Analyst CornerWEINSWIG’S WEEKLY FEBRUARY 22, 2019 Coresight Research February 22, 2019 Executive Summary This week’s note “From the Desk of Deborah Weinswig” discusses what U.S. Census Bureau data and company reports tell us about the holiday retail season. Walmart’s holiday sales blew past expectations: Sales at U.S. stores open at least a year grew 4.2% and U.S. digital sales grew 43% over the holiday stretch compared with last year. Germany’s Metro has given its Makro Belgium cash-and-carry business a capital injection of €40 million ($45 million) along with a warning that the business may face closure if it does not improve in 2019. QL Resources, which operates the FamilyMart chain of Japanese convenience stores in Malaysia, is proceeding with plans to launch 300 new stores by March 2022, despite a slowdown in Malaysia’s economy. This document was generated for
Insight ReportJanuary 2019 US Monthly Retail Traffic and In-Store Metrics Report: Post-Holiday Fatigue and Inclement Weather Drive Underwhelming January Traffic Coresight Research February 22, 2019 Executive SummaryCoresight Research’s monthly reports keep you up to date on US and UK retail sales, US retail traffic and in-store metrics, selected US retailers’ same-store sales and key global consumer indicators. Click here to view our full collection of Monthly Reports. Our US Monthly Retail Traffic and In-Store Metrics Report reviews year-over-year changes in selected store-based metrics, including sales, traffic and conversion rates. Highlights from our January Retail Traffic report: Traffic declined 10.7% year over year in January. While the conversion rate grew 0.4 percentage points, average transaction value (ATV) grew 5.5%, and the product return rate declined by 2.4 percentage points. January performance varied over the course of the four weeks, with in-store net sales declining between 6.3% and 8.1% and traffic declining between 6.9% and 16.5%, with the second week of the month being the worst performing for both metrics. ATV and shopper yield registered growth in each week of the month. The Midwest experienced the largest year-over-year decline in traffic at 17.5%, while the South registered the smallest decline at 5.8%. The Midwest experienced the largest year-over-year in-store sales decline, down 16.8%, while the West registered the lowest dip in sales, down 1.4%. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Company Earnings UpdateGildan (NYSE: GIL) 4Q18 Results: Activewear Drives Strong Revenue Growth Coresight Research February 22, 2019 Executive Summary Gildan 4Q18 sales rose 13.6% driven by a 22.3% increase in activewear sales reflecting higher fleece shipments along with higher net selling prices. Adjusted operating margin expanded 230 bps due to a 300 bps decline in the SG&A expense ratio. The company’s 2019 outlook includes a 10% increase in adjusted EPS and mid-single-digit sales growth. This document was generated for
Event CoverageCountdown to Shoptalk 2019: Startup Pitch Competition Participants Profile, Part 1 — Ladingo and Increasingly Coresight Research February 22, 2019 Executive SummaryThe Coresight Research team will attend and participate in Shoptalk 2019 March 3-6 in Las Vegas. The event brings together more than 8,000 attendees and more than 300 speakers to discuss the rapid evolution of how consumers discover, shop and buy. On March 3, Coresight Research CEO and Founder Deborah Weinswig will emcee a startup pitch competition featuring 15 early-stage technology companies. Judges will select two winners for a $25,000 prize. Participating startups all have: $3 million or less in funding. Four years or less since founding. Scalable and innovative solutions for physical retail, omnichannel and e-commerce. Business-to-business solutions. Below, we look at two of the companies that will compete: Ladingo and Increasingly. This document was generated for
Company Earnings UpdateCVS (NYSE: CVS) 4Q18 Results: Revenues Beat Consensus; FY19 Profit Outlook Poor Due to Aetna Integration Coresight Research February 22, 2019 Executive Summary CVS reported 4Q18 revenues of $54.4 billion, beating the consensus estimate and up 12.5% year over year. Adjusted EPS came in $2.14, up 11.5% year over year and above the consensus estimate. CVS grew FY18 revenues by 5.3% to $194.0 billion and adjusted EPS by 19.9% to $7.08. For FY19, CVS expects revenues to grow 28.4-30.7% to $249.9-254.3 billion. This document was generated for
