas Pallini/InsiderSource: Retail DiveStill, American Dream — and the 1,100 other malls nationwide — are hanging on, and in some cases, showing signs of growth. Ahead of the 2022 holiday season, foot-traffic data indicated that shoppers were returning to malls for their holiday shopping and that the bulk of sales would happen in person.Holiday shoppers at a crowded Roosevelt Field Mall on November 25, 2022, in Garden City, New York.Howard Schnapp/Newsday RM via Getty ImagesSource: Insider IntelligenceThe country's largest mall owner, Simon Property Group, said in August 2022 that a mix of factors, including people moving during the pandemic and e-commerce brands looking to open brick-and-mortar spaces, were helping mall occupancy rates to rise nearly 2% compared to 2021.Mark Makela/Getty ImagesSource: CNBCIn November, the company shared that it's on track to reach pre-pandemic occupancy rates in 2023. It's a sign that while struggling, malls may still have a future.The luxury goods retailer Michael Kors at a mall in lower Manhattan.Spencer Platt/Getty ImagesSource: Footwear NewsRead the original article on Business Insider.....»»

Category: personnelSource: nytJan 6th, 2023

The pandemic didn"t kill stores but they"ll never be the same again

Shopping looks a little different these days as retailers double down on technology like self-checkout and buy online, pickup in store. Mark Makela/Getty Images The pandemic's effect on retail has lingered even though life has mostly returned to normal.  Stores are becoming mini fulfillment centers and in-store shopping is now often touchless and cashier-less. But one trend has been resurrected: Big-box retailers are expanding, even though experts predicted brick-and-mortar was dead. Shopping looks a little different these days.Brick-and-mortar stores are acting like mini fulfillment centers. Self-checkout is becoming more common. Cash is out and QR codes are in. These shifts, which began with the pandemic, have lingered even as life in the US has mostly returned to normal. They've created a brave new world of retail that looks different than even three years ago, and worlds away from the retail heyday prior to the 2008 Recession — except for one major retail trend that's been resurrected in 2022.Here's what's changed, and what's come back from the dead. Stores have become a lot like fulfillment centersPATRICK T. FALLON/AFP via Getty ImagesThe pandemic didn't kill brick-and-mortar retail, but it did change it. Retail locations still sell goods to in-person shoppers, sure, but they've also been drafted into the battle to keep up with e-commerce demand. Rather than rely solely on fulfillment centers to process and ship online orders, retailers like Ulta, Macy's, Best Buy, Nordstrom, Walmart, and more have started tapping into the inventory held by stores, too. That allows them to ship more goods and avoid telling customers something's out of stock, plus, items shipped from a store may arrive on the customer's doorstep faster than if it came from a regional distribution center, according to The Wall Street Journal. What's more, practices like curbside pickup and buy online, pick-up in store — known as BOPIS — aren't going away. While those options were available for shoppers pre-pandemic, they gained steam once lockdowns kept everyone at home. Nearly three years later, consumers have come to rely on them: 33% of adults under 50 say they're likely to keep using curbside pickup, according to a study from the AP-NORC Center for Public Affairs Research. Plus, stores are becoming hubs for online returns. Returns are increasing thanks to the online shopping boom, and it's become an expensive headache for retailers, so much so that they've started charging shoppers to send back their unwanted goods — if they don't want to pay, they can return the products to stores for free. Customer interaction isn't the No. 1 priority anymoreKile Brewer for The Washington Post via Getty ImagesCustomer service has long been at the center of the retail and hospitality experience, going as far back as the first Ritz hotel in the 1800s and informing the rise of department stores at post-World War II shopping malls. But these days, customer service looks totally different. Now, it's all about speed, convenience, and a touchless experience: many restaurant menus and retail signage still comes in the form of QR codes, both customers and retailers have largely abandoned cash, and self-checkout is gaining store space at big-box and apparel retailers like Kohl's, H&M, Zara, Uniqlo, and Bed Bath & Beyond. Self-checkout is largely a hit with customers: 85% of shoppers perceive it as faster than waiting in line for a cashier and 60% say they prefer self-checkout over checking out with an associate, according to a 2021 survey conducted by retail technology firm Raydiant. But it's also a cost-cutting move: self-checkout requires fewer in-store employees, and labor is one of the biggest expenses of brick-and-mortar retailing. Labor, or the lack thereof, was also a factor in stores like Walmart, 7-Eleven, and McDonald's reducing their operating hours, effectively ending 24-hour shopping. Almost three years later, those long store hours haven't really returned. Big-box retailers are opening stores againJeffrey Greenberg/Universal Images Group via Getty ImagesWith all these changes, you'd think brick-and-mortar retail would be on its deathbed. But it's actually quite the opposite. Though the retail apocalypse doomed plenty of retail locations before the pandemic, and a swath of stores shut down in 2020, the picture looks different in 2022 and heading into 2023. Big-box retailers are opening more stores than they're closing for the first time in years, despite experts warning that brick-and-mortar would never recover from the pandemic.Discount retailer Burlington has said it will open 87 net new stores this fiscal year, Ross Stores plans to add 92 net new locations this year, T.J. Maxx and Marshalls owner TJX has opened 104 stores this year, and Barnes & Noble is expanding by 30 new stores next year, The Wall Street Journal reported.Though there are still some retailers whose store count may dwindle in 2023 — department stores chief among them — the openings are a sign of a surprisingly strong period in brick-and-mortar, one that hasn't been seen in at least 15 years.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 30th, 2022

3 Top REITs to Buy From the Rebound in Retail REIT Industry

With shoppers' renewed enthusiasm for in-store shopping experience and retail landlords' focus on omni-channel retailing, adaptive reuse capabilities and essential retail tenants, Zacks REIT and Equity Trust - Retail industry stocks SPG, KIM, SKT are in focus. The Zacks REIT and Equity Trust - Retail industry constituents are poised to benefit from the renewed enthusiasm of shoppers for an exclusive in-store shopping experience following the pandemic downtime. Efforts to support omni-channel retailing, adaptive reuse capabilities and opportunities emanating from consolidations, and focus on e-commerce resistant sectors have poised Simon Property Group, Inc. SPG, Kimco Realty Corporation KIM and Tanger Factory Outlet Centers, Inc. SKT well for growth.However, inflationary pressure and economic slowdown might cast a pall on recovery. Rising borrowing costs and labor market pessimism are likely to weigh down on consumers’ willingness to spend to some extent. Also, higher e-commerce adoption might continue to affect retail landlords’ cash flows.Industry DescriptionThe Zacks REIT and Equity Trust - Retail industry embodies a group of REITs engaged in owning, developing, managing and renting space in a variety of retail real estates. Among these are regional malls, outlet centers, grocery-anchored shopping centers and power centers, including big-box retailers. Also, net lease REITs enjoy the ownership of freestanding properties, wherein both rent and the majority of operating expenses for the properties are borne by the tenants. The overall health of the economy, job market and consumer spending are the main drivers of retail REITs while property locations and trade area demographics play key roles in demand determination. Although dwindling footfall, store closures and retailer bankruptcies were bothering this asset category in the past, it is on its recovery on shoppers’ renewed enthusiasm for an in-person shopping experience.What's Shaping the Future of the REIT and Equity Trust - Retail Industry?Renewed Enthusiasm for In-Store Shopping Experience to Fuel Recovery: This industry is poised to benefit from the renewed enthusiasm of shoppers as they look for an exclusive in-store shopping experience following the pandemic downtime. As such, the landlords remain upbeat about the ongoing holiday shopping season. Also, the optimistic view of retailers for long-term growth is likely to act as a tailwind. Amid this, retailers’ focus has now shifted from the closing of stores to the revival of their growth plans, resulting in more demand for physical store spaces and paving the way for the retail REITs to experience gains in leasing activity, pricing power and flourish. Moreover, retailers are focusing on investments in their stores because apart from serving as showrooms, physical stores offer a convenient location for pick-up or exchange of goods, helping retailers counter the increasing costs associated with last-mile delivery.Limited New Supply and Rapid Formation of New businesses to Drive Leasing: Comparing to the pre-pandemic levels, the construction of new retail space remains dreary. Moreover, lease signings, rent and occupancies in retail real estates are likely to get a boost from limited new supply, the waning of pandemic concerns and the rapid formation of new businesses in the retail sector.Omni-Channel Strategy, Structural Changes in Focus: Omni-channel is the focal point for retailers. Physical stores will be a vital sales channel over the long run because though there is convenience in online shopping, it cannot replace the benefits and satisfaction of visiting a brick-and-mortar store. This is quite evident from the recent foot traffic at retail destinations. Moreover, digitally-native brands are likely to keep boosting their physical presence in the days to come as part of the omni-channel strategy since the opening of stores helps them to improve their connection with customers and drive expansion. In fact, for retailers, the focus now is not only on increasing their online presence but also on maintaining brick-and-mortar stores in the best locations, which in turn is raising hopes for retail REITs that focus on such locations. Also, with the waning impact of the pandemic, entertainment and dining concepts are seeing a revival, boosting retail REITs’ growth opportunities.Repurposing and Conversions Pick Up Pace: Retail REITs are now focusing on adaptive reuse, which includes multifamily, hotel, office and medical components, resulting in the construction of mixed-use real estate destinations. In fact, the mixed-use development option has gained immense popularity in recent years as it helps to catch the attention of people who prefer to live, work and play in the same area. Moreover, the open-air format and pick-up concepts have been helping landlords to lure tenants. Also, the conversion of malls into distribution hubs has accelerated as these distribution centers, being situated close to consumers of retailers, facilitate faster delivery of products and aid retailers in improving services, lower costs and make optimum asset utilization.Inflationary Pressure, Economic Slowdown Cast a Pall on Recovery: Higher material and operating costs remain a concern for the retailers and this, in turn, might cast a pall on their landlords’ cash flows. Moreover, a slowdown in the economy and the depletion of savings, rising borrowing costs and labor market pessimism is likely to weigh down on consumers’ willingness to spend to some extent.Higher E-commerce Adoption to Remain a Concern: Consumers’ habits have transformed at a rapid pace over the past years and traffic at retail real estates has suffered, with e-commerce capturing market share from brick-and-mortar stores. With the pandemic's impact waning, mall traffic has rebounded significantly. Yet, given the convenience it offers, online shopping is likely to remain a popular choice among customers. This might adversely impact the market share for brick-and-mortar stores.Zacks Industry Rank Indicates Bright ProspectsThe Zacks REIT and Equity Trust - Retail industry is housed within the broader Zacks Finance sector. It carries a Zacks Industry Rank #93, which places it in the top 37% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of the positive funds from operations (FFO) per share outlook for the constituent companies in aggregate. Looking at the aggregate FFO per share estimate revisions, it appears that analysts are gaining confidence in this group’s growth potential. Since April, the industry’s FFO per share estimate for 2022 has moved 1.1% north.Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.Industry Performance Mix With Sector & S&P 500The REIT and Equity Trust - Retail Industry has underperformed the broader Zacks Finance sector over the past year but outperformed the S&P 500 composite.The industry has declined 13.2% during this period compared with the S&P 500’s fall of 15.1% and the broader Finance sector’s decline of 9.2%.One-Year Price PerformanceIndustry's Current ValuationOn the basis of forward 12-month price-to-FFO (funds from operations), which is a commonly used multiple for valuing Retail REITs, we see that the industry is currently trading at 14.57X compared with the S&P 500’s forward 12-month price-to-earnings (P/E) of 17.89X. The industry is trading above the Finance sector’s forward 12-month P/E of 13.90X. This is shown in the chart below.Forward 12 Month Price-to-FFO (P/FFO) RatioOver the last five years, the industry has traded as high as 18.49X, as low as 10.20X, with a median of 15.39X.3 Retail REIT Stocks to ConsiderSimon Property Group: This retail REIT is a behemoth in its industry and enjoys a portfolio of premium retail assets in the United States and abroad. The adoption of an omni-channel strategy and successful tie-ups with premium retailers have been aiding the company. It is also tapping growth opportunities by assisting digital brands to enhance their brick-and-mortar presence, as well as capitalizing on buying recognized retail brands in bankruptcy.Additionally, Simon Property is exploring the mixed-use development option, which has gained immense popularity in recent years among those who prefer to live, work and play in the same area.Moreover, with solid balance-sheet strength and available capital resources, Simon Property Group looks poised to ride this growth curve and bank on opportunities emanating from market dislocations.Its third-quarter results reflected healthy operating performance, solid leasing activity and a rise in occupancy levels. Simon Property also announced a 2.9% sequential hike and a 9.1% year-over-year increase in its fourth-quarter 2022 dividend.Simon Property Group currently carries a Zacks Rank #3 (Hold). Over the past month, the Zacks Consensus Estimate for 2022 FFO per share witnessed marginal upward revision to $11.68, reflecting analysts’ bullish outlook. The stock has appreciated 34.5% so far in the quarter.  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Kimco Realty Corporation: Jericho, NY-based Kimco Realty is a leading publicly traded owner and operator of open-air, grocery-anchored shopping centers and mixed-use assets in the United States.Kimco is well-poised to benefit from its properties, which are predominantly grocery-anchored, and in the drivable first-ring suburbs of its top major metropolitan Sunbelt and coastal markets, having several growth levers. Its focus on last-mile assets, capital-recycling efforts and a strong balance-sheet position act as tailwinds.Currently, Kimco carries a Zacks Rank #3. The Zacks Consensus Estimate for this year’s FFO per share has been revised marginally upward to $1.58 over the past month, indicating a year-on-year improvement of 14.5%. The stock has appreciated 23.4% so far in the quarter.Tanger Factory Outlet Centers, Inc.: This Greensboro, NC-based retail REIT is a well-known operator of upscale, open-air outlet centers. SKT owns or has an ownership interest in, and manages a portfolio of 37 centers, with an additional center presently under development.With more than 41 years of experience in the outlet industry and a well-located portfolio, Tanger is poised to benefit from the upbeat retail environment in this holiday shopping season.Its strategic efforts, leasing acceleration operation revamp are aiding in NOI growth, rent spreads, longer lease terms and higher occupancy. With its open-air shopping destinations grabbing digitally native brands, iconic food and beverage, and entertainment uses, SKT is poised for growth in the upcoming period.Currently, SKT carries a Zacks Rank #2 (Buy) and has a long-term growth rate of 8.90%, which is ahead of the industry average of 6.2%. Moreover, for 2022, the stock has seen the Zacks Consensus Estimate for FFO per share being revised 1.7% upward to $1.8 over the past month. This also suggests an increase of 2.3% year over year. This upward trend in estimate revisions is also visible for 2023. The stock has also gained 42.7% quarter to date.Note: Funds from operations (FFO) is a widely used metric to gauge the performance of REITs rather than net income as it indicates cash flow from their operations. FFO is obtained after adding depreciation and amortization to earnings and subtracting the gains on sales. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Simon Property Group, Inc. (SPG): Free Stock Analysis Report Kimco Realty Corporation (KIM): Free Stock Analysis Report Tanger Factory Outlet Centers, Inc. (SKT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksNov 28th, 2022

Levi"s got its start making clothes for cowboys — now it"s a Gen Z status symbol. Here"s how the 169-year-old retailer became the world"s most iconic denim company.

