All discounters posted strong y/y comparable store sales growth in May08 supported by growth in traffic and average transaction size. Unlike discounters, department stores displayed a reverse trend as they posted negative y/y comp-store sales growth. Clothing and accessories retailers reported mixed results. read more…
Of the S&P500 stocks, Gridstone covers 370 companies. We offer full coverage overlap in the Consumer Services and Nondurables (CSND), Consumer Durables, Technology, Telecom, Energy and Utilities sectors and majority overlap in Financial Services and Industrials sectors. We are not yet covering any stocks in the Materials and Health Care sectors. This note looks at the sectoral quarterly earnings trend since Sept-06 and YoY growth in diluted EPS since Sept-07 of the S&P500 companies in the Gridstone universe. read more…
Gayatri Hardikar, Rima Shah, Vaibhavi Tavare and Hemina Mehta have also contributed to this note
In April-08, Discounters benefited from the shift in the timing of Easter. On the other hand, department stores and clothing and accessories retailers did not perform as well in spite of some benefit from the calendar shift. The strongest segments for the Discounters were food, consumable perishables and healthcare categories while apparel and lawn and garden categories were soft. read more…
Amazon (AMZN) and Wal-Mart (WMT) are giants on their own rights. Amazon is the world’s largest internet retailer while Wal-mart is the largest discount retailer. On 28 April 28, 2008, AMZN’s stock price was trading at USD81.97, at a P/E (ttm) multiple of 67.9 and WMT’s was at USD57.35, at a P/E (ttm) multiple of 18.5. We review the two companies in order to better understand the fundamentals that are currently in play for the two giants, and to better understand if AMZN deserves the price premium over WMT. read more…
Vishal Kapse and Amit Sureka also contributed to this Note.
March-08 comparable store sales showed an impact of calendar shift in the timing of Easter on retailers. Shops were closed on Easter resulting in one less selling day in March. Department stores and clothing and accessories retailers were the most impacted amongst the retailers. On the contrary, discounters were benefitted by strong Easter sales. Most retailers are now expecting higher y/y comparable store sales for ME Apr-08 on account of the Easter timing shift. read more…
Hemina Mehta and Vishal Kapse also contributed to this Note
Increase in average transaction values along with higher traffic resulted in better than expected February ’08 comparable store sales performance among discounters, while department stores and apparel retailers showed an opposite trend. Comparable store sales performance of discounters surpassed that of department stores and apparel retailers. All retailers will be closed for one day in March 2008 due to Easter Sunday, leading to lowered March’08 comparable store sales guidance; this calendar shift is expected to benefit comparable store sales performance in April 2008.
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Arpita Lulla and Vishal Kapse also contributed to this Note
Ongoing credit crisis and continued weakness in the housing market resulted in lower than expected January ’08 comparable store sales performance across all retailers. Customers continued to feel pressured and chose to spend on consumables rather than on high ticket items.
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Vishal Kapse also contributed to this Note
Amazon.com Inc., the world’s largest internet retailer, reported its fourth-quarter results on 30 Jan-08. Revenues grew 42% y/y for the QE Dec-07 due to strong sales in electronics, toys, soft goods (which includes jewelry, apparel, shoes) and sporting goods. Net income also posted a strong growth of 111% y/y and diluted EPS increased 109% y/y to $0.48 from $0.23. Even so, Amazon’s stock price was punished by investors – the stock fell from $77.70 on 31 Jan-08 to $72.09 on 5 Feb-08. We believe that this is because investors are disappointed by the lowered margin outlook provided by the company.
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Hemina Mehta and Vishal Kapse also contributed to this Note
Decline in traffic along with difficult year-on-year comparisons due to shift of one pre-holiday shopping week to November from December, led to poor December ’07 comparable store sales performance among retailers. Customers continue to be cautious in their buying and seem to be shopping at stores where they can avail good bargains resulting in better performance for warehouse clubs.
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Arpita Lulla, Hemina Mehta and Vishal Kapse also contributed to this Note
Calendar shift (resulting in an additional week after Thanksgiving) and cold weather boosted November comparable store sales for most retailers
Discounters and department stores outperformed apparel retailers reflecting tighter consumer spending due to the current macro-economic conditions. Most retailers have a conservative outlook towards December sales and have estimated lower y/y comparable store sales growth.
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