Market Navigators/Market OutlookSector Overview: Convenience Stores — As Consumers Seek Ever More Convenience, Digitalization Prevails Coresight Research February 21, 2019 Executive SummaryEach of our Sector Overview reports provides an essential briefing on a sector or market. This report focuses on the convenience store sector. Convenience stores are adapting to consumers who live in an increasingly digitalized world and demand high-quality offerings and more convenience. Incumbent convenience store players are responding to these demands with food and beverages prepared on-site, loyalty programs and more digitalized businesses. The sector as a whole is seeing modest growth, while top players continue to capture sizable market shares. We expect to see further consolidation through M&A. Globally, there is a great deal of economic and political uncertainty. Trade tensions, Brexit and currency risks will continue to weigh on consumer sentiment and spending. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Insight ReportA Look into Starbucks’ Mini App on Taobao and Alipay: All Services in One Lite App As the Companies Deepen Their Cooperation Coresight Research February 21, 2019 Executive Summary In December 2018, Starbucks launched a mini program within Alibaba’s ecosystem. The app provides a one-stop experience that links Starbucks’ service with Alibaba’s apps including Taobao, Tmall and Alipay. Starbucks’ mini program can be accessed through different means and allows users to place orders for delivery and access membership functions. The Starbucks mini program could enable Starbucks to potentially better understand customers, increase the number of loyalty members and increase its digital reach. Alibaba can demonstrate its capability of empowering traditional retailers and deepen its relationship with Starbucks through this initiative. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Flash ReportSainsbury’s-Asda Merger In Doubt: Is It Time for Sainsbury’s to Refocus? Coresight Research February 21, 2019 Executive SummaryThe U.K.’s Competition and Markets Authority (CMA) published its provisional findings on the planned merger of leading grocery retailers Sainsbury’s and Asda. The CMA stated: “We have provisionally found that, should the two merge, shoppers could face higher prices, reduced quality and choice, and a poorer overall shopping experience across the U.K.” Sainsbury’s refuted the CMA’s claims, while its shares fell 15.5% on the back of doubt the merger will proceed. Even if the merger is allowed to proceed, the CMA will likely demand a substantial number of store divestitures — which could present challenges in a market in which demand for large stores is declining. Sainsbury’s may need to consider reviewing the merger and look for alternatives to strengthening its business: The company has been losing market share and store standards have fallen. A challenging merger process could further distract management from confronting existing challenges. This document was generated for
Market Navigators/Market OutlookSector Overview: Mass Merchants — Dollar Stores Expand, Mass Merchandisers Digitalize and Costco Widens Its Lead Among Warehouse Clubs Coresight Research February 21, 2019 Executive SummaryEach of our Sector Overview reports provides an essential briefing on a sector or market. In this report, we look at discount stores, mass merchandisers and warehouse clubs. Macroeconomic data continue to support strong consumption. Consumers embraced “cheap chic” during the Global Financial Crisis of 2007–2008 — and stayed at the value end of the spectrum. Mass merchants are embracing private label, deploying technology such as robots to improve the shopping experience, be more efficient and take on Amazon. Dollar stores continue lead retail in terms of growth in new stores. The group, in general, has not widely embraced e-commerce, however Costco, Target and Walmart are aggressively doing so. Costco is leading the pack in terms of comparable sales growth and driving an acceleration in its ecommerce efforts. Activity in the sector is benefiting from the return of BJ’s Wholesale Club as a public company and startups that are leveraging e-commerce to take on the incumbents. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Company Earnings UpdateWalmart (NYSE: WMT) Fiscal 4Q19 Earnings: Beats EPS Estimates from Strong Expense Management Coresight Research February 20, 2019 Executive Summary Walmart reported fiscal 4Q19 adjusted EPS of $1.41, up 6.0% from $1.33 in the year-ago quarter and beating the $1.33 consensus estimate. Total revenues were $138.8 billion, up 1.9% year over year and in line with the consensus estimate. U.S. comp sales increased 4.2%, ahead of the 3.1% consensus estimate, on a 0.9% traffic increase and a 3.3% ticket increase. Walmart U.S. e-commerce grew 43%. Walmart maintained sales guidance of at least 3% and updated EPS guidance to a low single-digit decline (but up by the low-mid single digits excluding Flipkart). This document was generated for