The 169-year-old retailer has weathered world wars and the Great Depression — not to mention the cyclical nature of fashion. Hollis Johnson/Business Insider Levi's didn't invent denim, but it did invent blue jeans as we know them today.  The 169-year-old retailer has weathered world wars, the Great Depression, and the cyclical nature of fashion.  Its jeans were once worn by cowboys in the American West — now, they're revered by celebs and Gen Z shoppers. Here's a closer look at the rise of Levi's. Levi Strauss was born in Bavaria in 1829.An 1850s photograph of Levi Strauss.AP PhotoStrauss immigrated to the US in 1847. He landed in New York City and joined his half-brothers' dry-goods business.Six years later, Strauss headed west, moving to San Francisco to open a West Coast branch of the business, selling items like clothing and blankets to general stores, according to Levi's. Jeans as we know them today were born decades later when Strauss teamed up with a tailor to create riveted pants.The Levi Strauss factory in San Francisco in 1882.Ullstein bild via Getty ImagesIn the early 1870s, a customer of Strauss', a tailor named Jacob Davis, came up with the idea to use copper rivets to strengthen pants.He purchased fabric from Strauss and made button-fly pants, which were such a hit among customers, he decided to patent them. He asked Strauss to join him on the patent, which was granted in 1873.The pants were akin to modern-day Levi 501s — back then, the model was called "XX" — and featured a single back pocket, a watch pocket, and suspender buttons.Modern-day jeans were born, though at the time, they were called "waist overalls" or simply "overalls." It wasn't until the 1960s that Strauss' creation was nicknamed "jeans," according to Levi's. The name comes from the French word "Gênes," meaning Genoa, an Italian port city where sailors often dressed in denim, Vice reports.In 1886, Levi's started including a leather patch on its clothing containing a logo with two horses, a logo that's still used today.Sean Gallup/Getty ImagesOver time, the original design of the jeans changed slightly: a second back pocket was added in 1901, and belt loops were added in 1922. In 1937, in response to customer requests, the pants' trademark back-pocket rivets were covered up to make sitting down more comfortable and to keep them from scratching saddles and upholstery, according to Levi's. But some Levi's products made during the 1880s bore a troubling reminder of a dark period in US history.A woman makes jeans at a Levi's factory.Getty imageIn the 1880s, the US government passed the Chinese Exclusion Act, a law aimed at banning Chinese workers from immigrating to the US. The law came during a period of anti-Chinese sentiment following the Gold Rush and the construction of the railroads. Though the law was later repealed — and eventually condemned — Levi's briefly adopted its own anti-Chinese labor policy: a tagline included in its products and its ads that read "made by white labor," The Wall Street Journal reports.A company spokesperson recently told the Journal that today, Levi's is "wholly committed to using our platform and our voice to advocate for real equality and to fight against racism in all its forms." Throughout the early 1900s, Levi's maintained a reputation as the clothing of choice for laborers and cowboys, an image it leaned into following the Great Depression.John Wayne wearing Levi's jeans in 1939.Alain BENAINOUS/Gamma-Rapho via Getty ImagesPost-Depression, Levi's made a big play for cowboys' wallets, taking out ads in agricultural papers that served the Western states, publications like "Washington Farmer" and "The Arizona Producer." But when World War II began, Levi's shifted gears, sending jeans overseas at the request of the US Navy. At the same time, women working in US factories and shipyards started wearing Levi's, since they protected them from hazards like welding sparks, according to Levi's. By 1950, Levi's had produced 95 million pairs of jeans, which at that time cost only $3.50, according to Time.  The 1960s and '70s ushered in a renaissance in American fashion, which further spurred demand for Levi's in the US and abroad.A Levi's store in Los Angeles in 1975.Bob Cross/Getty ImagesAs more casual clothing styles took hold in the middle of the century, blue jeans became more mainstream. Civil rights leaders wore blue jeans, hippies wore blue jeans, and rock bands wore blue jeans. In fact, bands like Jefferson Airplane were making radio commercials for Levi's in the late 1960s. In the US, denim became synonymous with equality and freedom, art historian Caroline A. Jones told Smithsonian Magazine in 2020."Youth activists ... used denim as an equalizer between the sexes and an identifier between social classes," she said.But shifts were happening overseas, too. In East Germany during the Cold War, items like jeans were seen as "symbols of freedom, of independence, of being cool," German historian Gerd Horten previously told Insider. Since sales of Levi's were banned in East Germany in the 1960s, a black market for the pants sprung up, with jeans going for as much as $500 a pop. But by the late 1970s, East Germany's economy was crumbling and the government relented, requesting that Levi's ship nearly 800,000 pairs of jeans ahead of the holidays. Young Germans lined up to buy the denim, which cost 149 East German marks, equal to about $74 US at the time.In the early 1990s, Levi's helped usher in the concept of casual Fridays, part of a play to help boost its khaki brand, Dockers.Alexandra Wyman/WireImageThough casual Fridays date back to a Hewlett-Packard initiative from the 1950s, we have Levi's and its khaki brand, Dockers, to thank for them becoming mainstream, according to a 2014 Insider article.The early 1990s was a tough time for the apparel industry, and it was also likely a tough time for HR departments across the country: Though casual Fridays had become the norm, there was no clear code for what that meant — many workers saw it as an opportunity to dress sloppily or inappropriately. Levi's saw an opportunity, and in 1992, released a pamphlet titled "A Guide to Casual Businesswear." It gave examples of how to dress for the workplace – mainly Dockers khakis and Levi's jeans – and offered tips and advice for what counted as "business casual." "We did not create casual business wear," Daniel Chew, Levi's former consumer marketing director for North America, told Bloomberg Businessweek in 1996. "What we did was identify a trend and see a business opportunity." The pamphlet attracted the attention of major US companies — Charles Schwab distributed it to employees — and by 1995, Levi's posted then-record sales of $6.7 billion, a 10% increase from the year prior, according to Bloomberg.Levi's outfitted the US Olympic team during the 1984 Summer Games in Los Angeles.Gymnast Mary Lou Retton during the 1984 Los Angeles Summer Olympic Games.Wally McNamee/CORBIS/Corbis via Getty ImagesThe company aired an ad campaign for its 501 jeans at the games, which led to a surge in sales, according to Levi's. One year later, Levi's, which had gone public in 1971, went private again in a leveraged buyout led by Levi Strauss' descendants. The buyout, valued at $1.7 billion, was the largest of its kind at the time.  But by the late 1990s, demand for Levi's started to wane.CP Kevin Frayer/APIn 1997, Levi's announced that it would close 11 manufacturing plants and lay off about 6,400 employees, about 34% of its workforce. "In the 1960s, '70s and '80s, we were chasing demand and couldn't produce fast enough," company spokesman Gavin Power told the Los Angeles Times at the time. "It's not like that anymore."Though Levi's was the largest brand-name apparel-maker at the time, it was facing several challenges: spending on apparel had dropped 3% in the '90s compared with the '80s; manufacturing advancements meant more clothes could be produced by fewer people; and competition was heating up, thanks to brands like Ralph Lauren and cheaper private labels at department stores. "A lot of people can buy jeans for less than Levi's is offering them at and get the same quality," retail consultant Kurt Barnard told the Times in 1997. Sales continued to decline for the next decade, but by 2007, Levi's was once again profitable.Ezra Shaw/Getty ImagesFive years later, Levi's purchased the naming rights to the new San Francisco 49ers stadium.Levi's agreed to pay the NFL team $220 million over 11 years in what was, at the time, the third-biggest naming-rights deal in the nation. In 2019, Levi's filed to go public once again, at a $6.6 billion valuation.Levi Strauss CEO Chip Bergh, right, is joined by CFO Harmit Singh, second from right, as he rings the New York Stock Exchange opening bell on March 21, 2019.AP Photo/Richard DrewIn honor of the occasion, the famously strict New York Stock Exchange relaxed its "no blue jeans allowed" policy so that everyone on the trading floor could wear jeans and denim jackets — even floor traders and stock exchange employees were fitted for Levi's apparel in advance.CNBC's Bob Pisani said at the time that the trading floor at the NYSE looked like "Woodstock '69." The onset of the pandemic in 2020 hurt Levi's sales. Industry experts began predicting the end of jeans as people remained at home, ensconced in loungewear.Brendan McDermid/ReutersThe pandemic hit retailers hard, and Levi's was no exception. The brand temporarily shut down its stores, faced supply chain challenges, and saw a decline in sales as consumers opted for elastic waistbands over "hard pants." By May 2020, net revenue had plummeted 62% year-over-year as costs surged due to the pandemic. In July of that year, Levi's laid off 700 workers, equivalent to 15% of its workforce. By 2021, losses began to shrink, but sales were still down. CEO Chip Bergh acknowledged that "changes look like they're here to stay," including the lingering "casualization" of fashion.Richard Drew/APStill, there were a few bright spots for Levi's. Fluctuations in body weight during the pandemic helped fuel sales in 2021, Bergh said at the time. Plus, the company dipped a toe in activewear and loungewear with its acquisition of yoga apparel brand Beyond Yoga. And while Levi's has long been a sustainability-minded company, it's ramped up its efforts in recent years, urging consumers to "buy better, wear longer" and aiming to become a net-zero emissions firm by 2050. Meanwhile, Levi's has become the go-to choice for models, musicians, and the fashion crowd.Model Bella Hadid wearing a vintage Levi's sweatshirt.Gotham/GC ImagesWhile pricey denim was all the rage in the early aughts, trends shifted in the 2010s in favor of reasonably priced Levi's. "To me, the backlash — or 'denim fatigue' — is because all of the jeans [on the market] look exactly alike," Sean Barron, cofounder of denim brand Re/Done, told Fashionista in 2015. "They're all skinny with stretchy blue fabric. For a while it was like, 'what else can I buy?' These brands are making people look homogeneous."Meanwhile, Levi's has kept selling its classic styles, including the relaxed-fit 505 and the more rigid, straight-leg 501, a classic style that hasn't changed much since the 1800s — it's "the ultimate original jean," as trend forecaster Samuel Trotman told fashion site High Snobiety. And it's not just full-length jeans that have become a must-have item: as music festivals became a popular destination, sales of 501 cutoffs skyrocketed. "We again dominated Coachella as the go-to uniform for festival season with Levi's 501 cutoff shorts, which were up more than 50% this quarter, taking center stage," CEO Charles Bergh said during the company's second-quarter earnings call in 2019.But it's vintage Levi's that have achieved almost Holy Grail status among the fashion-forward and eco-conscious shoppers of younger generations.Shannon Stapleton/ReutersRather than shelling out for brand-new jeans, Gen Z and millennial shoppers are scouring thrift stores and internet marketplaces for vintage Levi's. Finding the perfect pair has been elevated to an artform, with everyone from GQ to InStyle creating guides to help shoppers identify whether something's actually vintage and navigate Levi's notoriously tricky sizing. Levi's itself caught on to the trend, launching its own secondhand shop in 2020 and hiring a slate of celebrities and tastemakers, including Hailey Bieber and Jaden Smith, to promote it. Super-vintage Levi's — as in, from the 1800s — are viewed almost reverently by collectors. Case in point: one of the oldest known pairs of Levi's recently sold for $76,000 at auction. The pants, found in an old mine several years ago, have a single back pocket, suspender buttons at the waist, and show a few signs of their age, including some small holes and candle-wax marks. Still, they are considered to be in "good/wearable" condition.Still, like many retailers, Levi's is growing wary of the months ahead as inflation and fears of a recession scare off shoppers.Richard Drew/APLevi's recently cut its full-year profit forecast after falling short on third-quarter revenue as cautious consumers cut back on spending. The company has also experienced some executive changes in recent months: its president departed the company early this year after advocating against pandemic school closings and mask mandates. Levi's recently named a new president: Michelle Gass, the top executive at Kohl's, will join Levi's and eventually succeed the brand's longtime CEO, Chip Bergh. Read the original article on Business Insider.....»»

Category: personnelSource: nytNov 22nd, 2022

Ross Stores (ROST) Q3 Earnings & Sales Beat, Decline Y/Y

Ongoing inflationary pressures, increased markdowns and unfavorable timing of packaway-related costs hurt Ross Stores' (ROST) Q3 results, offset by lower incentive costs and eased freight expenses. Ross Stores, Inc. ROST reported solid third-quarter fiscal 2022 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. However, both metrics declined year over year. Results were hurt by the ongoing inflationary pressure and an increasing promotional retail environment. However, lower incentive costs and eased domestic freight expenses aided results to some extent.Ross Stores’ earnings of $1.00 per share beat the Zacks Consensus Estimate of 81 cents but declined 8.3% from $1.09 reported in the third quarter of fiscal 2021.Total sales of $4,565.5 million dropped 0.2% year over year but surpassed the Zacks Consensus Estimate of $4,364 million. In third-quarter fiscal 2022, comps declined 3% against comps growth of 14% in the year-ago quarter. Comps benefited from higher average basket size, offset by a year-over-year decline in traffic. However, traffic trends improved from the second quarter of fiscal 2022.In the quarter, the shoes category remained the key growth driver, with Florida and Texas being the top-performing regions. Sales trends continued to improve at the dd’s DISCOUNTS format from the first half. However, dd’s DISCOUNTS’ sales continued to trail Ross’s due to ongoing inflationary pressures, which have a greater impact of dd’s low-income customers.Shares of the Zacks Rank #3 (Hold) company have gained 7.6% in the past three months against the industry’s decline of 0.5%. Image Source: Zacks Investment Research Q3 InsightsThe cost of goods sold (COGS) of $3,424 million increased 2.9% year over year. As a percentage of sales, COGS was 75%, marking a year-over-year increase of 230 basis points (bps) due to lower merchandise margins, unfavorable timing of packaway-related costs and increased markdowns. The merchandise margin declined 165 bps in the quarter due to higher markdowns.Distribution costs escalated 140 bps, owing to unfavorable timing of pack-away-related expenses and deleverage from its new distribution center. However, higher expenses were somewhat offset by a 20-bps occupancy deleverage and a 75-bps decline in buying costs. Additionally, costs were offset by the easing of pressures from domestic freight expenses in the fiscal third quarter, which improved 20 bps due to the lapse of elevated freight costs period which began in the second half of fiscal 2021.Selling, general and administrative (SG&A) expenses of $693.4 million declined 4.5% year over year. SG&A, as a percentage of sales, contracted 70 bps year over year to 15.2%. The decrease resulted from lower incentive costs, which more than offset the deleveraging effect of lower comps.The operating margin of 9.8% declined 160 bps from 11.4% in third-quarter fiscal 2021. The decline can be attributed to the deleveraging effect of the comps decline, higher markdowns and unfavorable timing of packaway-related costs.Ross Stores, Inc. Price, Consensus and EPS Surprise  Ross Stores, Inc. price-consensus-eps-surprise-chart | Ross Stores, Inc. QuoteStore UpdateIn third-quarter fiscal 2022, the company completed its store expansion target for fiscal 2022, with the opening of 28 Ross stores and 12 dd’s DISCOUNTS stores. In fiscal 2022, ROST opened 91 stores, comprising 71 Ross stores and 28 dd’s DISCOUNTS stores. The company earlier anticipated closing 10 older stores in fiscal 2022.The company expects to end fiscal 2022 with 1,693 Ross stores and 322 dd’s DISCOUNTS stores, marking a net increase of 92 stores. As of Sep 30, 2022, Ross Stores operated 2,019 outlets, including 1,696 Ross stores across 40 states, the District of Columbia and Guam, and 323 dd’s DISCOUNTS stores in 21 states.FinancialsRoss Stores ended third-quarter fiscal 2022 with cash and cash equivalents of $3,906.5 million, long-term debt of $2,455.5 million, and total shareholders’ equity of $4,147 million.As of the end of the fiscal third quarter, consolidated inventories increased 11.8% from the 2021 comparable period, reflecting a significant moderation from the first half of fiscal 2022. Average store inventory increased 4% in the quarter, down from the pre-pandemic levels. Pack-away merchandise levels were 41% of the total inventories compared with 31% at the end of third-quarter fiscal 2021.The company bought back 2.8 million shares of common stock for $244 million in the fiscal third quarter. ROST remains on track to repurchase $950 million under its existing $1.9-billion share repurchase plan, which remains valid till fiscal 2023.Concurrent with the earnings release, Ross Stores declared a regular quarterly cash dividend of 31 cents per share, payable Dec 30, 2022, to shareholders of record as of Dec 6, 2022.OutlookGoing into the fiscal fourth quarter, the company anticipates the highly promotional holiday selling season and ongoing inflationary headwinds to put pressure on low-to-moderate income customers. Given the third-quarter sales momentum and improved assortments for the holiday season, the company raised its guidance for fourth-quarter fiscal 2022. Further, it expects the easiest sales and earnings comparisons for the fiscal fourth quarter.For fourth-quarter fiscal 2022, the company expects comps to be flat to down 2%, whereas it reported 9% comps growth in the prior-year quarter. Earlier, it anticipated fiscal fourth-quarter comps to decline 4-7% year over year.Earnings per share are envisioned to be $1.13-$1.26 for the fiscal fourth quarter compared with the $1.04-$1.21 mentioned earlier. The company reported earnings of $1.04 per share in the year-ago quarter.The earnings view for the fiscal fourth quarter is based on sales of flat to up 3% and the operating margin of 9.7% to 10.5%. The company reported an operating margin of 9.8% in the year-ago quarter. The operating margin view reflects gains due to the easing of significant cost pressures from ocean freight and lower incentives in the prior-year quarter, offset by the deleveraging effects of lower comps, unfavorable timing of pack-away-related costs and higher markdowns.The company anticipates a net interest income of $14 million for the fiscal fourth quarter. The tax rate is anticipated to be 23%, while shares outstanding are expected to be 342 million.Based on the year-to-date results and the fiscal fourth-quarter guidance, the company envisions earnings per share of $4.21-$4.34 for fiscal 2022. This marks an increase from the prior view of $3.84-$4.12. Notably, it reported $4.87 in fiscal 2021.Stocks to ConsiderHere are three better-ranked stocks to consider — Tecnoglass TGLS, Dollar General DG and GMS Inc. GMS.Tecnoglass, which is engaged in manufacturing and selling architectural glass and windows, and aluminum products for the residential and commercial construction industries, currently flaunts a Zacks Rank #1 (Strong Buy). TGLS has a trailing four-quarter earnings surprise of 26.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and EPS suggests growth of 40.5% and 76.4%, respectively, from the year-ago period’s reported figures.Dollar General, a discount retailer, currently carries a Zacks Rank #2 (Buy). DG has an expected EPS growth rate of 11.1% for three to five years.The Zacks Consensus Estimate for Dollar General’s current financial-year revenues and EPS suggests growth of 10.8% and 13.8%, respectively, from the year-ago reported figures. Dollar General has a trailing four-quarter earnings surprise of 2.2%, on average.GMS, a distributor of wallboard and suspended ceiling systems, currently carries a Zacks Rank #2. GMS has a trailing four-quarter earnings surprise of 10.8%, on average.The Zacks Consensus Estimate for GMS’ current financial-year revenues and EPS suggests growth of 10.8% and 10.2%, respectively, from the year-ago reported figures. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dollar General Corporation (DG): Free Stock Analysis Report Ross Stores, Inc. (ROST): Free Stock Analysis Report Tecnoglass Inc. (TGLS): Free Stock Analysis Report GMS Inc. (GMS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 21st, 2022

Deckers" (DECK) Teva Ties Up With Macy"s & UNWRP Before Holiday

Deckers' (DECK) Teva forms a partnership with Macy's. The brand also unveils the Teva x UNWRP holiday capsule. Deckers Outdoor Corporation DECK is focused on product innovations, store expansion and enhancement of e-commerce capabilities. DECK’s aim to expand its brand assortments, bring a more innovative line of products and optimize the omnichannel distribution bodes well.In recent developments, Deckers’ unit Teva announced the Artist Series Collaboration in coordination with Macy's M, just before the festive season. DECK also introduced the Teva x UNWRP holiday capsule. This footwear collection is now available at Teva.com and Macys.com besides M’s select outlets.The aforementioned partnership features one exclusive footwear silhouette based on the signature artwork from UNWRP, which is likely to encourage self-expression and outdoor exploration. We note that UNWRP, with bold and joyful artwork, is famous for its non-traditional gift wrap and home décor, elevating the gifting experience. The Teva and UNWRP limited-edition assortment is created for exploring new paths. The ReEmber silhouette brings up UNWRP's colorful designs with Teva's outdoor roots.We note that the Teva brand’s product line includes sandals, shoes and boots. In first-quarter fiscal 2023, Teva brand’s net sales increased 2% to $59.6 million and came almost in line with the consensus mark of $59.1 million. This aided Deckers’ overall sales in the reported quarter.Image Source: Zacks Investment ResearchOver the past three months, shares of this presently Zacks Rank #3 (Hold) Deckers have increased 18.4% against the industry’s 16.7% decline. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Other Players’ Efforts to Make Holiday Season More CheerfulRetailers have already begun prepping for the festive period. As the holiday season is approaching, retailers are busily expanding their omnichannel capabilities, enhancing store operations, announcing holiday deals with greater savings and boosting guests’ experience.Mega retailer Target Corporation TGT rolled out exclusive deals with higher savings to make the holiday season more delightful for its guests. TGT announced plans to hire up to 100,000 seasonal team executives to aid customers with easy shopping and seamless service throughout the season. Management stated that its Weeklong Black Friday Deals and Deal of the Day are starting three weeks earlier this year than last year so that guests can make huge savings this season. Both weekly and daily deals, which are available now, feature TGT’s best-planned prices for well-known national brands and only-at-Target exclusive labels.The retail behemoth, Walmart WMT, plans to hire about 40,000 workers, including seasonal and full-time. WMT will also offer additional hours to its existing workers. The job roles include seasonal store associates, full-time permanent truck drivers and customer care associates. WMT is making solid price investments across key categories to offer great value to its customers.Walmart is on track to transform and modernize its supply chain to add cutting-edge automation technology to its facilities. It announced opening a 1.1-million-square-foot Next Generation fulfillment center (FC) in Joliet, IL. The retailer also enriched its holiday gift assortment with increased options this season and included new brands and additional Walmart exclusives.The omnichannel player Macy’s also plans to fill more than 41,000 full and part-time seasonal positions. M took initiatives to better engage with customers and gain a plum market share. Management believes that the Polaris Strategy positions it well to navigate the dynamic retail landscape.Macy’s has also been reinforcing its omnichannel capabilities with investments in online shopping experiences, data and analytics, technology infrastructure, and better fulfillment capabilities.Image Source: Zacks Investment ResearchOver the past three months, shares of Target have lost 2.1%, whereas shares of Walmart and Macy’s have gained 1.5% and 1.6%, respectively. The S&P 500 Index has fallen 6.7% in the same time frame. Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in?  If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.>>Send me my free report on the top 5 EV stocksWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Macy's, Inc. (M): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report Deckers Outdoor Corporation (DECK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 21st, 2022

Why Is Five Below (FIVE) Up 1.8% Since Last Earnings Report?

