Facts from the Week: January 8, 2022
Highlights from $COST $MA $BKE $BOOT $PLNT $DKS $SMG $KIRK $MLKN $BBBY $HELE $FMCC $RDFN $IBKR Consumer, Housing, etc
Summary
In housing, mortgage rates tick up while Redfin reports 47% of buyers would “feel more urgency if rates passed 3.5%”
In consumer, Mastercard reports December sales up 8.1% vs 2019, Costco December US comps up 23.8% vs two years ago, and Boot Barn notes sales momentum has continued in the last ~two weeks
Consumer
Costco - $COST - December sales results
US Comps up 11.5%, up 23.8% vs 2 years ago (two-year comp down 80bps compared to Nov)
US Traffic up 8.5% (vs +3.3% in Nov), global traffic up 9.8% (vs 5.5)
Dec. inflation consistent with Nov. and mainly in fresh food and sundries (note November inflation moderated from October)
Global gas prices up 47% yoy (vs up 57% in Nov)
total sales up 16% and up 31% vs two years ago
Mastercard - $MA
The Buckle - $BKE - December sales
Boot Barn - $BOOT - December quarter pre-announcement
Compared to the quarter ended December 28, 2019, same store sales increased approximately 61.0%, including an increase in retail store same store sales of approximately 59.1% and an increase in e-commerce sales of approximately 69.3%.
We are very pleased that our momentum has continued into the fourth quarter, particularly as we cycled strong results in the last year period fueled by government stimulus payments. - CEO
Planet Fitness - $PLNT
“Before there was a vaccine, we did see a pullback on joins and workouts and cancellation spiking,” Rondeau said in an interview Monday on CNBC’s “Squawk Box.”
“During the delta variant and omicron, we’re not seeing that pullback. ... We’re not seeing members slowing to come in. We’re not seeing joins slowing. We’re not seeing cancelations rising,” -CEO
Dick’s - $DKS - pre-announcement
The Company also has raised its full year consolidated same store sales guidance and now expects consolidated same store sales to increase between 25.8% to 26.1%, compared to the previous guidance of between 24% to 25%.
Housing
Scotts Miracle Gro - $SMG
“Consumer purchases, in units, were up 3 percent in the quarter against a 40 percent growth comparison a year earlier, and POS dollars increased 9 percent in the quarter,” Miller said. “Retail inventory levels are appropriate for this time of the year, and we remain optimistic about the potential for the segment as we prepare for the upcoming lawn and garden season.”
U.S. Consumer segment sales in the first quarter are expected to decline less than 20 percent, which is better than the Company originally anticipated.
Kirklands - $KIRK - pre-announcement
Comparable sales for the fiscal fourth quarter through December 2021 decreased 6.4% compared to the same prior-year period. This includes a 9.5% comparable sales decrease for November 2021 and a 3.3% decrease for December 2021, both compared to the same prior-year period.
“After closing out the month of December, our comparable sales are in-line with the revised expectations we discussed on our last quarterly earnings report,” -CEO
MillerKnoll - $MLKN
Second quarter consolidated net sales were $1.0 billion, reflecting an increase of 63.9% on a reported basis and 11.1% organically compared to prior year. Orders in the quarter of $1.2 billion were 83.9% higher than the prior year. Notably, order levels were up over prior year across all four reporting segments. On an organic basis, orders of $795.7 million reflected sequential improvement of 6.4% compared to the first quarter, and were up 26.4% over the prior year.
Strong Demand Environment: During the second quarter, we saw continued improvement in the demand environment in each of our other segments- Americas Contract, International Contract and Knoll.
Americas Contract sales of $361.5 million increased 4.1% over the prior year. Business fundamentals in the Americas reflect continued improvement in the demand environment as organizations accelerated their return to the workplace. Order entry levels of $407.2 million were strong across all regions and sectors and were 29.3% higher than the prior year.
