Key Points: There were more than a few landmines in the consumer sector during Q1 earnings season, and lately, it’s been bellwether stocks like Starbucks, McDonald’s, Nike, and Lululemon that’ve been sounding the alarm. The aim of this report is to understand whether Q1 results signal a softening consumer, or if the issues are idiosyncratic in nature.
Key Points: The gig economy remains a mystery. It’s estimated that 25% of the population participates in informal work, but their efforts are not captured in official statistics. If they were, employment would be higher by as much as 4%. The gig economy has spawned some interesting business models like Uber and DoorDash. This report offers a perspective on those platforms and compares them to other delivery-based models, including Dominos, Amazon and UPS.
Key Points: There’s been a wide divergence of returns among consumer stocks over the past year. In the process, we’ve seen valuations converge. In this report, we dig into valuation – our aim is to determine whether it should play a central role or a supporting role in the stock selection process. We also seek to identify opportunities that boast both solid fundamentals and attractive valuation.
Key Points: Brands are supposed to be more valuable than resellers, but Costco’s stock has outperformed Pepsi, Dick’s has fared a lot better than Nike, and Ulta has bested Estee Lauder. This report analyzes dynamics in the footwear, beauty and home furnishings industries to understand what, if anything, is afoot.
Key Points: Another earnings season is winding down. As a group, the 140 consumer stocks we track grew Q4 revenues by +4%. Profits grew marginally but were +6% excluding the volatile auto sector. Normalization was evident in the results. Leisure stocks are still in recovery mode. Durables are battling a post-COVID hangover, and both autos and staples are struggling to get price and volume back into balance. This report is a consumer 10-K of sorts
Key Points: Amazon might be a tech stock, but its business model is very physical. Andy Jassy recognizes that. Since he took the helm, Amazon’s employee count is basically flat, fulfillment center growth has slowed to 8%, and AWS has extracted two additional years of service from its data centers. Mr. Jassy is squeezing blood from a stone, and the aim of this report is to figure out how much opportunity remains, and what’s baked
Brinker has been on a tear. Same store sales have been ripping even as other restaurants are struggling. We talk with CFO Mika Ware who has a unique perspective on the company’s turnaround. It’s a classic case of blocking and tackling — slimming down the menu, simplifying recipes, improving standards, and killer marketing that’s informed by insights and data. It…
Bill Rhodes led AutoZone for nearly 20 years. Over that time, the auto parts industry faced major change — auto cycles have come and gone, the industry has consolidated, e-Commerce has altered the landscape, and vehicles have become laden with technology. So far, it seems that the more things have changed, the more they’ve stayed the same — AutoZone has…
Friday’s revision to income and spending data has caused confusion. We’ve prepared a 10-minute podcast to review the investment implications. Some of the changes can be disregarded as noise, but there are three important takeaways. First, the latest iteration of personal income is highly disconnected from labor market data. Second, this is not the first time savings rates have been…
Yesterday, we caught up with Carol Tome, the CEO of UPS. We covered a lot of ground … as UPS typically does! We talked about the state of the global supply chain, the shift between goods and services, the de minimis rule, tariffs, UPS’ relationship with Amazon, the labor market, driverless vehicles, drones, AI, and more. Click the link to…
We’ve been getting a lot of questions from clients about the low-end consumer, so we assembled a deck of charts to walk through the pros and cons of betting on the low-end. There are a lot of variables to consider, and we walk through a chunk of them on this podcast, including job-finding prospects, wage growth, SNAP benefits, tariffs, interest…
We hosted a webinar reviewing the changing landscape for the US consumer. We are entering a new phase and see weaker spending growth ahead. This has significant implications for portfolio weightings. We have lightened up on our exposure to leisure stocks and are instead recommending clients over-weight rate-sensitive durables like housing, autos, and RVs. We assess the odds of a…