Five Below (FIVE) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues. A month has gone by since the last earnings report for Five Below (FIVE). Shares have added about 1.8% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Five Below due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Five Below Q2 Earnings & Sales Miss, Comps Decline Y/YFive Below, Inc. came up with second-quarter fiscal 2022 results, wherein the top and bottom lines missed the Zacks Consensus Estimate. While net sales grew year over year, earnings declined sharply from the year-ago period. This extreme-value retailer for tweens, teens and beyond continued with its sluggish comparable sales performance. The soaring inflation is impacting consumers’ purchasing behavior. Five Below revisited its full-year outlook to reflect the year-to-date performance.Let’s IntrospectFive Below delivered second-quarter earnings of 74 cents a share, lower than the Zacks Consensus Estimate of 77 cents. The bottom line fell significantly from the earnings of $1.15 reported in the year-ago period.Net sales of $668.9 million increased 3.5% year over year but missed the Zacks Consensus Estimate of $679.8 million. Comparable sales for the quarter under discussion declined 5.8% against an increase of 39.2% registered in the year-ago period. While comp tickets decreased 4.3%, comp transactions fell 1.7% in the reported quarter.The gross profit slid 0.8% year over year to $228.5 million, while the gross margin contracted roughly 150 basis points to 34.2% due to occupancy deleverage and higher freight expenses.We note that SG&A expenses shot up 19.7% to $172.5 million, while as a percentage of net sales, the same deleveraged 350 basis points to 25.8%. The operating income was $56 million for the quarter under discussion, down from the $86.2 million reported in the year-ago period. Also, the operating margin shrunk approximately 500 basis points to 8.4% during the quarter due to a lower gross margin and SG&A expenses.FinancialsFive Below ended the quarter with cash and cash equivalents of $155.1 million and short-term investment securities of $117.3 million. Total shareholders’ equity was $1,162.6 million as of Jul 30, 2022. Year to date, Five Below repurchased 247,132 shares for approximately $40 million in the quarter.Five Below anticipates gross capital expenditures of approximately $235 million in fiscal 2022, excluding tenant allowances. This includes about 160 new store openings, more than 250 conversions to the Five Beyond format, the opening of a new distribution center in Indiana and investments in systems and infrastructure.Store UpdatesFive Below opened 27 new stores in the reported quarter. This took the total count to 1,252 stores in 40 states as of Jul 30, 2022, reflecting an increase of 11.7% from the year-ago count. The company plans to open about 45 new stores in the third quarter and 160 new stores in fiscal 2022. For the next fiscal year, it plans to open more than 200 stores.GuidanceFive Below envisions third-quarter fiscal 2022 net sales in the range of $600 million-$619 million, the midpoint of which is higher than $607.6 million reported in the year-ago period.The company expects a 7% to 9% decline in comparable sales in the third quarter against an increase of 14.8% registered in the year-ago period. Management anticipates third-quarter earnings between 8 cents and 19 cents per share. This suggests a decline from the earnings of 43 cents reported in the prior-year period.Five Below foresees a contraction of about 540 basis points in the third-quarter operating margin due to the deleverage of fixed expenses on the negative comp, higher store expenses and increased marketing expenses, partly offset by disciplined expense management.For the fourth quarter, management estimates a low-single-digit decline in comparable sales. However, it expects operating margin expansion in the final quarter versus last year.Management projected fiscal 2022 net sales in the band of $2.97 billion-$3.02 billion. The current view is lower than the prior forecast of $3.04 billion to $3.12 billion. The company reported net sales of $2.85 billion last fiscal. Five Below anticipates comparable sales to be down 3-5% against an increase of 30.3% recorded in the prior year. The company had earlier projected comparable sales to be flat to down 2%.Management guided earnings between $4.26 and $4.56 per share. The current view is also lower than the prior forecast of $4.85 to $5.24 per share. The company reported earnings of $4.95 in fiscal 2021. The company expects its operating margin to be approximately 11%, lower than the 13.3% reported last year, stemming from deleverage on fixed costs and higher SG&A expenses from more normalized marketing spend, partially offset by cost-containment efforts.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates revision.The consensus estimate has shifted -52.94% due to these changes.VGM ScoresCurrently, Five Below has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Five Below has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.Performance of an Industry PlayerFive Below is part of the Zacks Retail - Miscellaneous industry. Over the past month, Dick's Sporting Goods (DKS), a stock from the same industry, has gained 3.8%. The company reported its results for the quarter ended July 2022 more than a month ago.Dick's reported revenues of $3.11 billion in the last reported quarter, representing a year-over-year change of -5%. EPS of $3.68 for the same period compares with $5.08 a year ago.For the current quarter, Dick's is expected to post earnings of $2.21 per share, indicating a change of -30.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.3% over the last 30 days.The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Dick's. Also, the stock has a VGM Score of A. This Little-Known Semiconductor Stock Could Be Your Portfolio’s Hedge Against Inflation Everyone uses semiconductors. But only a small number of people know what they are and what they do. If you use a smartphone, computer, microwave, digital camera or refrigerator (and that’s just the tip of the iceberg), you have a need for semiconductors. That’s why their importance can’t be overstated and their disruption in the supply chain has such a global effect. But every cloud has a silver lining. Shockwaves to the international supply chain from the global pandemic have unearthed a tremendous opportunity for investors. And today, Zacks' leading stock strategist is revealing the one semiconductor stock that stands to gain the most in a new FREE report. It's yours at no cost and with no obligation.>>Yes, I Want to Help Protect My Portfolio During the RecessionWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Five Below, Inc. (FIVE): Free Stock Analysis Report DICK'S Sporting Goods, Inc. (DKS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 30th, 2022

Walmart (WMT) Opens New Fulfillment Center Before Holiday Season

Walmart (WMT) opens a 1.1 million-square-feet Next Generation fulfillment center (FC) in Joliet, IL. The high-tech FC will start operations ahead of the holiday season. Walmart Inc. WMT is on track to transform and modernize its supply chain to add cutting-edge automation technology to its facilities. The retail behemoth announced the opening of a 1.1 million-square-foot Next Generation fulfillment center (FC) in Joliet, IL.The Joliet FC, the first of four next-gen FCs, will start operations ahead of the holiday season to support next or two-day shipping to customers in Illinois, Indiana and Wisconsin. Walmart FCs store millions of products sold on Walmart.com, which are picked, packed and shipped directly to customers. Also, the new state-of-the-art FCs will fulfill Marketplace products shipped by Walmart Fulfillment Services (WFS) and the company’s end-to-end fulfillment service for third-party e-commerce sellers.Earlier this year, Walmart announced four next-gen FCs featuring a new patent-pending process fueled by people, robotics and machine learning combined. The system will streamline a manual 12-step process into five steps, namely unload, receive, pick, pack and ship.Image Source: Zacks Investment ResearchWalmart’s Holiday Season Initiatives on TrackLast week, Walmart revealed plans to employ about 40,000 seasonal and full-time workers ahead of the shopping season. The company will also offer additional hours to its existing workers. Walmart is making solid price investments across key categories to offer great value to its customers. It is also offering more rollbacks to boost savings on gifts like toys, electronics, beauty and home, to name a few.The omnichannel retailer has enriched its holiday gift assortment with increased options this season and has included new brands and additional Walmart exclusives. The company has invested in the core gifting categories and strengthened its inventory for popular electronics like TVs, tablets, watches, wireless headphones, wireless phones, along with home goods like furniture, decor, appliances and robotic vacuums.Walmart is also making efforts to ease the returns process, as part of which it announced that Walmart+ members could avail of new return options, including Holiday Guarantee, Curbside Returns and Return Pickup from Home, starting October. The company is focused on making customers’ omnichannel shopping more convenient through a better site experience, personalized shopping (through virtual try-on and "View In Your Home," options), fast and easy pickup and delivery services, refreshed holiday wish lists, and a registry suite.We believe that the newly opened state-of-the-art FC will aid Walmart in providing a more seamless customer experience during the upcoming holiday season. The Zacks Rank #3 (Hold) company’s stock has gained 9.5% in the past three months compared with the industry’s 6.3% growth.Solid Retail BetsWe have highlighted three better-ranked stocks, Ulta Beauty ULTA, Kroger KR and DICK'S Sporting Goods, Inc. DKS.Ulta Beauty, which operates as a retailer of beauty products, sports a Zacks Rank #1 (Strong Buy). Ulta Beauty has a trailing four-quarter earnings surprise of 32.8%, on average. ULTA has an expected EPS growth rate of 11.9% for three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Ulta Beauty’s current financial year sales suggests growth of 13.7% from the year-ago reported number.Kroger, a renowned grocery retailer, currently carries a Zacks Rank #2 (Buy). KR has an expected EPS growth rate of 11.7% for three to five years.The Zacks Consensus Estimate for Kroger’s current financial year revenues and earnings per share (EPS) suggests growth of 7.8% and 9.8%, respectively, from the year-ago reported figure. KR has a trailing four-quarter earnings surprise of 15.7%, on average.DICK'S Sporting, which operates as a sporting goods retailer, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of nearly 21.4%, on average.The Zacks Consensus Estimate for DICK'S Sporting’s current financial year earnings per share has risen from $11.33 to $11.42 in the past 30 days. DKS has an expected EPS growth rate of 5% for three to five years. FREE Report: The Metaverse is Exploding! Don’t You Want to Cash In? Rising gas prices. The war in Ukraine. America's recession. Inflation. It's no wonder why the metaverse is so popular and growing every day. Becoming Spider Man and fighting Darth Vader is infinitely more appealing than spending over $5 per gallon at the pump. And that appeal is why the metaverse can provide such massive gains for investors. But do you know where to look? Do you know which metaverse stocks to buy and which to avoid? In a new FREE report from Zacks' leading stock specialist, we reveal how you could profit from the internet’s next evolution. Even though the popularity of the metaverse is spreading like wildfire, investors like you can still get in on the ground floor and cash in. Don't miss your chance to get your piece of this innovative $30 trillion opportunity - FREE.>>Yes, I want to know the top metaverse stocks for 2022>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Walmart Inc. (WMT): Free Stock Analysis Report The Kroger Co. (KR): Free Stock Analysis Report DICK'S Sporting Goods, Inc. (DKS): Free Stock Analysis Report Ulta Beauty Inc. (ULTA): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 29th, 2022

Auto Roundup: CPRT"s Quarterly Results, GPI"s Portfolio Optimization & More

Copart (CPRT) delivers a strong show in fourth-quarter fiscal 2022. Group 1 (GPI) strengthens its UK portfolio with the buyout of Essex-based BMW/MINI dealership. Last week, China vehicle sales data for August was released. Vehicle sales in the world’s largest car market rose 32.1% year over year to 2.38 million units for the third consecutive month on the back of relaxation of COVID-induced curbs as well as stimulus packages offered by the government in an effort to revive the market. Nonetheless, the volumes declined slightly from 2.42 million units sold in July. Sales in the first eight months of 2022, however, inched up 1.7% year on year. Sales of new energy vehicles more than doubled to 632,000 cars from August 2021 levels.On the news front, the online auto auction leader Copart, Inc. CPRT released its quarterly results, wherein it beat both the top-and-bottom-line estimates. Auto retailers Sonic Automotive SAH and Group 1 Automotive GPI continued their expansion initiatives. Focused on portfolio optimization, GPI acquired a BMW/MINI dealership in London. Meanwhile, Sonic added Roseville to its EchoPark footprint.Auto equipment provider Magna International MGA also made the headlines with its collaboration with an autonomous robotics company, Cartken, for fully autonomous delivery robots. Magna’s intensive focus on developing a wide range of products, from electrified power trains and battery enclosures to advanced driver assistance systems, is fueling its long-run prospects.Finally, in what could be one of Europe’s largest IPO, Volkswagen AG VWAGY announced its plans to proceed with the public listing of its celebrated sports car brand, Porsche. The IPO is crucial as it comes at a time when European stocks are staggering amid very high inflation rates and a spiraling energy crisis in the continent due to the Russia-Ukraine standoff. At such crossroads, this IPO is believed to test investors’ confidence.Last Week’s Top StoriesCopart reported fourth-quarter fiscal 2022 (ended Jul 31, 2022) adjusted earnings per share of $1.13, topping the Zacks Consensus Estimate of $1.08. The outperformance was due to higher-than-anticipated revenues from vehicle sales. The bottom line rose 9.7% year over year from $1.03 reported in the prior-year quarter. Our estimate for fiscal fourth-quarter 2022 EPS was $1.09. Revenues of $883.4 million beat the Zacks Consensus Estimate of $873 million. The top line also increased 18% from the year-ago reported figure of $748.6 million. Our estimate for the top line was $887.3 million.Fiscal fourth-quarter service revenues came in at $707.8 million, up from $620 million recorded in the year-earlier period. Vehicle sales totaled $175.5 million in the quarter, up from the prior-year level of $128.5 million. Copart had cash and cash equivalents of $1,384.2 million as of Jul 31, 2022, compared with $1,048.3 million as of Jul 31, 2021. Long-term debt reduced to $1.9 million at the end of the reported quarter from $397.6 million as of Jul 31, 2021.Volkswagen announced that it intends to plan Porsche’s IPO at the end of September or the beginning of October this year, subject to capital market conditions. As part of the preparation for the listing, Porsche’s stock has been split into 50% ordinary shares and 50% non-voting preferred stock. VWAGY has decided to list Porsche on the Frankfurt Stock Exchange and offer 25% of preferred stock to private investors through the IPO. Porsche is expected to value in the range of $60-$85 billion.Porsche’s status and reputation as a luxury brand enable it to bump up prices, making it a cash-spinner for the Volkswagen Group. Porsche’s operating profit jumped 22% in the first half of this year, while Volkswagen registered an 8% fall. The IPO would thus be a significant step for Volkswagen to pump up funds to fuel its ambitious EV plans. If the IPO is successful, 49% of its proceeds will be distributed to its shareholders in the form of a special dividend, likely to be paid at the beginning of 2023.Magna and Cartken have inked an agreement per which the former will manufacture Cartken’s autonomous delivery robot fleet to cater to the booming demand for last-mile delivery. The manufacture of Cartken’s Model C robots has begun at a Magna facility in Michigan. There are plans to elevate the yield over the next few months and include additional autonomous delivery models based on the same platform for different use applications and robot-as-a-service business models.Magna is a top player in the domain of automobility, producing a massive number of vehicles across a range of different models. It is already riding on the strength of its portfolio and the changing dynamics of the auto industry. The latest collaboration adds another feather to Magna’s cap. The partnership, leveraging Magna’s know-how in automotive mobility and advanced technologies, is a step toward offering sustainable and cost-effective solutions for last-mile delivery challenges. It will benefit both companies in scaling up their respective businesses.Group 1 announced the buyout of an Essex-based BMW/MINI dealership and a collision center. With this buyout, Group 1 has expanded its foothold further in the UK. The latest purchase has expanded GPI’s UK operations to 56 dealerships and is set to add $80 million to the company’s total annualized sales. The move comes a year after the auto retailer added nine car dealerships to its UK operation with the buyout of Robinsons Motor.Group 1’s acquisitions of dealerships and franchises to expand and optimize its portfolio are bolstering the firm’s prospects. In 2021, the company completed transactions representing $2.5 billion of acquired revenues. So far in 2022, Group 1 completed transactions accounting for $740 billion of acquired revenues.GPI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Sonic announced the opening of its newest retail hub in Roseville near Sacramento, CA. This expands its EchoPark Automotive brand. The new facility will be EchoPark's 41st location to date and second in California. Customers will now be able to shop in person or take delivery of their purchase at the new location after browsing through and choosing products on the EchoPark website. From booking an appointment to assisting in doorstep delivery, the website ensures it all.The EchoPark unit has been the major growth engine of Sonic. The EchoPark brand reached more than 30% of the U.S. population at 2021-end and aims for 90% U.S. population coverage by 2025.  Importantly, Sonic targets 575,000-unit sales with a nationwide distribution network of more than 140 EchoPark stores by mid-decade. It aims to achieve $14 billion in annual EchoPark revenues by 2025, driving toward the annual vehicle sales goal of 2 million units at maturity.Price PerformanceThe following table shows the price movement of some of the major auto players over the last week and six-month period.Image Source: Zacks Investment ResearchWhat’s Next in the Auto Space?Industry watchers and car enthusiasts will keep a close eye on the 2022 Detroit Auto Show beginning on Sep 14.  Also, stay tuned for any updates on how automakers will tackle the semiconductor shortage and make changes in their business operations. This Little-Known Semiconductor Stock Could Be Your Portfolio’s Hedge Against Inflation Everyone uses semiconductors. But only a small number of people know what they are and what they do. If you use a smartphone, computer, microwave, digital camera or refrigerator (and that’s just the tip of the iceberg), you have a need for semiconductors. That’s why their importance can’t be overstated and their disruption in the supply chain has such a global effect. But every cloud has a silver lining. Shockwaves to the international supply chain from the global pandemic have unearthed a tremendous opportunity for investors. And today, Zacks' leading stock strategist is revealing the one semiconductor stock that stands to gain the most in a new FREE report. It's yours at no cost and with no obligation.>>Yes, I Want to Help Protect My Portfolio During the RecessionWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Magna International Inc. (MGA): Free Stock Analysis Report Group 1 Automotive, Inc. (GPI): Free Stock Analysis Report Copart, Inc. (CPRT): Free Stock Analysis Report Sonic Automotive, Inc. (SAH): Free Stock Analysis Report Volkswagen AG Unsponsored ADR (VWAGY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 13th, 2022