The Americas segment felt the impact of supply chain and internal manufacturing capacity disruptions in the quarter, which impacted our ability to ship orders in the period. Our teams are actively working on initiatives to help mitigate these pressures, but we do expect them to remain a factor in our operations in the second half of the fiscal year.
Our ability to ship orders this quarter was impacted by the supply chain disruptions that our industry is facing, which we estimate adversely impacted net sales by approximately $50 million in the quarter. Orders in the quarter of $1.16 billion were 84% higher than last year; and on an organic basis, orders of $796 million reflected sequential improvement of 6% compared to the first quarter and were up 26% over the prior year. As mentioned earlier, the strong demand was seen across all reporting segments. Global Retail had another strong quarter with orders up almost 21% over the prior year and sales growth of approximately 18%. The Americas Contract segment saw strong demand in all regions and sectors with notable momentum in the middle and southern regions of the U.S. -CFO
I think our expectation, just based on conversations with customers, what we're hearing from design firms, folks are busy. And a lot of companies are still kind of formulating their plans for return to office as we move into even mid-calendar '22. So I think our expectations right now are for continued momentum on the order front.
Bed Bath and Beyond - $BBBY
Comparable Sales decline of (7)% versus Q3 2020 and a decline of (4)% versus Q3 2019
◦Bed Bath & Beyond banner Comparable Sales decline of (10)%; buybuy BABY banner growth of mid-teens percentage
◦Comparable Sales improved sequentially within the quarter, particularly for the Bed Bath & Beyond banner
•Calendar November Comparable Sales Growth of low-single digit in US Stores, Flat in Total US (including digital)
◦Thanksgiving thru Cyber-Monday Comparable Sales growth of high-single digit
On a Comparable Sales basis, the Company expects a high-single digit decline compared to the prior year period [for February quarter].
After our previously announced slower start to sales in September and October, we drove a change in trends by November with our comp decline improving, particularly in stores. However, overall sales were pressured despite customer demand due to the lack of availability with replenishment inventory and supply chain stresses that had an estimated $100 million, or mid-single digit, impact on the quarter and an even higher impact in December. -CEO
Helen of Troy - $HELE
“We are pleased with our results for the third quarter, delivering Core net sales growth and Core adjusted diluted EPS growth on top of 37.1% and 21.1%, respectively, in the prior year period. All three business segments exceeded our expectations. These results are the primary driver allowing us to raise our top and bottom-line outlook for the full fiscal year. Strong consumer and retailer demand drove sales for Housewares and Beauty, with both segments growing double digits on a Core basis over major double-digit sales increases in the third quarter of last fiscal year. Health & Home declined in the quarter, but performed above our expectations due to stronger than expected demand and faster-than-expected progress reworking certain products impacted by the EPA matter. Despite the impact of inflation and the EPA matter, our Core adjusted diluted EPS grew 3.0%.” -CEO
FreddieMac - $FMCC
Redfin - $RDFN
Odds and Ends
Interactive Brokers - $IBKR - December results
Scotts MiracleGro -$SMG - Cannabis and supply chain
Separately, ScottsMiracle-Gro said it is maintaining its full-year company-wide outlook for adjusted earnings per share despite a greater-than-expected decline in Hawthorne sales for the fiscal first quarter, which ended January 1. First quarter sales in Hawthorne are expected to decline approximately 40 percent caused by a slowdown in the cannabis market as well as supply chain disruptions that have delayed the sale of certain product lines.
“We are optimistic the supply chain disruptions we’ve experienced will be corrected by the end of January and we’ll be able to meet the continued demand we’re seeing for our industry-leading signature products,” said Cory Miller, chief financial officer. “We’re also encouraged by the year-over-year increase we’ve been experiencing in pre-orders for growing media products for delivery to commercial growers in the second and third quarters. However, the decline we’ve seen in the first quarter, against a 71 percent growth comparison a year ago, is greater than we had anticipated.
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