Wear-Now Merch Helps Retailers Ride Heat Wave Click to Open PDF
A few retail executives in this story think that there was no negative impact of the hot weather in July 2011. Actually, some retail execs seem to view the hot weather in July 2011 as a positive.
Posted: Posted: Tuesday, July 26, 2011
Source: WWD

American Apparel Links With eBay Click to Open PDF
Much smarter strategies than opening stores.
Posted: Tuesday, July 26, 2011
Source: WWD

Dunkin’ to Fuel Coffee Wars Click to Open PDF
Surprise, DNKN sells more “hot regular coffee and iced coffee” than any other fast-food chain in the U.S., according to NPD.
Posted: Wednesday, July 27, 2011
Source: WSJ

Wal-Mart CEO Warns Over U.S. Debt Default Click to Open PDF
If Mr. Duke only had the same ability to forecast his own company’s financial performance as he does forecasting the potential for a U.S. default, he’d have some job security.
Posted: Thursday, July 28, 2011
Source: WWD

Feds Shut Down 16 Counterfeit Web Sites Click to Open PDF
Seems like an uphill battle, but needed nonetheless.
Posted: Thursday, July 28, 2011
Source: WWD

Top Marketing Exec Exits Penney’s Click to Open PDF
After 33 years at the company, the company’s top marketing exec decides to retire with only a 3-4 week notice. Uh, huh. It’s going to be an ugly back half of the year at JCP.
Posted: Posted: Monday, July 18, 2011
Source: WWD

Tumble in Cotton Prices, New Wrinkle for Apparel Makers Click to Open PDF
Cotton prices have retreated -53% since the March 4th peak.
Posted: Friday, July 22, 2011
Source: WSJ

The Web’s New Domain Click to Open PDF
Protecting your brand on the Internet just became more expensive.
Posted: Friday, July 22, 2011
Source: WWD

NRF Study: Consumer Pessimism Reigns Click to Open PDF
Only 26.5% of those polled were confident or very confident about the economy. That represents BIGresearch’s lowest reading in over two years. The back half is going to be much uglier at the mall than the current level of expectations.
Posted: Friday, July 22, 2011
Source: WWD

Wal-Mart to Resume Sharing Sales Data With Nielsen Click to Open PDF
Nielsen data just became much more valuable. That said, why does WMT need to provide Nielsen its sales data to help them “identify category growth opportunities sooner?”
Posted: Friday, July 22, 2011
Source: WSJ

Occasionally, TRG will post a relatively current research note on Retail Geeks. Here’s a recent note we published on AAPL ahead of the company’s earnings release on Tuesday afternoon.

Apple (AAPL – $357.77) will again easily exceed the consensus sell-side EPS expectation in Q3 2010 (June 2011). In our view, GPM% upside versus consensus expectations appears to be the largest driver of material EPS outperformance versus today’s consensus sell-side estimates.

Why? GPM% pressures ease in Q3 2010 (June 2011) as the company has now fully lapped its iPad launch (i.e. sales mix is much less of an issue this quarter than the prior 4 quarters). iPad revenues are likely to double in Q3 versus LY, but so will the higher margin iPhones.

Also, keep an eye on Product Warranty Accruals. Per SEC filings, AAPL’s Product Warranty Accruals (see table below) have greatly out-stripped the actual Product Warranty Costs for the past 3 fiscal quarters. AAPL may receive a GPM% boost beginning in Q4 (if not earlier) if Product Warranty Accruals are scaled-back versus the prior year.

While GPM% should be much stronger than consensus expectations, we’re concerned about the top-line. There was no iPhone launch in June 2011 to lap last year’s launch of iPhone 4. Therefore, Q4 (September 2011) will not receive a material top-line boost via a product launch this year as it did last year.

In Q3 2010 (June 2011), we’re forecasting EPS of $6.29 versus the current consensus sell-side estimate of $5.80. Our estimate implies revenue growth of +59.3%, a +175 Bps GPM% versus LY, and a +395 Bps EBIT margin improvement versus LY.

In Q4 2010 (Sept 2011), we’re forecasting EPS of $6.84 versus the current consensus sell-side estimate of $6.42. Our estimate implies revenue growth of +32.8%, a +375 Bps GPM% versus LY, and a +451 Bps EBIT margin improvement versus LY.

See link for the full research note and an updated EPS model and company Data Packet.

In Major Retail Shift, Stores Begin to Shrink Click to Open PDF
The big-box store era has officially ended.
Posted: Posted: Monday, July 11, 2011
Source: WWD

Amazon to Battle Apple iPad With Tablet Click to Open PDF
It will be interesting to see how AMZN markets this product without hurting the Kindle.
Posted: Wednesday, July 13, 2011
Source: WWD

Netflix Plays Down DVDs Click to Open PDF
What a backlash from customers! Is this an inflection point? It’s also interesting to note that the company’s online selection of new releases is considered weak.
Posted: Wednesday, July 13, 2011
Source: WWD

Mass Merchants See Drop in Apparel Dollars Click to Open PDF
Apparel sales increased +1.4% in the trailing 12-months through April 2011 (compared to the similar prior year period). Interestingly, the mass merchant channel saw their sales decline a shocking -7.5%. Conversely, the factory outlet channel (smallest of the channels tracked here) grew +17.8% over the same period.
Posted: Wednesday, July 13, 2011
Source: WWD

In a First for Starbucks, Chile Workers Strike Click to Open PDF
The growing ‘wave’ of protests in Chile reaches SBUX.
Posted: Friday, July 15, 2011
Source: Reuters

Reminder: We like to look at the Commerce Department data on a comp basis (year-over-year change). Hey, it’s government data, so caveat emptor. This month’s report delayed due to an annual revision of the data. See Full Report Here

Big picture, our favorite measure of “what’s happening at the mall” (excludes Motor Vehicles, Gasoline, and Building Materials) suggests a +5.7% year-over-year sales improvement in June 2011. This represents a deceleration versus the adjusted +6.1% growth in May 2011.

The most compelling category specific storylines in June 2011 were:

Big ticket categories continue to struggle the most. In a month in which most categories reported stronger ‘comp’ sales than the prior month, Furniture & Home Furnishing Stores and Electronics & Appliance Stores each reported decelerating year-over-year growth rates in June 2011 versus May 2011.

After a relatively impressive March/April 2011, Electronics & Appliance Stores reported a material top-line deceleration in May/June 2011. Sales in May 2011 declined -1.5% versus LY. Sales in June 2011 declined -2.4% versus LY.

Grocery Stores delivered robust +6.8% year-over-year growth in June 2011. This represents the category’s strongest year-over-year growth since AT LEAST 1999 (our data only goes back that far).

Furniture & Home Furnishing Stores are down -20.7% over the past 4 years (i.e. June 2011 versus June 2007)… by far the worst performing category over that timeframe.

Monthly “Big Picture – what’s happening at the mall” year-over-year results for the trailing 12 months:

July 2010 August 2010 September 2010 October 2010 November 2010 December 2010 January 2011 February 2011 March 2011 April 2011 May 2011 June 2011

+4.2% (-0.7% 2-year) +4.8% (+1.2% 2-year) +4.8% (+3.3% 2-year) +5.0% (+4.7% 2-year) +5.8% (+6.2% 2-year) +4.9% (+7.7% 2-year) +5.2% (+7.5% 2-year) +5.2% (+8.5% 2-year) +5.3% (+10.4% 2-year) +6.0% (+10.5% 2-year) +6.1% (+10.3% 2-year) +5.7% (+10.5% 2-year)