3 Top REITs to Buy From a Prospering Retail REIT Industry

Zacks REIT and Equity Trust - Retail industry stocks KIM, NNN and STOR are in focus amid pent-up consumer demand with waning of the pandemic impact and favorable job-and-wage growth environment, supporting consumer confidence. The Zacks REIT and Equity Trust - Retail industry constituents are poised to benefit from the favorable job-and-wage growth environment, which supports consumer confidence, and extra savings accumulated during the pandemic. Also, there is pent-up consumer demand as consumers look for an exclusive in-store shopping experience following the pandemic downtime.Focus on e-commerce resistant sectors, efforts to support omni-channel retailing, adaptive reuse capabilities and opportunities emanating from consolidations have poised Kimco Realty Corporation KIM, National Retail Properties, Inc. NNN and STORE Capital Corporation STOR well for growth. However, inflationary pressure and economic slowdown might cast a pall on recovery. Also, higher e-commerce adoption might continue to affect retail landlords’ cash flows.Industry DescriptionThe Zacks REIT and Equity Trust - Retail industry represents a group of REITs engaged in owning, developing, managing and renting space in a variety of retail real estates. Among these are regional malls, outlet centers, grocery-anchored shopping centers and power centers, including big-box retailers. Also, net lease REITs enjoy the ownership of freestanding properties, wherein both rent and the majority of operating expenses for the properties are borne by tenants. The overall health of the economy, job market and consumer spending are the main drivers of retail REITs. The location of properties and trade area demographics play key roles in determining the demand for spaces. Although dwindling footfall, store closures and retailer bankruptcies have been bothering this asset category, it is on its path to a rebound amid an improving economy and solid consumer spending.What's Shaping the Future of the REIT and Equity Trust - Retail Industry?Consumer Confidence, Pent-up Consumer Demand to Fuel Recovery: Consumers seem optimistic and their confidence gets a boost from a favorable job-and-wage growth environment. They are likely to continue enjoying their spending power with rising income backed by wage compensation and extra savings accumulated during the pandemic. Also, there are signs of peaking inflation as prices in July remained unchanged from June. Further, this industry is poised to benefit from the pent-up consumer demand as consumers look for exclusive in-store shopping experience following the pandemic downtime. Amid these, retailers’ focus has now shifted from the closing of stores to the revival of their growth plans, resulting in more demand for physical store spaces and paving the way for the retail REITs to experience gain in leasing activity, pricing power and flourish. Retailers are also focusing on investments in their stores because apart from serving as showrooms, physical stores offer a convenient location for pick-up or exchange of goods, helping retailers counter the increasing costs associated with last-mile delivery. Furthermore, amid limited availability and with the rapid formation of new businesses in the retail sector, lease signings, rent and occupancies in retail real estates are likely to get a boost.Omni-Channel Strategy, Structural Changes Remain Key Focus: Omni-channel is the focal point for retailers. Physical stores will be a vital sales channel over the long run because though there is convenience in online shopping, it cannot replace the benefits and satisfaction of visiting a brick-and-mortar store. This is quite evident from the recent foot traffic at retail destinations. Moreover, digitally-native brands are likely to keep boosting their physical presence in the days to come as part of the omni-channel strategy as the opening of stores helps them improve their connection with customers and drive expansion. In fact, for retailers, the focus now is not only on boosting their online presence but also on maintaining brick-and-mortar stores in the best locations, which in turn is raising hopes for retail REITs that focus on such locations. Also, with the waning impact of the pandemic, entertainment and dining concepts are seeing a revival, boosting retail REIT’s growth scopes.Repurposing and Conversions Pick Up Pace: Adaptive reuse as well as the conversion of malls into distribution hubs has accelerated as these distribution centers, being situated close to consumers of retailers, facilitate faster delivery of products and aid retailers in improving services, lower costs and make optimum asset utilization. Also, retail REITs are now focusing on adaptive reuse, which includes multifamily, hotel, office and medical components, resulting in the construction of mixed-use real estate destinations. Moreover, the open-air format and pick-up concepts have been helping the landlords to lure tenants. As the structural changes involve a huge outlay, the ones with solid balance-sheet strength are well poised to opt for such moves.Inflationary Pressure, Economic Slowdown Cast a Pall on Recovery: Higher material and operating costs remain a concern for the retailers and this, in turn, might cast a pall on their landlords’ cash flows. Moreover, a slowdown in the economy and the depletion of savings might temper consumers’ willingness to spend to some extent. Also, with office usage affected and international tourism yet to regain lost ground, certain submarkets remain choppy.Higher E-commerce Adoption to Remain a Concern: Consumers’ habits have transformed at a rapid pace over the past years and traffic at retail real estates has suffered, with e-commerce capturing market share from brick-and-mortar stores. Social distancing measures further aggravated this as even the reluctant ones, who once favored in-store purchases, started preferring online purchases to avoid physical contact. Though the preference for brick-and-mortar stores has again picked up pace now, the concern with higher e-commerce adoption is still there as more consumers have been learning about the convenience of online purchases.Zacks Industry Rank Indicates Bright ProspectsThe Zacks REIT and Equity Trust - Retail industry is housed within the broader Zacks Finance sector. It carries a Zacks Industry Rank #57, which places it in the top 23% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of the positive funds from operations (FFO) per share outlook for the constituent companies in aggregate. Looking at the aggregate FFO per share estimate revisions, it appears that analysts are gaining confidence in this group’s growth potential. Over the past year, the industry’s FFO per share estimate for 2022 moved 3.7% north.Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.Industry Underperfoms Sector & S&P 500The REIT and Equity Trust - Retail Industry has underperformed the broader Zacks Finance sector as well as the S&P 500 composite over the past year.The industry has declined 22.1% during this period compared with the S&P 500’s fall of 14% and the broader Finance sector’s decline of 12.4%.One-Year Price PerformanceIndustry's Current ValuationOn the basis of forward 12-month price-to-FFO (funds from operations), which is a commonly used multiple for valuing Retail REITs, we see that the industry is currently trading at 13.84X compared with the S&P 500’s forward 12-month price-to-earnings (P/E) of 17.07X. The industry is trading above the Finance sector’s forward 12-month P/E of 13.55X. This is shown in the chart below.Forward 12 Month Price-to-FFO (P/FFO) RatioOver the last five years, the industry has traded as high as 18.49X, as low as 10.20X, with a median of 15.39X.3 Retail REIT Stocks Worth Betting OnKimco Realty Corporation: Jericho, NY-based Kimco Realty is a leading publicly traded owner and operator of open-air, grocery-anchored shopping centers and mixed-use assets in the United States.The company’s acquisition of the grocery-anchored shopping center owner — Weingarten Realty Investors — in 2021 has been beneficial as the combined company is poised well to benefit from the increased scale, density in the key Sun Belt markets and a broader redevelopment pipeline.Kimco is expected to benefit from its presence in the drivable first-ring suburbs of its top major metropolitan Sunbelt and coastal markets, which offer several growth levers. Also, the conveniently located grocery-anchored properties and focus on last mile assets augur well. Kimco’s strong balance-sheet position helps it to sail through any mayhem and bank on growth opportunities.Currently, Kimco carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for this year’s FFO per share has been revised marginally upward to $1.56 over the past month, indicating a year-on-year improvement of 13%. The stock has appreciated 7.7% so far in the quarter.  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. National Retail Properties: This Orlando, FL -based retail REIT focuses on investing in high-grade retail properties usually subject to long-term, net leases. It is poised to gain from the selective acquisition of more than $150 million in new properties in the second quarter.With a portfolio of 3,305 properties in 48 states with a gross leasable area of approximately 33.8 million square feet and a weighted average remaining lease term of 10.6 years as of Jun 30, 2022, National Retail Properties is well poised to benefit from the industry’s rebound.Currently, NNN carries a Zacks Rank #2 and has a long-term growth rate of 4%. Moreover, for 2022, the stock has seen the Zacks Consensus Estimate for FFO per share being revised marginally upward to $3.18 over the past month. This also suggests an increase of 3.9% year over year. The stock has also gained 4.4% quarter to date.STORE Capital Corporation: This Scottsdale, AZ-based STORE Capital is engaged in the acquisition, investment and management of Single Tenant Operational Real Estate. This REIT has emerged as one of the fastest-growing net-lease REITs. Its customers consist of regional and national companies with a strong track record of growth. STORE Capital has a diverse investment portfolio. Also, geographically, its investments are spread across 49 states.This diversification is likely to continue to aid STOR to enjoy steady rental revenues. The company is also active on the investment front and capital recycling. It is poised to benefit from an increase in the real estate investment portfolio size.Its direct origination model results in a healthy and active investment pipeline, and the company’s focus on service, manufacturing and service-oriented retail industries, which are essential, helps secure steady cash flows.STORE Capital holds a Zacks Rank of 2, at present. The Zacks Consensus Estimate for the ongoing year’s FFO per share has been revised marginally upward over the past week to $2.26. The FFO per share figure for 2022 also indicates a projected increase of 20.2%, year on year. The stock has appreciated 3% so far in the quarter. Note: Funds from operations (FFO) is a widely used metric to gauge the performance of REITs rather than net income as it indicates cash flow from their operations. FFO is obtained after adding depreciation and amortization to earnings and subtracting the gains on sales. Want to Know the #1 Semiconductor Stock for 2022? Few people know how promising the semiconductor market is. Over the last couple of years, disruptions to the supply chain have caused shortages in several industries. The absence of one single semiconductor can stop all operations in certain industries. This year, companies that create and produce this essential material will have incredible pricing power. For a limited time, Zacks is revealing the top semiconductor stock for 2022. You'll find it in our new Special Report, One Semiconductor Stock Stands to Gain the Most. Today, it's yours free with no obligation.>>Give me access to my free special report.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kimco Realty Corporation (KIM): Free Stock Analysis Report National Retail Properties (NNN): Free Stock Analysis Report STORE Capital Corporation (STOR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 2nd, 2022

Five Below (FIVE) Q2 Earnings & Sales Miss, Comps Decline Y/Y

Five Below's (FIVE) second-quarter results reflect a comparable sales decline of 5.8%. The company provides a soft fiscal 2022 view. Five Below, Inc. FIVE came up with second-quarter fiscal 2022 results, wherein the top and bottom lines missed the Zacks Consensus Estimate. While net sales grew year over year, earnings declined sharply from the year-ago period. This extreme-value retailer for tweens, teens and beyond continued with its sluggish comparable sales performance. The soaring inflation is impacting consumers’ purchasing behavior. Five Below revisited its full-year outlook to reflect the year-to-date performance.Despite lower-than-expected results, shares of Five Below were up 5.1% during the after-market trading session on Aug 31. Management stated that the company remains focused on long-term growth opportunities and the Triple-Double vision. It is optimistic about opening 1,000 new stores in the coming years. The company also looks to expand the Five Beyond concept.Let’s IntrospectFive Below delivered second-quarter earnings of 74 cents a share, lower than the Zacks Consensus Estimate of 77 cents. The bottom line fell significantly from the earnings of $1.15 reported in the year-ago period.Net sales of $668.9 million increased 3.5% year over year but missed the Zacks Consensus Estimate of $679.8 million. Comparable sales for the quarter under discussion declined 5.8% against an increase of 39.2% registered in the year-ago period. While comp tickets decreased 4.3%, comp transactions fell 1.7% in the reported quarter.The gross profit slid 0.8% year over year to $228.5 million, while the gross margin contracted roughly 150 basis points to 34.2% due to occupancy deleverage and higher freight expenses.We note that SG&A expenses shot up 19.7% to $172.5 million, while as a percentage of net sales, the same deleveraged 350 basis points to 25.8%. The operating income was $56 million for the quarter under discussion, down from the $86.2 million reported in the year-ago period. Also, the operating margin shrunk approximately 500 basis points to 8.4% during the quarter due to a lower gross margin and SG&A expenses.Five Below, Inc. Price, Consensus and EPS Surprise Five Below, Inc. price-consensus-eps-surprise-chart | Five Below, Inc. QuoteFinancialsFive Below ended the quarter with cash and cash equivalents of $155.1 million and short-term investment securities of $117.3 million. Total shareholders’ equity was $1,162.6 million as of Jul 30, 2022. Year to date, Five Below repurchased 247,132 shares for approximately $40 million in the quarter.Five Below anticipates gross capital expenditures of approximately $235 million in fiscal 2022, excluding tenant allowances. This includes about 160 new store openings, more than 250 conversions to the Five Beyond format, the opening of a new distribution center in Indiana and investments in systems and infrastructure.Store UpdatesFive Below opened 27 new stores in the reported quarter. This took the total count to 1,252 stores in 40 states as of Jul 30, 2022, reflecting an increase of 11.7% from the year-ago count. The company plans to open about 45 new stores in the third quarter and 160 new stores in fiscal 2022. For the next fiscal year, it plans to open more than 200 stores.GuidanceFive Below envisions third-quarter fiscal 2022 net sales in the range of $600 million-$619 million compared with the $607.6 million reported in the year-ago period. We note that the company’s sales projection was shy of the Zacks Consensus Estimate of $631.8 million.The company expects a 7% to 9% decline in comparable sales in the third quarter against an increase of 14.8% registered in the year-ago period. Management anticipates third-quarter earnings between 8 cents and 19 cents per share. This suggests a decline from the earnings of 43 cents reported in the prior-year period. The Zacks Consensus Estimate for third-quarter earnings per share currently stands at 28 cents.Five Below foresees a contraction of about 540 basis points in the third-quarter operating margin due to the deleverage of fixed expenses on the negative comp, higher store expenses and increased marketing expenses, partly offset by disciplined expense management.For the fourth quarter, management estimates a low-single-digit decline in comparable sales. However, it expects operating margin expansion in the final quarter versus last year.Management projected fiscal 2022 net sales in the band of $2.97 billion-$3.02 billion, lower than the consensus estimate of $3.06 billion. The current view is also lower than the prior forecast of $3.04 billion to $3.12 billion. The company reported net sales of $2.85 billion last fiscal.Five Below anticipates comparable sales to be down 3-5% against an increase of 30.3% recorded in the prior year. The company had earlier projected comparable sales to be flat to down 2%.Management guided earnings between $4.26 and $4.56 per share, falling short of the consensus mark of $4.81. The current view is also lower than the prior forecast of $4.85 to $5.24 per share. The company reported earnings of $4.95 in fiscal 2021.The company expects its operating margin to be approximately 11%, lower than the 13.3% reported last year, stemming from deleverage on fixed costs and higher SG&A expenses from more normalized marketing spend, partially offset by cost-containment efforts.Over the past six months, shares of this Zacks Rank #3 (Hold) company have fallen 22.8% compared with the industry’s decline of 12.6%.3 Key PicksHere we have highlighted three better-ranked stocks, namely Dillard's DDS, Ulta Beauty ULTA and Costco COST.Dillard's, which operates retail department stores, sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of nearly 215%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Dillard's current financial-year sales suggests growth of nearly 6% from the year-ago period. DDS has an expected EPS growth rate of 14.6% for three to five years.Ulta Beauty, which operates as a retailer of beauty products, sports a Zacks Rank #1. Ulta Beauty has a trailing four-quarter earnings surprise of 32.8%, on average. ULTA has an expected EPS growth rate of 11.9% for three to five years.The Zacks Consensus Estimate for Ulta Beauty’s current financial-year sales suggests growth of 13.7% from the year-ago reported number.Costco, which operates membership warehouses, currently carries a Zacks Rank #2 (Buy). COST has an expected EPS growth rate of 9.2% for three to five years.The Zacks Consensus Estimate for Costco’s current financial-year revenues suggests growth of 15.4% from the year-ago reported figure. COST has a trailing four-quarter earnings surprise of 9.7%, on average. Zacks' Top Picks to Cash in on Electric Vehicles Big money has already been made in the Electric Vehicle (EV) industry. But, the EV revolution has not hit full throttle yet. There is a lot of money to be made as the next push for future technologies ramps up. Zacks’ Special Report reveals 5 picks investorsSee 5 EV Stocks With Extreme Upside Potential >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dillard's, Inc. (DDS): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report Ulta Beauty Inc. (ULTA): Free Stock Analysis Report Five Below, Inc. (FIVE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 1st, 2022