Insight Report2019 Tax Tracker #2: Year-over-Year Decline in Tax Filings Starts to Moderate Coresight Research February 20, 2019 Executive SummaryThe U.S. Internal Revenue Service (IRS) tracks tax return filings on a weekly basis. As of February 8, the IRS had received 28.8 million tax returns, down 6.9% year over year. A total of 11.4 million refunds had been issued as of that date (down 15.8% year over year), totaling $22.2 billion (down 23.2% year over year) and averaging $1,949 (down 8.7% year over year). The drop is in returns filed is likely due to confusion from tax law changes, combined with reduced availability of IRS agents due to the government shutdown. Given a solid U.S. economy, higher wages and employment rates, total refunds are likely to be higher in 2019, once the disruption from the government shutdown is resolved. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Market Navigators/Market OutlookSector Overview: Apparel & Footwear — Consumer Connectivity Changing Sector Landscape Coresight Research February 20, 2019 Executive SummaryEach of our Sector Overview reports provides an essential briefing on a sector or market. Connectivity and a health and wellness focus are the consumer lifestyles underpinning changing trends in the apparel and footwear sector. The global apparel and footwear market achieved a 3.9% five-year CAGR in the 2013-2018 period, as fast fashion curtailed value growth. Sports footwear drove sector growth and has become the social currency of today’s youth, benefiting from high profile collaborations across brands and celebrities/sports figures. Industry growth is projected to accelerate in the 2018-2023 period, reflecting a growing global middle class, with India and Asia driving much of the increment as per capita apparel and footwear ownership increases. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Market Navigators/Market OutlookSector Overview: US Department Stores — Off-Price Formats and Marketplaces are Winning (and Millennials are Shopping Department Stores) Coresight Research February 18, 2019 Executive SummaryEach of our Sector Overview reports provides an essential briefing on a sector or market. In this report, we review the U.S. department-store sector. In 2018, sales made through U.S. department stores totaled $76.2 billion according to Euromonitor International. In-store sector sales are forecast to decrease at a compound annual growth rate of 5.8% to 2023, reaching $56.6 billion. Department stores are expanding off-price businesses with the hope of attracting customers to full-price merchandise, too. Nordstrom reported that 6.5 million new customers came to Nordstrom through its off-price business in 2018 and one-third of those customers become full-price customers. Department stores are pairing up with unique partners including Aldi and Amazon to drive traffic. Department stores are popular among millennials aged 25–34: According to Prosper Insights & Analytics, 47.8% of millennials shopped at a department store over Thanksgiving weekend, 2018 — a higher proportion than was recorded for any other age group. We predict department stores will adopt smaller formats, continue to rightsize and collaborate with unique partners. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for
Question of the WeekWho Is Benefiting from the Absence of Toys “R” Us? Coresight Research February 18, 2019 QUESTION OF THE WEEK: Who Is Benefiting from the Absence of Toys “R” Us? Walmart leads in toys, but Amazon grew shopper numbers at the fastest clip. This document was generated for
Company Earnings UpdateUnicharm (TYO: 8113) FY18 Results: Revenue Below Consensus, China Remains a Main Market Coresight Research February 18, 2019 Executive Summary Unicharm reported FY18 revenue of ¥688.3 billion, slightly below the consensus estimate of ¥689.2 billion and up 7.3% from FY17. Revenues increased across segments, with personal care up 7.9% year over year. Asia (except Japan) was a key region driving the company’s top-line growth, with 10.0% revenue growth in FY18. This document was generated for