Futures Bounce, Kashkari Unhappy As Post-Jackson Hole Rout Fizzles

Futures Bounce, Kashkari Unhappy As Post-Jackson Hole Rout Fizzles After revealing that he was so "happy" he danced a jig when stocks tumbled after Powell's J-Hole speech sparked a market rout on Friday, we can only imagine that Neel Kashkari's face looked like this when he saw the market update this morning... When he turned on his bbg this morning pic.twitter.com/h6QqIcfgSV — zerohedge (@zerohedge) August 30, 2022 ... because after two days of selling, risk assets are sharply higher this morning, with S&P futures rising 0.8% and Nasdaq 100 futs rising 1.1%, as investor sentiment stabilized, while 10Y Treasury yields slid 5bps, the BBG dollar index lost 0.3%, and oil tumbled, 4% reversing most of Monday's gains. In premarket trading, cryptocurrency-tied stocks climbed as Bitcoin rose: Marathon Digital and Coinbase lead cryptocurrency-exposed stocks higher in premarket trading as Bitcoin trades in a narrow band around $20,000 for the fifth consecutive session: Marathon Digital +5.7%, Coinbase +3.7%, Riot Blockchain +4.9%; Twitter slipped after Elon Musk cited recent accusations from a whistle-blower as a new reason to terminate the $44 billion takeover. Here are some other notable premarket movers: Bed Bath & Beyond (BBBY US) shares jump as much as 16% in premarket trading, putting the home products retailer on track for a third session of straight gains after Monday’s 25% surge. Baidu (BIDU US) shares rise as much as 4.5% in premarket trading, leading China stocks higher, after the internet search company’s profit beat analyst estimates. Gran TierraEnergy (GTE US) shares jump as much as 8.7% in premarket trading, after the oil & gas company said it would buy back as many as 36m shares. Nikola stocks slumped after filing for At-the-Market stock offering With markets once again very volatile, Credit Suisse recommended investors go underweight global equities (or at least short Credit Suisse bank itself) following the Jackson Hole symposium, while JPMorgan Chase strategists say that a reading on the US labor market that spells bad news for the economy is actually a bullish signal for stocks. “The markets are spooked because they are afraid that the Fed could create a hard landing -- that they’ll raise rates into a recession and that will be really painful for the economy and for corporate profits,” Terri Spath, chief investment officer at Zuma Wealth LLC, said on Bloomberg Television Minneapolis Fed President Neel Kashkari said sharp stock-market losses show investors have got the message that the US central bank is determined to contain inflation. “People now understand the seriousness of our commitment to getting inflation back down to 2%,” he said; it wasn't clear what he said this morning when he saw futures sharply higher. In Europe, the Stoxx 50 rallied 1.3%. DAX outperforms, adding 1.5%, FTSE 100 lags, adding 0.4%. Retailers, banks and tech are the strongest-performing sectors while energy companies underperformed as prices plunged on signs that the region is stepping up efforts to curb a crisis. Here are some of the biggest European movers today: Banks and lenders lead a broader rebound in European stocks as yields rise in the UK, with banks in the country resuming trade following Monday’s holiday. Adevinta shares rise as much as 16%, with analysts noting a beat on earnings from the classified advertising firm, along with a strong performance in its Mobile arm and reassuring guidance. Aker Solutions shares rise as much as 17% after the Norwegian offshore firm said it would form a joint venture with Schlumberger and Subsea 7. Pareto notes “significant” cost synergies. Bango shares jump as much as 15% after Liberum increased their price target to a Street high. The broker said the acquisition of NTT DOCOMO’s payments business helps accelerate Bango’s growth strategy. Munters shares rise as much as 8.7% after the Swedish industrial cooling and climate solutions manufacturer said it had received its “largest order ever” for a data center in the US. Technoprobe shares gain as much as 2.5% in Milan as Mediobanca increased its PT on the stock to EU9.10 from EU8.6 ahead of what the broker expects to be “another robust release” on Sep. 27. Diurnal Group shares soar as much as 136%, the most since January 2019, after Neurocrine Biosciences agreed to buy the specialty pharmaceutical company for 27.5p in cash per share. Carrefour shares fall as much as 2.7%, after JPMorgan cut its recommendation on the French grocer to neutral, noting “lackluster” operating momentum and a “lack of short-term catalysts.” Bunzl shares fall as much as 8.1%, the most intraday since March 2020, after the supplies distributor reported 1H results that disappointed, according to Interactive Investor. European mining stocks underperforms all other European industry groups as the regional equity benchmark advances, after iron ore and base metals fell amid concerns over demand in China. Warsaw stocks are worst performers globally so far in August, down 8.2%, on the way to largest monthly drop since April as a domino effect from Europe’s gas crisis hits Polish companies. Asian equities rebounded from a post-Jackson Hole slide, with investors focusing on earnings on the region’s busiest day this season. The MSCI Asia Pacific Index added as much as 1% following Monday’s 2.2% slump, lifted by technology and financial shares. Indian and Japanese shares were among the region’s best performers, while benchmarks in China and Hong Kong declined. Chinese search-engine operator Baidu Inc. and Industrial and Commercial Bank of China Ltd., the world’s biggest bank by assets, were among the 110 MSCI Asia Pacific Index members to report results Tuesday. Investors had been bracing for a poor earnings season in a quarter marred by China’s lockdowns, but an analysis by Bloomberg Intelligence shows the results have surprised to the upside so far. While Asian stocks are set for a 1.1% monthly slump in the wake of Federal Reserve Chair Jerome Powell’s hawkish comments last week, there’s a possibility that the region’s valuations could attract investors, said Christina Woon, an Asian equities investment director at Abrdn in Singapore. Asia has “more of a relative buffer in valuations” given investors are already quite cautious toward the region, Woon said in a Bloomberg TV interview. Many of Asia’s quality companies are “producing earnings that are holding up well,” which may support stock performances, she added. China tech stocks in Hong Kong slid amid lingering uncertainties over discussions to avoid the delisting of companies from New York stock exchanges. Asian emerging market ex-China equities saw a small net outflow last week after five weeks of inflows.   Japanese equities also rebounded after heavy selling on Monday, as investors digested the Federal Reserve’s continued stance to keep up its hawkish monetary policies and the yen stayed near 140 per dollar.  The Topix rose 1.2% to 1,968.38 as of the market close in Tokyo, while the Nikkei 225 advanced 1.1% to 28,195.58. Keyence Corp. contributed the most to the Topix’s gain, increasing 2.1%. Out of 2,169 stocks in the index, 1,839 rose and 257 fell, while 73 were unchanged. “There may be a slight effect from the weak yen,” said Mamoru Shimode, chief strategist at Resona Asset Management. The S&P/ASX 200 index rose 0.5% to close at 6,998.30, boosted by gains in banks and energy shares. All but one of the 11 sector gauge rallied, while mining shares edged lower as iron ore fell below $100 a ton for the first time in five weeks on signs a crisis in China’s steel industry is worsening.  Uranium shares including Paladin surged after Tesla Chief Executive Elon Musk said countries shouldn’t shut down existing nuclear power plants as Europe grapples with an energy crisis.  In FX, the Bloomberg dollar spot index falls 0.3%, its first drop in three days as the greenback weakened against all of its Group-of-10 peers apart from the Swiss franc. The euro rose above parity against the dollar. European bonds advanced as month-on-month numbers for German state CPIs showed signs of slowing. A euro-area economic confidence gauge fell to 97.6 in August, its lowest level in 1 1/2 years, and down from 99 the previous month. Analysts surveyed by Bloomberg had expected a decline to 98. The pound traded near a 2 1/2-year low versus the US dollar amid speculation the UK is headed for recession with further interest-rate hikes potentially deepening an economic downturn. Aussie eased after a sharp drop in building approvals, only to rebound in European trading. Meanwhile, China’s central bank set a stronger-than-expected yuan fixing for a fifth day, a sign it doesn’t want an excessively weak currency. The move highlights how greenback strength is a challenge for Asia as the region’s currencies slip. In rates, treasuries are near session highs as US trading gets under way Tuesday, holding most of gains that were paced by euro-zone bonds during European morning after release of German regional CPIs, with national gauge due out at 8am New York time.  US yields are lower by 2bp-5bp, 10-year TSY sliding by 5.8bp at 3.05%. Gilts curve bear-flattened with 2-year yield 12bps higher as money markets raise BOE tightening bets. Gilts slumped after yesterday’s English holiday as money markets cranked up BOE tightening bets. The UK 2-year yield briefly rose above 3% for the first time since October 2008. Peripheral spreads are mixed to Germany; Italy and Portugal widen, Spain tightens. Australian sovereign bonds extend an opening gain as iron ore slumped back under $100 for the first time this month. IG credit issuance lull expected to last through US Labor Day holiday Sept. 6. In commodities, WTI drifts 2.8% lower to trade near $94.32. Most base metals are in the red; LME copper falls 2.9%, underperforming peers. LME lead outperforms, adding 0.7%. Spot gold falls roughly $2 to trade near $1,735/oz. China was reported to provide Europe with an energy lifeline through the resale of surplus LNG, according to FT. UK PM candidate Truss is set to approve a series of oil and gas drilling licences in the North Sea in one of her first acts as PM, should she be elected, according to The Times. Canada said it is invoking the 1977 pipeline treaty with the US for the second time over Enbridge's (ENB) Line 5 (540k BPD) dispute. On the US calendar today, we get the August Conference Board consumer confidence, July JOLTS job openings, June FHFA house price index, Q2 house price purchase index; Bank of Montreal and Best Buy are among the companies expected to report results today. Market Snapshot S&P 500 futures up 0.9% to 4,066.25 STOXX Europe 600 up 0.8% to 426.16 MXAP up 0.9% to 158.61 MXAPJ up 0.6% to 518.99 Nikkei up 1.1% to 28,195.58 Topix up 1.2% to 1,968.38 Hang Seng Index down 0.4% to 19,949.03 Shanghai Composite down 0.4% to 3,227.22 Sensex up 2.1% to 59,168.51 Australia S&P/ASX 200 up 0.5% to 6,998.33 Kospi up 1.0% to 2,450.93 Gold spot down 0.0% to $1,736.80 U.S. Dollar Index down 0.36% to 108.45 German 10Y yield little changed at 1.46% Euro up 0.3% to $1.0029 Top Overnight News from Bloomberg Bonds are sliding toward the first bear market in a generation, burning investors who erred in bets that central banks would pivot away from rapid interest-rate hikes. The Bloomberg Global Aggregate Index, which tracks total returns from investment- grade government and corporate bonds, is within a percentage point of falling 20% from its peak after another bout of selling following the Federal Reserve’s Jackson Hole symposium The number of container ships headed for the California ports of Los Angeles and Long Beach -- a traffic jam that once symbolized American consumer vigor during the pandemic -- declined to the lowest level since the bottleneck started to build two years ago European energy prices plunged on signs that the region is stepping up efforts to curb a crisis that threatens to tip the region into recession with winter approaching The European Union is set to meet its gas storage filling goal two months ahead of target as the bloc braces for a tough winter with Russia limiting supplies and energy contracts trading at elevated levels throughout the continent China has rolled out “more forceful” economic policies this year than it did in 2020, Premier Li Keqiang said, as he warned the country faces an arduous task in ensuring its recovery China took the most aggressive step in its latest battle to bolster the yuan, setting its reference rate for the currency with the second strongest bias on record. The People’s Bank of China fixed the yuan at 6.8802 per dollar on Tuesday, 249 pips stronger than the average estimate in a Bloomberg survey. The bias was the second largest on the strong side since the survey of analysts and traders began in 2018 The slide in the yen back toward the key psychological 140 per-dollar level is reigniting chatter on the likelihood officials will intervene to support the Japanese currency A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were somewhat mixed as most of the regional bourses recouped some of the prior day’s losses but with gains capped amid a slew of earnings releases and as participants look towards month-end, as well as the upcoming risk events. ASX 200 was led higher by the energy sector after recent gains in oil prices which printed a fresh monthly high and with strong earnings from Woodside Energy. Nikkei 225 outperformed and reclaimed the psychologically key 28k level. Hang Seng and Shanghai Comp were negative with participants digesting earnings releases and amid further COVID-related disruptions as China's Dalian region limited movements for five days and Shenzhen ordered to close the Huaqiangbei subdistrict which is a global electronics sourcing centre. ICBC (1398 HK) - H2 2022 (CNY): net profit 171.51bln vs. Exp. 186.4bln, NII 351.4bln vs. Exp. 360.5bln. Baidu Inc (BIDU) Q2 2022 (CNY): EPS 15.79 (exp. 10.46), Revenue 29.6bln (exp. 29.31bln). Global funds invested into Evergrande's (3333 HK) bonds have determined their own debt restructuring plan, via FT sources; demands the chair repay liabilities with own funds. Top Asian News Chinese Finance Ministry said it will make good use of local government special bonds and strictly curb new local government hidden debt in H2, while it will strive to stabilise employment and prices. US President Biden's administration plans to ask Congress to approve an estimated USD 1.1bln arms sale to Taiwan, according to Politico. PBoC has issued draft rules to regulate related transactions of financial holding firms. All industrial and business power usage has resumed in Sichuan as of August 30th, according to CCTV. Pakistan to Import Onions, Tomatoes To Meet Shortage After Flood Asia Push for Winter LNG Sends Price to New Five-Month High European bourses are supported in tandem with pressure in European gas prices, Euro Stoxx 50 +1.7%, while the FTSE 100 lags somewhat after its Bank Holiday. Stateside, futures are firmer across the board, ES +0.9%, with the NQ +1.2% outperforming modestly as yields ease. Tesla (TSLA) CEO Musk has filed an SEC filing on Twitter (TWTR); on Aug 29th, sent a letter to Twitter notifying he is terminating merger agreement for additional bases separate from bases set forth in July 8th, according to a letter. Top European News Spain is to propose the EU mimics its gas price system, via El Pais. Germany said to be open to discussing an EU gas price cap at the September 9th summit, via Reuters citing an official. Britons Ditch Staycations for Cheaper All-Inclusive Trips Abroad Spanish Inflation Slows But Any Retreat Is Likely to be Gradual UK July Mortgage Approvals Rise to 63.8k vs. Est. 62k Austria Is Probing Trades Behind Wien Energie Margin Call Revolution Beauty Shares to Be Suspended One Year After Listing FX DXY dips under 108.50 after seeing a mild bid overnight to a high of 108.90. Antipodeans lead the gains whilst EUR feels a boost from receding European gas prices. Haven FX are mixed vs the USD with JPY firmer and the CHF in the red. Fixed Income EGBs are bid as the benchmarks recoup from yesterday’s pressure, fresh fundamentals limited though European gas pricing easing has likely assisted. Gilts remain subdued by over a full point, though off worst, as it catches up to the weekend's hawkish rhetoric. USTs are in-fitting with EZ peers and awaiting commentary from Fed's Williams; yields slightly flatter. Commodities WTI and Brent futures have pared back around half of the prior day's gains; relatively pronounced pressure once more in European gas benchmarks. Spot gold is modestly softer intraday and remains under its 21, 50, and 10 DMAs. LME copper has fallen back under USD 8,000/t as the exchange plays catch-up following the UK bank holiday. China was reported to provide Europe with an energy lifeline through the resale of surplus LNG, according to FT. UK PM candidate Truss is set to approve a series of oil and gas drilling licences in the North Sea in one of her first acts as PM, should she be elected, according to The Times Canada said it is invoking the 1977 pipeline treaty with the US for the second time over Enbridge's (ENB) Line 5 (540k BPD) dispute. Sadrist protesters in Iraq reportedly closed the oil production distribution company in Basra and there were explosions in Baghdad's Green Zone from mortars targeting the former PM's residential area, according to Iraqi Day. US Event Calendar 09:00: June S&P Case Shiller Composite-20 YoY, est. 19.20%, prior 20.50% 09:00: June S&P/Case-Shiller US HPI YoY, prior 19.75% 09:00: 2Q House Price Purchase Index QoQ, prior 4.6% 09:00: June S&P/CS 20 City MoM SA, est. 0.90%, prior 1.32% 09:00: June FHFA House Price Index MoM, est. 0.8%, prior 1.4% 10:00: Aug. Conf. Board Consumer Confidence, est. 98.0, prior 95.7 Present Situation, prior 141.3 Expectations, prior 65.3 10:00: July JOLTs Job Openings, est. 10.4m, prior 10.7m DB's Henry Allen concludes the overnight wrap For those also arriving back after the holiday weekend, markets have been playing a familiar tune for 2022, with risk assets losing ground as central banks underlined their determination to keep bearing down on inflation. Fed Chair Powell kicked off the latest selloff in his speech at Jackson Hole on Friday, where he said that getting back to price stability would “likely require maintaining a restrictive policy stance for some time.” He also went on to reiterate that hawkish message at multiple points, saying that “the employment costs of bringing down inflation are likely to increase with delay”, which favoured “acting with resolve now” to avoid a more costly outcome later. With Powell explicitly warning against repeating the mistakes of the 1970s, investors moved to price in a more hawkish response from the Fed over the next year. In fact over Friday and yesterday, the rate that Fed funds futures are pricing in for the December 2022 meeting went up a further +7.1bps to 3.70%. And with a more hawkish Fed being priced in, that’s having an impact on Treasury yields, with the 2yr yield reaching its highest intraday level since 2007 in trading yesterday, at 3.48%, although it’s since fallen back to 3.41% this morning. US equities have also taken a significant hit, with the S&P 500 seeing its worst daily performance in over two months on Friday, with a -3.37% decline, followed by a more modest -0.67% fall yesterday. Strikingly, Minneapolis Fed President Kashkari said that he was “happy to see how Chair Powell’s Jackson Hole speech was received” in markets, saying it reflected an understanding of their commitment to return inflation to 2%. That theme of investors adapting to more hawkish central banks has been seen on this side of the Atlantic as well, since a number of individuals at the ECB are now openly floating the idea of hiking by 75bps at a single meeting like the Fed. On Friday, Austria’s Holzmann said that a 75bps move “should be part of the debate”, and that a 50bps move was “the minimum for me”. Then in an interview on Sunday, Latvia’s Kazaks said that “at least 50 basis points would be appropriate” in September and said “at the current moment, I would say 50 or 75 basis points”. Those may be two of the most hawkish officials on the Governing Council, but the fact that a 75bps move is being openly discussed ahead of next week’s decision just shows how the direction of travel has shifted, and overnight index swaps are now pricing in a 75bps move as more likely than a 50bps one. Nevertheless, there was some pushback yesterday from Chief Economist Lane, who said that a “steady pace” was important when reaching the terminal rate. In light of these developments, our European economists have updated their ECB call (link here), where they bring forward their timing for the terminal rate to mid-2023 from mid-2024, and now see the terminal deposit rate reaching 2.5% (up from 2% previously). In terms of the specific moves to get there, they now expect 50bp hikes at the remaining 3 meetings this year, bringing the deposit rate up to 1.5% in December, before the ECB slows to a 25bp pace at the 4 meetings in H1 2023 that takes the deposit rate up to 2.5%. They are maintaining their call for a 50bp hike at the September meeting for now, but note there are still some key data and risks around energy that could change the September profile. With markets waking up to the prospect of more aggressive ECB hikes, sovereign bonds sold off significantly yesterday. Yields on 10yr bunds (+11.4bps), OATs (+10.6bps) and BTPs (+10.3bps) all moved sharply higher thanks to rises in real yields, whilst gilts were closed given the public holiday. European equities similarly lost ground as they caught up with the late US selloff from Friday, and the STOXX 600 (-0.81%) posted a decent decline, even as nearly a quarter of the index’s weighting didn’t trade given the London holiday. In the US, tech stocks bore the brunt of the decline given the higher yields, and the FANG+ index followed up its -4.26% loss on Friday with another -1.03% move lower yesterday. Overnight in Asia, equity markets have put in a mixed performance, with the Nikkei (+1.02%) and the Kospi (+0.54%) clawing back some of their heavy losses yesterday, whereas the Hang Seng (-1.32%), the Shanghai Composite (-0.68%) and the CSI 300 (-0.61%) are all trading in negative territory. That underperformance in Chinese equities follows the moves from the People’s Bank of China to push back against yuan weakness, with a fix at 6.8802 per US Dollar this morning, which is noticeably stronger than Bloomberg’s survey estimate of 6.9051. Indeed, it was the strongest fix relative to estimates since August 2019. Elsewhere overnight, there are also signs that the recent market selloff could take a breather today, with futures contracts on the S&P 500 (+0.27%) and NASDAQ 100 (+0.3%) both pointing higher. Looking forward now, this week should illuminate plenty on the near-term policy trajectory as a number of important data releases come out. For the Euro Area, the main one will be tomorrow’s flash CPI reading for August, where our economists see year-on-year CPI ticking down from the record +8.9% in July to +8.8% in August. However, we haven’t reached the peak yet in their opinion, as they see CPI rebounding again in September up to +9.3%, so the ECB would still have a long way to go to get back to their target. On the question of core inflation, they see that moving up to +4.3% in August year-on-year, which would be the highest since the formation of the single currency. So an important release for the ECB just over a week before their decision. The other big release this week will be the US jobs report for August on Friday, which could go a long way to determining whether the Fed move by 50bps or 75bps. Our US economists expect that there’ll be another +300k increase in nonfarm payrolls, which would leave the unemployment rate unchanged at 3.5%. Markets are pricing in +69.1bps worth of hikes for September right now, so much closer to 75 than 50 still. But last month we saw how a strong jobs report jolted market expectations towards 75bps, so a surprise in either direction could well see that shift once again. In the meantime, keep an eye out for the July JOLTS data later today as well, which includes measures on job openings and hires. That’ll offer some further signals on whether labour demand is moving back in line with supply. Otherwise this week, a major theme will be the ongoing turmoil in European energy markets, where yesterday saw prices come down from their record highs of last Friday. For instance, natural gas futures were down -19.63% to €273 per megawatt-hour, whist German power prices for next year fell -22.84% to €760 per megawatt-hour, having traded above €1000 for the first time earlier in the day. European Commission President Von der Leyen said yesterday that the EU was “working on an emergency intervention and a structural reform of the electricity market.” Let’s see what happens there, but one piece of better news from Germany came over the weekend after Economy Minister Habeck said in a Sunday statement that the target to see gas storage 85% full by October should be reached by early September. In the meantime oil prices have got the week off to a strong start, with Brent crude advancing +4.06% yesterday to their highest finish so far this month at $105.09/bbl. They’ve maintained the bulk of those gains overnight too, with Brent crude only down -0.69% at $104.36/bbl. Tyler Durden Tue, 08/30/2022 - 08:09.....»»

Category: blogSource: zerohedgeAug 30th, 2022

Futures Slide Amid Renewed Recession Fears After China Doubles Down On "Covid Zero"

Futures Slide Amid Renewed Recession Fears After China Doubles Down On "Covid Zero" One day after futures ramped overnight (if only to crater during the regular session) on hopes China was easing its highly politicized  Zero Covid policy after it cut the time of quarantine lockdowns, this morning futures slumped early on after China's President Xi Jinping made clear that Covid Zero isn't going anywhere and remains the most “economic and effective” policy for China during a symbolic visit to the virus ground zero in Wuhan, in which he cast the strategy as proof of the superiority of the country’s political system. That coupled with renewed recession worries (market is again pricing in a rate cut in Q1 2023) even as monetary policy tightens in much of the world to fight supply-side inflation, sent US futures and global markets lower. S&P futures dropped 0.2% and Nasdaq 100 futures were down 0.4% after the underlying index slumped on 3.1% on Tuesday. The dollar was steady after rising the most in over a week while WTI crude climbed above $112 a barrel, set for a fourth session of gains. In cryptocurrencies, Bitcoin dipped below the closely watched $20,000 level on news crypto hedge fund 3 Arrows Capital was ordered to liquidate. The Nasdaq's Tuesday’s slump added to what was already one of the worst years in terms of big daily selloffs in US stocks. The S&P 500 Index has fallen 2% or more on 14 occasions, putting 2022 in the top 10 list, according to Bloomberg data. Not helping the tech sector, on Wednesday morning JPMorgan cut its earnings estimates across the sector, especially for companies exposed to online advertising, citing macroeconomic pressures, forex and company-specific dynamics. One of the chief drivers for overnight weakness, China's Xi said during a trip Tuesday to Wuhan where the virus first emerged in late 2019 that relaxing Covid controls would risk too many lives in the world’s most populous country. China would rather endure some temporary impact on economic development than let the virus hurt people’s safety and health, he said, in remarks reported Wednesday by state media. As a result, China’s CSI 300 Index extended loss to 1.4% after the headline, while the yuan drops as much as 0.2% to trade 6.7132 against the dollar in the offshore market. Among key premarket movers, Tesla slipped in US premarket trading. The electric-vehicle maker laid off hundreds of workers on its Autopilot team as it shuttered a California facility, according to people familiar with the matter. Carnival slumped as Morgan Stanley analysts warned that the London and New York-listed cruise vacation company’s shares could lose all their value in the event of another demand shock. Pinterest gained 3.7% as the company’s co- founder and CEO Ben Silbermann quit and handed the reins to Google and PayPal veteran Bill Ready in a sign the social-media company will focus more on e-commerce. Also, despite the pervasive weakness, the Energy Select Sector SPDR Fund ETF (XLE) rebounded off key support (50% Fibonacci) relative to the SPDR S&P 500 ETF (SPY). That said, energy was alone and most other notable movers were down in the premarket: Carnival (CCL US) shares fall 8% premarket as Morgan Stanley analysts warned that the cruise vacation firm’s shares could lose all their value in the event of another demand shock. Nio (NIO US) shares drop 8.2% after short-seller Grizzly Research published a report on Tuesday alleging that the electric carmaker used battery sales to a related party to inflate revenue and boost net income margins. The company rejected the claims. Upstart Holdings (UPST US) shares slump about 9% after Morgan Stanley downgraded the consumer finance company to underweight from equal-weight amid rising cyclical headwinds. Ormat Technologies (ORA US) rallies as much as 5% after the renewable energy company is set to be included in the S&P Midcap 400 Index. 2U (TWOU US) shares rise 16% premarket. Indian online-education provider Byju’s has offered to buy the company in a cash deal that values the US-listed edtech firm at more than $1 billion, a person familiar with the matter said. Watch Amazon (AMZN US) shares as Redburn initiated coverage of the stock with a buy recommendation and set a Street-high price target, saying “there is a clear path toward a $3 trillion value for AWS alone.” Shares in data center REITs could be active later in the trading session after short-seller Jim Chanos said in an FT interview that he’s betting against “legacy” data centers. Watch Digital Realty (DLR US) and Equinix (EQIX US), as well as data center operators Cyxtera Technologies (CYXT US) and Iron Mountain (IRM US) Investors are growing increasingly skeptical that the Fed can avoid a bruising economic downturn amid sharp interest-rate hikes. Evaporating consumer confidence is feeding into concerns that the US might tip into a recession. Naturally, Fed officials sought to play down recession risk. New York Fed President John Williams and San Francisco’s Mary Daly both acknowledged they had to cool inflation, but insisted that a soft landing was still possible. “It seems the market is in this tug of war between on the one hand the hope that we are close to the peak in inflation and rates, and on the other hand the challenge of a slowing economy and potential recession,” Emmanuel Cau, head of European equity strategy at Barclays Bank Plc, said in an interview with Bloomberg TV. “Central banks are walking a very tight line and to a certain extent dictate the mood in the markets.” European equities snapped three days of gains, trading poorly but off worst levels with sentiment also hurt by China remaining committed to its zero-Covid approach. Spanish inflation unexpectedly surged to a record, dashing hopes that inflation in the euro zone’s fourth-biggest economy had peaked, and emboldening European Central Bank policy makers pushing for big increases in interest rates. The ECB should consider raising interest rates by twice the planned amount next month if the inflation outlook deteriorates, according to Governing Council member Gediminas Simkus, as calls not to exclude an outsized initial move grow. German benchmark bonds rose, while 10-year Treasury yields slipped to 3.16%. DAX lags, dropping as much as 1.8%. Real estate, autos and miners are the worst performing sectors. In notable moves in European stocks, Hennes & Mauritz (H&M) gained after the Swedish low-cost retailer’s earnings beat analyst estimates. Just Eat Takeaway.com NV tumbled to a record low after Berenberg analysts rated the stock sell, saying the food delivery firm’s UK business will remain under pressure. Here are some of the biggest European movers today: Just Eat Takeaway shares plunge as much as 21% after Berenberg initiated coverage with a sell rating, saying the firm’s UK business will remain under pressure and a sale of its Grubhub unit is unlikely to satisfy the bulls. Carnival stocks slumped over 12% in London as Morgan Stanley analysts warned that the cruise vacation firm’s shares could lose all their value in the event of another demand shock. Pearson drops as much as 6.1% after the education company was cut to sell at UBS, which reduced forecasts to reflect a weak outlook for 2022 college enrollments. Grifols shares plunge as much as 13% on a media report the Spanish plasma firm is weighing a capital raise of as much as EU2b to cut its debt. Diageo shares fall after downgrades for the spirits group from Deutsche Bank and Kepler Cheuvreux, while Pernod Ricard also dips on a rating cut from the latter. Diageo declines as much as 4.2%, Pernod Ricard -3.7% Fluidra shares fall as much as 8.4% after Santander cut its rating on the Spanish swimming pools company. The bank’s analyst Alejandro Conde cut the recommendation to neutral from outperform. H&M shares rise as much as 6.8% after the Swedish apparel retailer reported 2Q earnings that beat estimates. Jefferies said the margin beat in particular was reassuring, while Morgan Stanley said it was a “positive surprise” overall. Ipsen shares rise as much as 3.1% after UBS analyst Michael Leuchten said that accepting palovarotene refiling priority review should be a net present value and confidence boost. Asian stocks fell, halting a four-day gain, as renewed angst over the outlook for global economic growth and inflation help drive a selloff across most of the region’s equity markets. The MSCI Asia Pacific Index dropped as much as 1.5%, led by consumer discretionary and information sectors. Chinese equities in particular took a hit, as the CSI 300 Index fell 1.5% Wednesday after Xi Jinping reiterated his firm stance on Covid zero. Tech-heavy indexes in markets such as South Korea and Taiwan took the brunt of Wednesday’s drop amid lingering concerns that monetary tightening in much of the world to fight inflation will cause an economic slowdown. While Federal Reserve members have played down the risk of a US recession, gloomy data such as US consumer confidence have damped investor sentiment. “Volatility is going to be the enduring feature of the market, I suspect, for the next couple of quarters at least until we get a firm sense that peak inflation has passed,” John Woods, Credit Suisse Group AG’s Asia-Pacific chief investment officer, said in an interview with Bloomberg TV. “Markets, I think, have aggressively priced in quite a serious or steep recession.”  China’s four-day winning streak came to a halt, putting its advance toward a bull market on hold.  “We will continue to see a risk of targeted lockdowns, and that spoils the initial euphoria seen in the markets from the announcement on relaxation of quarantine requirements,” said Charu Chanana, market strategist at Saxo Capital Markets. “Still, economic growth will likely be prioritized as this is a politically important year for China.”  Japanese equities decline as investors digested data that showed a drop in US consumer confidence over inflation worries and increased concerns of an economic downturn.  The Topix Index fell 0.7% to 1,893.57 in Tokyo on Wednesday, while the Nikkei declined 0.9% to 26,804.60. Toyota Motor Corp. contributed the most to the Topix’s decline, decreasing 1.8%. Out of 2,170 shares in the index, 1,114 fell, 984 rose and 72 were unchanged. “There are concerns about stagflation,” said Hideyuki Suzuki a general manager at SBI Securities. “The consumer sentiment from the University of Michigan, which provides one of the fastest data points, has already shown poor figures.” Stocks in India tracked their Asian peers lower as brent rose to the highest level in two weeks, while high inflation and slowing global growth continued to dampen risk-appetite for global equities. The S&P BSE Sensex fell 0.3% to 53,026.97 in Mumbai, while the NSE Nifty 50 Index declined by an equal measure. Both gauges have lost more than 4% in June and are set for their third consecutive month of declines. The main indexes have dropped for all but one month this year. Twelve of the 19 sub-sector gauges compiled by BSE Ltd. eased, led by banking companies while power producers were the top performers.   Investors will also be watching the expiry of monthly derivative contracts on Thursday, which may lead to some volatility in the markets.  Hindustan Unilever was the biggest contributor to the Sensex’s decline, decreasing 3.5%. Out of 30 shares in the Sensex, 10 rose and 20 fell. The Bloomberg Dollar Spot Index inched up modestly as the greenback traded mixed against its Group-of-10 peers; the Swiss franc led gains while Antipodean currencies were the worst performers and the euro traded in a narrow range around $1.05. The relative cost to own optionality in the euro heading into the July meetings of the ECB and the Federal Reserve was too low for investors to ignore and has become less and less underpriced. The yen strengthened and US and Japanese bond yields fell. In rates, fixed income has a choppy start. Bund futures initially surged just shy of 200 ticks on a soft regional German CPI print before fading the entire move over the course of the morning as Spanish data hit the tape, delivering a surprise record 10% reading for June and more hawkish ECB comments crossed the wires. Treasuries and gilts followed with curves eventually fading a bull-steepening move. Long-end gilts underperform, cheapening ~4bps near 2.75%. Peripheral spreads are tighter to core.  Treasuries are slightly higher as US trading day begins, off the session lows reached as bund futures jumped after the first monthly drop since November in a German regional CPI gauge. Yields are lower across the curve, by 1bp-2bp for tenors out to the 10-year with long-end yields little changed; 10-year declined as much as 5.3bp vs as much as 8.2bp for German 10- year, which remains lower by ~3bp. Focal points for the US session include a final revision of 1Q GDP, comments by Fed Chair Powell, and anticipation of quarter-end flows favoring bonds. Quarter-end is anticipated to cause rebalancing flows into bonds; Wells Fargo estimated that $5b will be added to bonds, with most of the flows occurring Wednesday and Thursday. In commodities, crude futures advance. WTI drifts 0.3% higher to trade near $112.13. Base metals are mixed; LME tin falls 5.6% while LME zinc gains 0.4%. Spot gold falls roughly $5 to trade near $1,815/oz Looking ahead, the highlight will be the panel at the ECB Forum that includes Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey. We’ll also be hearing from ECB Vice President de Guindos, the ECB’s Schnabel, the Fed’s Mester and Bullard, and the BoE’s Dhingra. On the data side, releases include German CPI for June, Euro Area money supply for May, and the final Euro Area consumer confidence reading for June. From the US, we’ll also get the third reading of Q1 GDP. Market Snapshot S&P 500 futures little changed at 3,829.00 STOXX Europe 600 down 0.8% to 412.69 MXAP down 1.3% to 159.96 MXAPJ down 1.6% to 531.04 Nikkei down 0.9% to 26,804.60 Topix down 0.7% to 1,893.57 Hang Seng Index down 1.9% to 21,996.89 Shanghai Composite down 1.4% to 3,361.52 Sensex little changed at 53,204.17 Australia S&P/ASX 200 down 0.9% to 6,700.23 Kospi down 1.8% to 2,377.99 German 10Y yield little changed at 1.59% Euro little changed at $1.0510 Brent Futures down 0.4% to $117.46/bbl Gold spot down 0.2% to $1,816.09 U.S. Dollar Index little changed at 104.55 Top Overnight News from Bloomberg The Fed’s Loretta Mester said she wants to see the benchmark lending rate reach 3% to 3.5% this year and “a little bit above 4% next year” to rein in price pressures even if that tips the economy into a recession The ECB should consider raising interest rates by twice the planned amount next month if the inflation outlook deteriorates, according to Governing Council member Gediminas Simkus, as calls not to exclude an outsized initial move grow ECB has “ample room” to hike in 25bps-50bps steps to “whatever rate we think, we consider reasonable,” Governing Council member Robert Holzmann said in interview with CNBC Swedish consumers are gloomier than they have been since the mid-1990s, as prices surge on everything from fuel to food and furniture China’s President Xi Jinping declared Covid Zero the most “economic and effective” policy for the nation, during a symbolic visit to Wuhan in which he cast the strategy as proof of the superiority of the country’s political system NATO moved one step closer to bolstering its eastern front with Russia after Turkey dropped its opposition to Swedish and Finnish bids to join the military alliance A more detailed look at markets courtesy of Newsquawk Asia-Pac stocks were pressured amid headwinds from the US where disappointing Consumer Confidence data added to the growth concerns. ASX 200 failed to benefit from better than expected Retail Sales and was dragged lower by weakness in miners and tech. Nikkei 225 fell beneath the 27,000 level as industries remained pressured by the ongoing power crunch. Hang Seng and Shanghai Comp. conformed to the negative picture in the region although losses in the mainland were initially stemmed after China cut its quarantine requirements which the National Health Commission caveated was not a relaxation but an optimization to make it more scientific and precise. Top Asian News Chinese President Xi said China's COVID prevention control and strategy is correct and effective and must stick with it, via state media. Shanghai will gradually reopen museums and scenic sports from July 1st, state media reports. US Deputy Commerce Secretary Graves said the US will take a balanced approach on Chinese tariffs and that a clear response on China tariffs is coming soon, according to Bloomberg. China State Council's Taiwan Affairs Office said it firmly opposes the US signing any agreement that has sovereign connotations with Taiwan, according to Global Times. BoJ Governor Kuroda said Japanese Core CPI reached 2.1% in April and May which is almost fully due to international energy prices and Japan's economy has not been affected much by the global inflationary trend so monetary policy will stay accommodative, according to Reuters. Japanese govt to issue power supply shortage warning for a fourth consecutive day on Thursday, according to a statement. European bourses are on the backfoot as the region plays catch-up to the losses on Wall Street yesterday. Sectors are mostly lower (ex-Energy) with a defensive tilt as Healthcare, Consumer Products, Food & Beverages, and Utilities are more cushioned than their cyclical peers. Stateside, US equity futures trade on either side of the unchanged mark with no stand-out performers thus far, with the contracts awaiting the next catalyst. Top European News UK expects defence spending to reach 2.3% of GDP and said PM Johnson will announce new military commitments to NATO, according to Reuters. UK Weighs Capping Maximum Stake in Online Casinos at £5 Europe Is the Only Region Where Earnings Estimates Are Rising European Gas Prices Rise as Supply Risks Add to Storage Concerns Gold Steady as Traders Weigh Fed Comments on US Recession Risks Choppy Start for Euro-Area Bonds on Mixed Inflation FX Dollar mostly bid otherwise as rebalancing demand underpins - DXY pivots 104.500 within 104.700-350 confines. Franc outperforms on rate and risk considerations - Usd/Chf breaches 0.9550 and Eur/Chf approaches parity. Euro erratic in line with conflicting inflation data - Eur/Usd rotates around 1.0500. Aussie and Kiwi undermined by downturn in sentiment - Aud/Usd loses 0.6900+ status, Nzd/Usd wanes from just over 0.6250. Yen rangy following firmer than forecast Japanese retail sales and BoJ Governor Kuroda reaffirming intent to remain accommodative - Usd/Jpy straddles 136.00. Nokkie welcomes oil worker wage agreement with unions to avert strike action, but Sekkie hampered by softer Swedish macro releases pre-Riksbank policy call tomorrow - Eur/Nok probes 10.3000, Eur/Sek hovers around 10.6800. Rand rattled by decline in Gold and ongoing SA power supply problems, but Rouble rallies irrespective of CBR and Russian Economy Ministry divergence over deflation. Central Banks ECB's Lane said there are two-way inflation risks: "on the one side, there could be forces that keep inflation higher than expected for longer. On the other side, we do have the risk of a slowdown in the economy, which would reduce inflationary pressure", via ECB. ECB's Holzmann said "We will have to make an assessment where the economic development is going and where inflation stands and afterwards there’s ample room to hike in 0.25 and 0.5 levels to whatever rate we think, we consider reasonable" via CNBC. ECB's Simkus said if data worsens, then he wants a 50bps July hike as an option, 50bps hike is very likely in September; ECB's fragmentation tool should serve as a deterrent, via Bloomberg. ECB's Herodotou said EZ inflation will peak this year, via CNBC. ECB's Wunsch said government aid may spell more rate hikes, via Bloomberg; 150bps of hikes by March 2023 is reasonable ECB is said to be weighting whether or not they should announce the size and duration of their upcoming bond-buying scheme, according to Reuters sources. Fed's Mester (2022, 2024 voter) said on a path towards restrictive interest rates; July debate between 50bps and 75bps hike, via CNBC. Mester said if inflation expectations become unanchored, monetary policy would have to act more forcefully; current inflation situation is a very challenging one, via Reuters. SARB Governor said a 50bps hike is "not off the table", Via Bloomberg CBR Governor said she does not see risks of deflation; sees room to cut rates; sticking to policy of floating RUB exchange rate. PBoC will step up implementation of prudent monetary policy, will keep liquidity reasonably ample. Fixed Income Bunds unwind all and a bit more of their hefty post-NRW CPI gains as other German states show smaller inflation slowdowns and Spanish HICP soars. Gilts suffer more pronounced fall from grace in relative terms and US Treasuries slip from overnight peaks in sympathy. UK debt and STIRs also await testimony from MPC member elect to see if newbie leans dovish, hawkish or middle of the road 10 year benchmarks settle off worst levels within 147.37-145.14, 112.66-11.85 and 117-12+/116-27 respective ranges awaiting comments from ECB, Fed and BoE heads at Sintra Forum. Commodities WTI and Brent front-month futures traded with no firm direction in early European hours before picking up modestly in recent trade. US Private Inventory (bbls): Crude -3.8mln (exp. -0.6mln), Cushing -0.7mln, Distillate +2.6mln (exp. -0.2mln) and Gasoline +2.9mln (exp. -0.1mln). Norway's Industri Energi and SAFE labour unions agreed a wage deal for oil drilling workers and will not go on strike, according to Reuters. OPEC to start today at 12:00BST/07:00EDT; JMMC on Thursday at 12:00BST/07:00EDT followed by OPEC+ at 12:30BST/07:30EDT, via EnergyIntel. Libya's NOC suspends oil exports from Es Sider port. Spot gold is under some mild pressure as the Buck and Bond yields picked up, with the yellow metal back to near-two-week lows Base metals are mixed but off best levels after President Xi reaffirmed China's COVID stance – LME copper fell back under USD 8,500/t US Event Calendar 07:00: June MBA Mortgage Applications, prior 4.2% 08:30: 1Q PCE Core QoQ, est. 5.1%, prior 5.1% 08:30: 1Q GDP Price Index, est. 8.1%, prior 8.1% 08:30: 1Q Personal Consumption, est. 3.1%, prior 3.1% 08:30: 1Q GDP Annualized QoQ, est. -1.5%, prior -1.5% Central Banks 09:00: Powell Takes Part in Panel Discussion at ECB Forum in Sintra 09:00: Lagarde, Powell, Bailey, Carstens Speak in Sintra 11:30: Fed’s Mester Speaks on Panel at ECB Forum in Sintra 13:05: Fed’s Bullard Makes Introductory Remarks DB's Jim Reid concludes the overnight wrap I'm finishing this off in a taxi on the way to the Eurostar this morning and I made the mistake of telling the driver I was slightly pressed for time. He seems to be taking the racing line everywhere and my motion sickness is kicking in. A little like this car journey, it's been another volatile 24 hours in markets, with a succession of weak data releases raising further questions about how close the US and Europe might be to a recession. That saw equities give up their initial gains to post a decent decline on the day, whilst there was little respite from central bankers either, with sovereign bonds selling off further as multiple speakers doubled down on their hawkish rhetoric. That comes ahead of another eventful day ahead on the calendar, with investors primarily focused on a panel featuring Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey, as well as the flash German CPI print for June, who are the first G7 economy to release their inflation print for the month, which will provide some further clues on how fast central banks will need to move on rate hikes. Just as we go to print the NRW region of Germany has seen CPI print at 7.5% YoY, way below last month's 8.1%. This region is around a quarter of GDP so it could imply the national numbers will be notably softer when we get them later. The energy tax cuts were always going to come through in June so some respite was always possible but at first glance this seems materially below what might have been expected. This comes after a significant sovereign bond selloff in Europe once again yesterday as President Lagarde reiterated the central bank’s determination to bring down inflation, and described inflation pressures that were “broadening and intensifying”. And although Lagarde stuck to the existing script about the ECB raising rates by 25bps at the next meeting, we also heard from Latvia’s Kazaks who said that “front-loading the increase would be a reasonable choice” in the event that the situation with inflation or inflation expectations deteriorates. Lagarde did nod to this in part, saying that if the ECB was “to see higher inflation threatening to de-anchor inflation expectations, or signs of a more permanent loss of economic potential that limits resources availability, we would need to withdraw accommodation more promptly to stamp out the risk of a self-fulfilling spiral.” Separately on fragmentation, Lagarde said that they could “use flexibility in reinvesting redemptions” from PEPP starting July 1 in order to deal with the issue. For now, overnight index swaps are only pricing in a +31.3bps move in July from the ECB, so still closer to 25 than 50 for the time being. Meanwhile the rate priced in by year-end rose also by +7.9bps as investors interpreted the comments in a hawkish light. That supported a further rise in yields, with those on 10yr bunds up another +8.1bps yesterday, following on from their +10.7bps move in the previous session. That’s now almost reversed the -21.9ps move over the previous week, which itself was the third-largest weekly decline in bund yields for a decade, and brought the 10yr yield back up to 1.63%, so not far off its multi-year high of 1.77% seen last week. A similar pattern was seen elsewhere, with 10yr yields on 10yr OATs (+9.6bps), BTPs (+4.2bps) and gilts (+7.2bps) all moving higher too. Things turned near the European close with some poor US data releases piling on to some lacklustre confidence figures in Europe. Earlier in the day the GfK consumer confidence reading from Germany fell to -27.4 (vs. -27.3 expected), taking it to another record low. Separately in France, consumer confidence fell to 82 on the INSEE’s measure (vs. 84 expected), which we haven’t seen since 2013. Then in the US, the Conference Board’s measure fell to 98.7 (vs. 100.0 expected), which is the lowest since February 2021. The Conference Board’s one-year ahead inflation expectations hit a record high of 8.0%, surpassing the June 2008 record of 7.7%, adding to the pessimism. Along with waning confidence, the Richmond Fed’s Manufacturing Index registered a -19, its lowest since the peak onset of the pandemic, versus expectations of -7 and a prior of -9, showing that production data has weakened as well. This put a serious damper on risk sentiment which drove Treasury yields and equities lower intraday during the New York session. 10yr Treasury yields ended down -2.8bps after trading as much as +5.5bps higher during the European session. They are down another -4bps this morning. Concerningly as well, there was a fresh flattening in the Fed’s preferred yield curve indicator (which is 18m3m – 3m), which came down another -9.1bps to 165bps, which is the flattest its been since early March. With that succession of bad news helping to dampen risk appetite, US equities gave up their opening gains to leave the S&P 500 down -2.01% on the day. Tech stocks saw the worst losses, with the NASDAQ (-2.98%) and the FANG+ (-3.74%) seeing even larger declines. And whilst there was a stronger performance in Europe, the STOXX 600 ended the day up just +0.27%, having been as high as +0.95% in the couple of hours before the close. We didn’t hear so much from the Fed ahead of Chair Powell’s appearance today, although New York Fed President Williams said that at the upcoming July meeting “I think 50 to 75 is clearly going to be the debate”. Markets are continuing to price something in between the two, although since the last Fed meeting futures have been consistently closer to 75 than 50, with 69.0 bps right now. Those sharp losses in US equities are echoing across Asia this morning. The Hang Seng (-1.86%) is leading the losses followed by the Kospi (-1.82%), the Nikkei (-1.07%) and the ASX 200 (-1.06%). Over in mainland China, the Shanghai Composite (-0.77%) and the CSI (-0.80%) are slightly out-performing after yesterday’s surprise move by China to slash the quarantine period for inbound travellers (more on this below). Looking ahead, US stock index futures point to a positive opening with contracts on the S&P 500 (+0.18%) and NASDAQ 100 (+0.19%) mildly higher. Earlier today, data released showed that Japan’s retail sales advanced for the third consecutive month in May (+3.6% y/y) but lower than the consensus of +4.0%, but with the previous month's data revised up to +3.1% (vs +2.9% preliminary). Meanwhile, South Korea’s consumer sentiment index (CSI) fell sharply to 96.4 in June (vs 102.6 in May), sliding below the long-term average of 100 for the first time since Feb 2021. Separately, Australia’s retail sales put in another strong performance as it climbed +0.9% m/m in May, surpassing analyst estimates of a +0.4% increase. Oil has fallen back slightly overnight after three sessions of gains with Brent futures down -0.84% at $116.99 and WTI futures (-0.64%) at $111.04/bbl as I type. Just after we went to press yesterday, it was also announced that China would be shortening the required quarantine period for inbound travellers to one week from two. So although China is still very-much committed to a Covid-zero strategy for the time being, this step towards loosening rather than tightening restrictions is an interesting development that helped support Chinese equities in yesterday’s session towards the close which filtered through into early northern hemisphere risk performance. In terms of other data yesterday, there were signs that US house price growth might finally be slowing somewhat, with the S&P CoreLogic Case-Shiller index up by +20.4% in April, which is down slightly from the +20.6% gain in March. So still a long way from an absolute decline, but that marks a reversal in the trend after the previous 4 months of rises in the year-on-year measure. To the day ahead now, and the highlight will likely be the panel at the ECB Forum that includes Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey. We’ll also be hearing from ECB Vice President de Guindos, the ECB’s Schnabel, the Fed’s Mester and Bullard, and the BoE’s Dhingra. On the data side, releases include German CPI for June, Euro Area money supply for May, and the final Euro Area consumer confidence reading for June. From the US, we’ll also get the third reading of Q1 GDP. Tyler Durden Wed, 06/29/2022 - 08:00.....»»

Category: smallbizSource: nytJun 29th, 2022

Sprouts Farmers (SFM) Boosts Customer Experience Via EBT SNAP

Sprouts Farmers (SFM) announces that it has started accepting Electronic Benefits Transfer Supplemental Nutrition and Assistance Program for same-day delivery and curbside pickup for orders. Sprouts Farmers Market, Inc. SFM is undertaking several initiatives focused on product innovation, customer experience and technology. In a latest move, SFM has announced that it has started accepting Electronic Benefits Transfer Supplemental Nutrition and Assistance Program (EBT SNAP) for same-day delivery and curbside pickup for orders through the Instacart website and mobile app. This facility is available at nearly 380 stores across the country.EBT SNAP acceptance on Instacart is powered by Carrot Payments, which is part of the Instacart Platform. To avail same-day grocery delivery or pickup online, consumers have to create a profile via Instacart’s website or mobile app, and can then enter their EBT food card information as part of the payment in their profile. They will also need a secondary form of payment for non-food items like taxes, tips and fees per the federal SNAP guidelines.EBT SNAP will be available on www.sprouts.com later in 2022. Sprouts Farmers, in collaboration with Instacart, will serve the mission of providing fresh food to the guests. Via this latest launch, customers can avail fresh, natural and organic food online conveniently. SFM is steadily expanding its presence in the organic space, given the huge demand in this segment. The company has been providing hassle-free shopping through Sprouts.com website and its mobile app.What Else?Sprouts Farmers has been undertaking initiatives to boost customer experience. SFM has rolled out grocery pickup service at all of its stores. The home delivery business is also available at its stores. The company is trying all means to provide ready-to-eat, ready-to-heat, and ready-to-cook items to customers. Apart from these, the company is trying to expand private-label offerings in departments under the Sprouts Market Corner Deli, The Butcher Shop at Sprouts and Sprouts Fish Market brands. Product innovation continues to drive sales in private label items.Additionally, Sprouts Farmers is focused on creating a robust omni-channel experience for customers. During first-quarter 2022, e-commerce accounted for 11.5% of total sales. Management remains excited about the opening of the company’s fresh distribution center in Aurora, CO. Through this, the company is currently supplying all stores in the Colorado, Utah and New Mexico region. This, coupled with the Florida distribution center, is helping SFM build a faster supply chain and effectively cater to consumers. It is also on track to develop a new format store, which has a smaller footprint with higher selling space per square foot, and costs 20% less to build.Management continues with its investment to improve operational efficiencies. In this regard, we note that the fresh item management technology has been successful. The company has been implementing the system in all of its departments to lower operational complexity, optimize production, improve in-stock position, lower down shrink and drive incremental sales.Over the past three months, shares of this Zacks Rank #3 (Hold) company have gained 9% against the industry’s 4.2% decline.Solid Picks in RetailSome stocks in the broader Retail sector that investors can consider are Boot Barn Holdings BOOT, Capri Holdings CPRI and Fastenal FAST.Boot Barn Holdings, a lifestyle retailer of western and work-related footwear, apparel and accessories, presently has a Zacks Rank of 1 (Strong Buy). BOOT has an expected EPS growth rate of 20% for three-five years. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Boot Barn Holdings’ current financial-year sales and EPS suggests growth of 17% and 4.4%, respectively, from the year-ago corresponding figures. BOOT has a trailing four-quarter earnings surprise of 25.2%, on average.Capri Holdings, which offers accessories and footwear, carries a Zacks Rank #2 (Buy) at present. CPRI has an expected EPS growth rate of 11.3% for three-five years.The Zacks Consensus Estimate for Capri Holdings’ current financial-year sales and EPS suggests growth of 5.3% and 10%, respectively, from the year-ago corresponding figures. CPRI has a trailing four-quarter earnings surprise of 49.3%, on average.Fastenal, a national wholesale distributor of industrial and construction supplies, currently has a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 5%, on average.The Zacks Consensus Estimate for Fastenal's current financial-year sales and earnings per share suggests growth of 15.4% and 16.3%, respectively, from the year-ago period. FAST has an expected EPS growth rate of 9% for three-five years. Free: Top Stocks for the $30 Trillion Metaverse Boom The metaverse is a quantum leap for the internet as we currently know it - and it will make some investors rich. Just like the internet, the metaverse is expected to transform how we live, work and play. Zacks has put together a new special report to help readers like you target big profits. The Metaverse - What is it? And How to Profit with These 5 Pioneering Stocks reveals specific stocks set to skyrocket as this emerging technology develops and expands.Download Zacks’ Metaverse Report now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fastenal Company (FAST): Free Stock Analysis Report Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report Capri Holdings Limited (CPRI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 17th, 2022

Kroger Reports First Quarter 2022 Results and Raises Full-Year Guidance

First Quarter Highlights Identical Sales without fuel increased 4.1% Operating Profit of $1,505 million; Adjusted FIFO Operating Profit of $1,601 million EPS of $0.90; Adjusted EPS of $1.45 Company is widening its competitive moats to deliver value for customers Fresh Department identical sales increased 5.2% Our Brands identical sales increased 6.3% Digitally engaged households grew by more than half a million and digital coupon downloads increased 11% CINCINNATI, June 16, 2022 /PRNewswire/ -- The Kroger Co. (NYSE:KR) today reported its first quarter 2022 results and will update investors on how Leading with Fresh and Accelerating with Digital initiatives continue to position Kroger for long-term sustainable growth. Comments from Chairman and CEO Rodney McMullen "Kroger achieved strong first quarter results as we successfully executed on our strategy of Leading with Fresh and Accelerating with Digital. We are incredibly proud of our associates who continue to put the customer at the center of everything we do. Our team is doing an outstanding job managing costs in an inflationary environment, which is allowing us to continue to invest in our associates while providing our customers the freshest food at affordable prices when and where they need it. We are delivering everyday value through personalized experiences, trusted Our Brands products, data-driven promotions, and seamless e-commerce solutions. Looking ahead, we are well positioned to continue delivering for our customers, investing in our associates, and driving sustainable returns for shareholders."  First Quarter Financial Results 1Q22 ($ in millions; except EPS) 1Q21 ($ in millions; except EPS) ID Sales* (Table 4) 4.1 % (4.1 %) EPS $0.90 $0.18 Adjusted EPS (Table 6) $1.45 $1.19 Operating Profit $1,505 $805 Adjusted FIFO Operating Profit (Table 7) $1,601 $1,375 FIFO Gross Margin Rate* Decreased 26 basis points OG&A Rate* Decreased 46 basis points *without fuel and adjustment items, if applicable Total company sales were $44.6 billion in the first quarter, compared to $41.3 billion for the same period last year. Excluding fuel, sales increased 3.8% compared to the same period last year. Gross margin was 21.6% of sales for the first quarter. The FIFO gross margin rate, excluding fuel, decreased 26 basis points compared to the same period last year. This decrease was primarily attributable to continued strategic price investments and higher supply chain costs offset by sourcing benefits and the cycling of a write-down related to a donation of personal protective equipment inventory from prior year. The LIFO charge for the quarter was $93 million, compared to a LIFO charge of $37 million for the same period last year driven by higher inflation. The Operating, General & Administrative rate decreased 46 basis points, excluding fuel and adjustment items, which reflects sales leverage, continued execution of cost savings initiatives, and lower contributions to multi-employer pension plans offset by investments in associates. The income tax rate for the first quarter was 18.0%, compared to 20.2% for the same period last year. This decrease was primarily attributable to higher tax deductions related to employee stock option exercises. Capital Allocation Strategy Kroger continues to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth, maintaining its current investment grade debt rating, and returning excess free cash flow to shareholders via share repurchases and a growing dividend over time. Kroger's net total debt to adjusted EBITDA ratio is 1.68, compared to 1.79 a year ago (Table 5). The company's net total debt to adjusted EBITDA ratio target range is 2.30 to 2.50. During the quarter, Kroger repurchased $665 million shares and as of the end of the first quarter, $301 million remains on the board authorization announced on December 30, 2021. 2022 Guidance Comments from CFO Gary Millerchip "Our relentless focus on executing our strategy and sustained food at home trends led to a strong first quarter. The Kroger team is effectively navigating a dynamic retail environment. Our diverse and resilient business model gives us confidence to raise our full-year guidance. We now expect identical sales without fuel to be in the range of 2.5% to 3.5%, adjusted FIFO operating profit of $4.3 billion to $4.4 billion, and adjusted net earnings per diluted share to be in the range of $3.85 to $3.95. We remain confident in our ability to deliver sustainable earnings growth and total shareholder returns of 8-11% over time."  Full-Year 2022 Guidance - Updated IDs (%) EPS ($) Operating Profit ($B) Tax Rate**  Cap Ex ($B) Free Cash Flow ($B)*** Adjusted* 2.5% - 3.5% $3.85 - $3.95 $4.3 - $4.4 22 % $3.8 - $4.0 $2.0 - $2.2 * Without adjusted items, if applicable; Identical sales is without fuel; Operating profit representsFIFO Operating Profit. Kroger is unable to provide a full reconciliation of the GAAP and non-GAAPmeasures used in 2022 guidance without unreasonable effort because it is not possible to predictcertain of our adjustment items with a reasonable degree of certainty. This information is dependentupon future events and may be outside of our control and its unavailability could have a significantimpact on 2022 GAAP financial results. ** This rate reflects typical tax adjustments and does not reflect changes to the rate from the completion of income tax audit examinations or changes in tax laws, which cannot be predicted. *** 2022 free cash flow guidance includes a $300M payment of deferred payroll taxes. This excludesplanned payments related to the restructuring of multi-employer pension plans. First Quarter 2022 Highlights Leading with Fresh   Achieved the two highest single-day floral sales in Kroger history, led by Valentine's Day and Mother's Day and solidified the company's place as the nation's largest floral retailer Accelerated End-to-End Fresh Produce initiative with 355 new stores certified, driving higher fresh sales during the quarter Launched 239 new, seasonal Our Brands items, including fresh products to elevate summer cooking Unveiled a study completed with the University of Cincinnati and Kroger Health to understand how Kroger's Food as Medicine platform and dietitians can support customers' goals to incorporate more fresh foods and live healthier lives by leveraging technology, health education, and the OptUP shopping tool Accelerating with Digital Opened two new Kroger Delivery facilities, powered by Ocado, in Dallas, Texas and Pleasant Prairie, Wisconsin allowing Kroger to serve fresh and affordable products directly to more households Expanded the Kroger Delivery network by opening three new spoke facilities, which serve as last-mile cross-dock locations, including Columbus and Louisville in existing geographies, as well as Miami, a new geography Introduced national e-commerce experience that expands Kroger's Home and Baby offerings by selling several thousand new products on Kroger's Ship Marketplace in collaboration with Bed Bath & Beyond Inc. Associate Experience Held nationwide hybrid hiring event with opportunities in retail, e-commerce, manufacturing, supply chain, merchandising, logistics, corporate, pharmacy, and healthcare roles Launched Microsoft Teams Rooms in supermarket locations to improve collaboration and training capabilities for associates Celebrated 45 associates who were recognized by Progressive Grocer to represent the Top Women in Grocery across three categories including, Senior-Level Executives, Rising Stars and Store Leaders Continued Kroger's commitment to associate well-being by providing new training to more than 1,500 leaders to develop the skills needed to identify signs and symptoms of mental health problems, demonstrate support for associates experiencing a crisis, and guidance for self-care Live Our Purpose Directed $210 million of $350 million in annual charitable giving to end hunger in our communities and gave a record one-year total of 546 million meals to people across the country while achieving 79% waste diversion from landfills company-wide Reduced barriers to COVID-19 treatment options nationwide by supporting the "Test to Treat" initiative at The Little Clinic locations for patients exhibiting symptoms of COVID-19 Announced new partnership with USO to bring mobile food programming to serve local military communities Ranked 25th on the 2022 Axios Harris Poll 100, an annual ranking of the reputations of the most visible U.S. companies About KrogerAt The Kroger Co. (NYSE:KR), we are dedicated to our Purpose: to Feed the Human Spirit™. We are, across our family of companies nearly half a million associates who serve over eleven million customers daily through a seamless digital shopping experience and 2,723 retail food stores under a variety of banner names, serving America through food inspiration and uplift, and creating #ZeroHungerZeroWaste communities by 2025. To learn more about us, visit our newsroom and investor relations site. Kroger's first quarter 2022 ended on May 21, 2022. Note: Fuel sales have historically had a low gross margin rate and operating expense rate as compared to corresponding rates on non-fuel sales. As a result, Kroger discusses the changes in these rates excluding the effect of fuel. Please refer to the supplemental information presented in the tables for reconciliations of the non-GAAP financial measures used in this press release to the most comparable GAAP financial measure and related disclosure. This press release contains certain statements that constitute "forward-looking statements" about the future performance of the company. These statements are based on management's assumptions and beliefs in light of the information currently available to it. Such statements are indicated by words or phrases such as "achieve," "committed," "confident," "continue," "deliver," "driving," "expect," "future," "guidance," "strategy," "target," "trends," and "well-positioned." Various uncertainties and other factors could cause actual results to differ materially from those contained in the forward-looking statements. These include the specific risk factors identified in "Risk Factors" in our annual report on Form 10-K for our last fiscal year and any subsequent filings, as well as the following: Kroger's ability to achieve sales, earnings, incremental FIFO operating profit, and adjusted free cash flow goals may be affected by: COVID-19 pandemic related factors, risks and challenges, including among others, the length of time that the pandemic continues, future variants, mutations or related strains of the virus and the effectiveness of vaccines against variants, continued efficacy of vaccines over time and availability of vaccine boosters, the extent of vaccine refusal, and global access to vaccines, as well as the effect of  vaccine and/or testing mandates and related regulations, the potential for additional future spikes in infection and illness rates including breakthrough infections among the fully vaccinated, and the corresponding potential for disruptions in workforce availability and customer shopping patterns, re-imposed restrictions as a result of resurgence and the corresponding future easing of restrictions, and interruptions in domestic and global supply chains or capacity constraints; whether and when the global pandemic will become endemic, the pace of recovery when the pandemic subsides or becomes endemic, which may vary materially over time and among the different regions we serve; labor negotiations; potential work stoppages; changes in the unemployment rate; pressures in the labor market; changes in government-funded benefit programs; changes in the types and numbers of businesses that compete with Kroger; pricing and promotional activities of existing and new competitors, including non-traditional competitors, and the aggressiveness of that competition; Kroger's response to these actions; the state of the economy, including interest rates, the current inflationary environment and future potential inflationary and/or deflationary trends and such trends in certain commodities, products and/or operating costs; the geopolitical environment including the war in Ukraine; unstable political situations and social unrest; changes in tariffs; the effect that fuel costs have on consumer spending; volatility of fuel margins; manufacturing commodity costs; diesel fuel costs related to Kroger's logistics operations; trends in consumer spending; the extent to which Kroger's customers exercise caution in their purchasing in response to economic conditions; the uncertainty of economic growth or recession; stock repurchases; changes in the regulatory environment in which Kroger operates; Kroger's ability to retain pharmacy sales from third party payors; consolidation in the healthcare industry, including pharmacy benefit managers; Kroger's ability to negotiate modifications to multi-employer pension plans; natural disasters or adverse weather conditions; the effect of public health crises or other significant catastrophic events; the potential costs and risks associated with potential cyber-attacks or data security breaches; the success of Kroger's future growth plans; the ability to execute our growth strategy and value creation model, including continued cost savings, growth of our alternative profit businesses, and our ability to better serve our customers and to generate customer loyalty and sustainable growth through our strategic moats of fresh, our brands, personalization, and seamless; and the successful integration of merged companies and new partnerships. Our ability to achieve these goals may also be affected by our ability to manage the factors identified above. Our ability to execute our financial strategy may be affected by our ability to generate cash flow. Kroger's effective tax rate may differ from the expected rate due to changes in tax laws, the status of pending items with various taxing authorities, and the deductibility of certain expenses. Kroger assumes no obligation to update the information contained herein unless required by applicable law. Please refer to Kroger's reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties. Note: Kroger's quarterly conference call with investors will broadcast live at 10 a.m. (ET) on June 16, 2022 at ir.kroger.com. An on-demand replay of the webcast will be available at approximately 1 p.m. (ET) on Thursday, June 16, 2022. 1st Quarter 2022 Tables Include: Consolidated Statements of Operations Consolidated Balance Sheets Consolidated Statements of Cash Flows Supplemental Sales Information Reconciliation of Net Total Debt and Net Earnings Attributable to The Kroger Co. to Adjusted EBITDA Net Earnings Per Diluted Share Excluding the Adjustment Items Operating Profit Excluding the Adjustment Items   Table 1. THE KROGER CO. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) (unaudited) FIRST QUARTER 2022 2021 SALES $    44,600 100.0 % $ 41,298 100.0 % OPERATING EXPENSES MERCHANDISE COSTS, INCLUDING ADVERTISING, WAREHOUSING AND TRANSPORTATION (a), AND LIFO CHARGE (b) 34,952 78.3 31,947 77.4 OPERATING, GENERAL AND ADMINISTRATIVE (a) 6,997 15.7 7,424 18.0 RENT 256 0.6 261 0.6 DEPRECIATION AND AMORTIZATION 890 2.0 861 2.1 OPERATING PROFIT 1,505 3.4 805 2.0 OTHER INCOME (EXPENSE) INTEREST EXPENSE (177) (0.4) (165) (0.4) NON-SERVICE COMPONENT OF COMPANY-SPONSORED PENSION PLAN COSTS 16 - 18 - LOSS ON INVESTMENTS (532) (1.2) (479) (1.2) NET EARNINGS  BEFORE INCOME TAX EXPENSE 812 1.8 179 0.4 INCOME TAX EXPENSE  146 0.3 36 0.1 NET EARNINGS INCLUDING NONCONTROLLING INTERESTS 666 1.5 143 0.4 NET INCOME ATTRIBUTABLE TO       NONCONTROLLING INTERESTS 2 - 3 - NET EARNINGS ATTRIBUTABLE TO THE KROGER CO.  $         664 1.5 % $       140 0.3 % NET EARNINGS ATTRIBUTABLE TO THE KROGER CO.       PER BASIC COMMON SHARE $        0.91 $      0.18 AVERAGE NUMBER OF COMMON SHARES USED IN       BASIC CALCULATION 722 752 NET EARNINGS ATTRIBUTABLE TO THE KROGER CO.       PER DILUTED COMMON SHARE $        0.90 $      0.18 AVERAGE NUMBER OF COMMON SHARES USED IN       DILUTED CALCULATION 733 760 DIVIDENDS DECLARED PER COMMON SHARE $        0.21 $      0.18 Note: Certain percentages may not sum due to rounding. Note: The Company defines First-In First-Out (FIFO) gross profit as sales minus merchandise costs, including advertising, warehousing and transportation, but excluding the Last-In First-Out (LIFO) charge. The Company defines FIFO gross margin as FIFO gross profit divided by sales. The Company defines FIFO operating profit as operating profit excluding the LIFO charge. The Company defines FIFO operating margin as FIFO operating profit divided by sales. The above FIFO financial metrics are important measures used by management to evaluate operational effectiveness.  Management believes these FIFO financial metrics are useful to investors and analysts because they measure our day-to-day operational effectiveness......»»

Category: earningsSource: benzingaJun 16th, 2022

5 Shoes & Retail Apparel Stocks to Eye in a Prospering Industry

The Shoes and Retail Apparel industry looks prim on gains from strong consumer demand, product innovation and digital growth. These aspects bode well for DECK, SKX, SHOO, CAL and RCKY. Companies in the Zacks Shoes and Retail Apparel industry have been benefiting from continued demand for activewear and footwear, given the adoption of a healthy lifestyle. The industry players focused on product innovation, store expansion, digital investments and omni-channel growth are poised to gain in the current market. This has compelled the activewear segment to resort to innovations to make their assortments more comfortable and fashionable. However, elevated costs related to supply-chain headwinds, as well as to support brand campaigns and digital investments have been deterrents.The industry participants have been consistently investing in product innovation based on customer feedback and requirements. Investments in products and e-commerce portals bode well for players like Deckers Outdoor DECK, Skechers U.S.A., Inc. SKX, Steven Madden SHOO, Caleres CAL and Rocky Brands RCKY.About the IndustryThe Zacks Shoes and Retail Apparel industry comprises companies that design, source and market clothing, footwear and accessories for men, women and children under various brand names. The product offerings of the companies mostly include athletic and casual footwear, fashion apparel and activewear, sports equipment, bags, balls, and other sports and fashion accessories. The companies showcase their products through their branded outlets and websites. However, some companies also distribute products via other retail stores such as national chains, online retailers, sporting goods stores, department stores, mass merchandisers, independent retailers and catalogs.A Look at What's Shaping Shoes and Retail Apparel Industry's FutureFitness Trends Aid Industry: Rising health consciousness and the willingness to live an active lifestyle and look fit have led consumers to incorporate sports and fitness routines into their daily lives. The demand for activewear/athleisure products has increased significantly over time, which is expected to accelerate in 2022. Athletic goods and apparel companies now offer everything from sweatshirts, leggings, pants, jackets and tops to yoga wear and running clothes for both men and women. People are clubbing athleisure styles like tops with blazers to give them a formal look at office meetings. The participants remain focused on product innovations, store expansion and enhancing e-commerce capabilities to gain market share. The companies continue to innovate styles, materials and colors and incorporate functional designs to grab a large share of the fast-growing market. The increased participation of women in sports and outdoor activities in recent years has been a boon for the industry.E-Commerce Investments: E-commerce has been playing a crucial role in the athleisure market’s growth. The companies in the segment are looking to build a customer base through websites, social media and other digital channels. As consumers continue to show interest in shopping from home, growth of athletic-inspired apparel and digital sales are likely to stay. Companies focused on expanding their athletic-based apparel lines and building on e-commerce capabilities are expected to witness growth in 2022. Efforts to accelerate deliveries through investments in supply chain and order fulfillment avenues are likely to provide an edge in the market. Simultaneously, companies are investing in renovations and improved checkouts as well as mobile point-of-sale capabilities to make stores attractive. The efforts to enhance the guest experience through multiple channels are likely to contribute significantly to improving traffic and transactions both in stores and online.Cost Headwinds: Companies are witnessing elevated costs due to factors like commodity cost inflation, increase in freight costs and reinvestments and other impacts. A number of companies project increased freight and logistics costs to hurt margins in the near term. Elevated marketing expenses, higher operating overhead and demand-creating expenses, and increased investments toward enhancing store and digital operations have been pushing up SG&A costs. Also, the companies are witnessing higher costs to support brand campaigns and digital investments. The return of sporting activities and events has resulted in higher costs compared with the last year’s COVID-related closure. Additionally, a tough and competitive labor market remains a concern. These factors pose a threat to industry players’ margins.Zacks Industry Rank Indicates Bright ProspectsThe Zacks Shoes and Retail Apparel Industry is a 12-stock group within the broader Zacks Consumer Discretionary sector. The industry currently carries a Zacks Industry Rank #96, which places it in the top 38% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates continued outperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gaining confidence in this group’s earnings growth potential.Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and the valuation picture.Industry Vs. the SectorThe Zacks Shoes and Retail Apparel industry has outperformed its sector but underperformed the S&P 500 in the past year.While stocks in the industry have collectively declined 13.7%, the Zacks S&P 500 composite has dropped 12%. Meanwhile, the Zacks Consumer Discretionary sector has declined 39.4%.One-Year Price PerformanceShoes and Retail Apparel Industry's ValuationOn the basis of forward 12-month price-to-earnings (P/E), which is commonly used for valuing Consumer Discretionary stocks, the industry is currently trading at 22.07X compared with the S&P 500’s 16.65X and the sector’s 17.52X.Over the last five years, the industry has traded as high as 36.79X and as low as 19.59X, with the median being at 25.81X, as the chart below shows.Price-to-Earnings Ratio (Past 5 Years)5 Shoes & Retail Apparel Stocks to WatchCaleres: Caleres is a leading footwear retailer and wholesaler in the United States, China, Canada, China, and Guam. It operates through Famous Footwear and Brand Portfolio segments. The stock of this Saint Louis, MO-based company has been benefiting from positive consumer demand trends and accelerated recovery in the footwear marketplace, which have been aiding its sales. The momentum in the Famous Footwear brand is expected to contribute meaningfully to sales growth. Strong performances of CAL’s emerging brands, including Vionic, Sam Edelman, Allen Edmonds and Blowfish Malibu, are expected to be drivers.Management anticipates strong performance at the Famous Footwear brand and gains in Brand Portfolio, leveraging of diversified brand model and the continued execution of ongoing strategic priorities to aid CAL’s performance. Caleres's focus on the consumer's evolving preferences and efforts to drive growth across its omni-channel ecosystem bode well. The consensus estimate for CAL’s fiscal 2022 EPS has moved up 11.3% in the past 30 days. The company has a trailing four-quarter earnings surprise of 62.9%, on average. Shares of this Zacks Rank #1 (Strong Buy) company rose 0.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here. .Price and Consensus: CALRocky Brands: Rocky Brands is a leading footwear and accessories company that designs, manufactures and markets premium quality footwear and apparel under a portfolio of well-recognized brand names. The company’s notable brands portfolio includes Rocky, Georgia Boot, Durango, Lehigh, The Original Muck Boot Company, XTRATUF, Servus, NEOS and Ranger. RCKY is benefiting from the flexibility and ability to innovate quickly, given its small size of business.Rocky Brands has been witnessing robust demand for its portfolio of leading brands, which has been aiding performance. The company is making strong progress in regaining the full efficiency of its Ohio distribution center, which along with the new distribution center in Reno, NV, is likely to have improved shipping capacity. The Zacks Consensus Estimate for its 2022 earnings has been unchanged in the past 30 days. It has a trailing four-quarter negative earnings surprise of 2.3%, on average. This Zacks Rank #1 stock has declined 32.6% in the past year.Price and Consensus: RCKYSteven Madden: Steven Madden designs, sources, markets and sells fashion-forward name brand and private label footwear for women, men, and children and private label fashion handbags and accessories globally. SHOO has been gaining from a robust e-commerce momentum, product assortments and accelerated business recovery. The company’s focus on creating trend-right merchandise assortment, deepening relations with customers via marketing, enhancing the digital commerce agenda, expanding international markets and efficiently controlling expenses bodes well. This has been boosting consumer demand, thereby contributing to the overall performance for a while now.Strength in SHOO’s digital and brick-and-mortar channels bodes well. Management is on track to expand the international business. The company’s e-commerce wing continues to gain from prudent investments in digital marketing as well as efforts to optimize the features and functionality of its website. Steven Madden has also been significantly accelerating its digital commerce initiatives with respect to distribution. SHOO has a trailing four-quarter earnings surprise of 44%, on average. The consensus estimate for the company’s 2022 EPS has moved down by a penny in the past seven days. Shares of the Zacks Rank #2 (Buy) footwear company have declined 18.2% in the past year.Price and Consensus: SHOOSkechers: Skechers is a leading manufacturer and seller of footwear for men, women and children in the United States and overseas. SKX has been gaining from the continued demand for comfort products and momentum in the direct-to-consumer business. Skechers remains focused on developing comfort footwear, expanding apparel offerings, advancing e-commerce capabilities and tapping opportunities to drive overall sales. Growth across the domestic and international channels, driven by wholesale and direct-to-consumer sales, bodes well. The company remains committed to directing resources to enhance its digital capabilities, which include augmenting website features, mobile applications and loyalty programs. Investments made to integrate store and digital ecosystems for developing a seamless omnichannel experience are likely to drive greater sales.Skechers’ investments in long-term growth strategies, including brands and infrastructural capabilities, have been yielding results. Management is optimistic regarding the strength of its brands and the relevance of its products in the forthcoming periods. Shares of the Manhattan Beach, CA-based company have declined 19.5% in the past year. The company has a trailing four-quarter earnings surprise of 23.6%, on average. The consensus estimate for SKX’s 2022 EPS has been unchanged in the past 30 days. It currently carries a Zacks Rank #3 (Hold).Price and Consensus: SKXDeckers: This Goleta, CA-based company is a leading designer, producer, and brand manager of innovative, niche footwear and accessories developed for outdoor sports, and other lifestyle-related activities. The company sells products primarily under five proprietary brands — UGG, HOKA, Teva, Sanuk, and Koolaburra. Strength in HOKA ONE ONE and UGG brands as well as growth in direct-to-consumer and wholesale channels has been aiding DECK’s performance. Deckers is targeting profitable and underpenetrated markets, and remains focused on product innovations, store expansion and enhancing e-commerce capabilities. The company’s focus on expanding its brand assortments, bringing a more innovative line of products, targeting consumers digitally and optimizing omni-channel distribution bode well.In keeping with the changing trends, Deckers has been constantly developing its e-commerce portal to capture incremental sales. DECK has made substantial investments to strengthen its online presence and improve shopping experience for its customers. The company’s focus on opening smaller concept omni-channel outlets and expanding programs such as Retail Inventory Online; Infinite UGG; Buy Online, Return In Store; and Click and Collect to enhance customers’ shopping experience is likely to boost the top line in the quarters ahead. DECK has a trailing four-quarter earnings surprise of 1,115%, on average. Shares of the Zacks Rank #3 company have declined 19.3% in the past year. The consensus estimate for its fiscal 2023 EPS has moved up 3.4% in the past 30 days.Price and Consensus: DECK 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +25.4% per year. So be sure to give these hand-picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Deckers Outdoor Corporation (DECK): Free Stock Analysis Report Skechers U.S.A., Inc. (SKX): Free Stock Analysis Report Steven Madden, Ltd. (SHOO): Free Stock Analysis Report Rocky Brands, Inc. (RCKY): Free Stock Analysis Report Caleres, Inc. (CAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 13th, 2022

Five Below (FIVE) Q1 Earnings Beat, Sales Miss, Comps Decline

Five Below's (FIVE) first-quarter results reflect a comparable sales decline of 3.6%. The company's muted view for fiscal 2022 hurts the stock. Shares of Five Below, Inc. FIVE fell 8.3% during the after-market trading hours on Jun 8, following the company’s first-quarter fiscal 2022 results. The investors fretted over lower-than-expected sales and a muted view for the fiscal year. Although disciplined expense management helped post better-than-expected bottom-line results, the same declined sharply from the year-ago period.Let’s IntrospectFive Below delivered first-quarter earnings of 59 cents a share that came a penny ahead of the Zacks Consensus Estimate. However, the bottom line fell significantly from earnings of 88 cents reported in the year-ago period.Net sales of $639.6 million increased 7% year over year but came below the Zacks Consensus Estimate of $653.2 million. Comparable sales for the quarter under discussion declined 3.6% against an increase of 162% registered in the year-ago period. While comp tickets decreased 1.9%, comp transactions fell 1.7% in the reported quarter.Gross profit climbed 2.9% year over year to $206.8 million; however, the gross margin contracted 130 basis points to 32.3%, owing to fixed cost deleverage.We note that SG&A expenses shot up 19.9% to $164.4 million, while as a percentage of net sales, the same deleveraged 280 basis points to 25.7%. Operating income was $42.3 million for the quarter under discussion, down from $63.7 million reported in the year-ago period. Also, operating margin shrunk 410 basis points to 6.6% during the quarter due to lower gross margin and SG&A expenses.Five Below, Inc. Price, Consensus and EPS Surprise Five Below, Inc. price-consensus-eps-surprise-chart | Five Below, Inc. QuoteFinancialsThis presently Zacks Rank #3 (Hold) player ended the quarter with cash and cash equivalents of $120.5 million and short-term investment securities of $189.1 million. Total shareholders’ equity was $1,114.9 million as of Apr 30, 2022. Five Below repurchased 247,132 shares for approximately $40 million in the quarter.Five Below anticipates gross capital expenditures of approximately $225 million in fiscal 2022, excluding tenant allowances. This includes about 160 new store openings, more than 200 conversions to the Five Beyond format, the opening of a new distribution center in Indiana, and investing in systems and infrastructure.Store UpdatesFive Below opened 35 new stores in the reported quarter. This took the total count to 1,225 stores as of Apr 30, 2022, reflecting an increase of 12.7% from the year-ago count. The company plans to open roughly 30 new stores in the second quarter and 160 new stores in fiscal 2022. For the next fiscal year, it plans to open more than 200 stores.GuidanceFive Below envisions second-quarter fiscal 2022 net sales in the range of $675 million to $695 million compared with $646.6 million reported in the year-ago period. We note the company’s sales projection was shy of the Zacks Consensus Estimate of $733 million.The company expects a 2% to 5% decline in comparable sales in the second quarter against an increase of 39.2% registered in the year-ago period. Management anticipates second-quarter earnings between 74 cents and 86 cents per share. This suggests a decline from earnings of $1.15 reported in the prior-year period. The Zacks Consensus Estimate for the second-quarter earnings per share currently stands at $1.22.Five Below foresees a contraction of about 450 basis points in second-quarter operating margin, driven by deleverage in both gross profit and SG&A expenses.Management projected fiscal 2022 net sales in the band of $3.04 billion to $3.12 billion, below the consensus estimate of $3.22 billion. The current view is also lower than the earlier forecast of $3.16-$3.26 billion. The company had reported net sales of $2.85 billion last fiscal.Five Below anticipates comparable sales to be flat to down 2% against an increase of 30.3% recorded in the prior year. Management guided earnings between $4.85 and $5.24 per share, falling short of the consensus mark of $5.49. The company had reported earnings of $4.95 in fiscal 2021.The company expects its operating margin to be approximately 12.2%, lower than 13.3% reported last year, stemming from deleverage in both gross profit and SG&A expenses.Over the past six months, shares of Five Below have fallen 32.8% compared with the industry’s decline of 28.4%.Key Picks in RetailHere we have highlighted three better-ranked stocks, namely, Steven Madden SHOO, Boot Barn Holdings BOOT and G-III Apparel GIII.Steven Madden is a leading designer and marketer of fashion-forward footwear, accessories and apparel for women, men and children. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Steven Madden’s current financial year revenues and EPS suggests growth of 15.2% and 19.6%, respectively, from the year-ago reported figure. SHOO has a trailing four-quarter earnings surprise of 44%, on average.Boot Barn Holdings, a lifestyle retailer of western and work-related footwear, apparel and accessories, flaunts a Zacks Rank #1. BOOT has an expected EPS growth rate of 20% for three-five years.The Zacks Consensus Estimate for Boot Barn Holdings’ current financial year sales and EPS suggests growth of 17% and 4.4%, respectively, from the year-ago period.G-III Apparel designs, sources and markets apparel and accessories under owned, licensed and private label brands. The stock currently carries a Zacks Rank #2 (Buy).The Zacks Consensus Estimate for G-III Apparel’s current financial year revenues and EPS suggests growth of 8.8% and 7.2%, respectively, from the year-ago reported figure. G-III Apparel has a trailing four-quarter earnings surprise of 97.5%, on average. Profiting from the Metaverse, The 3rd Internet Boom (Free Report): Get Zacks' special report revealing top profit plays for the internet's next evolution. Early investors still have time to get in near the "ground floor" of this $30 trillion opportunity. You'll discover 5 surprising stocks to help you cash in.Download the report FREE today >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report GIII Apparel Group, LTD. (GIII): Free Stock Analysis Report Steven Madden, Ltd. (SHOO): Free Stock Analysis Report Five Below, Inc. (FIVE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 9th, 2022