Facts from the Week: Nov 27, 2021
Highlights from $MA $JPM $BBY $DKS $JWN $VCP.L $GOOGL
Consumer spending remains strong with Mastercard estimating Black Friday sales up 12% vs last year and JP Morgan Chase spending up 22% vs two years ago
In travel, TSA Checkpoint passengers are down 9% vs2019 for the trailing 7 days to 11/26
Best Buy notes organized retail crime is pervasive and impacting their financial results
Victoria PLC notes artificial grass is possibly the fastest growing flooring segment in Europe
Mastercard - $MA
JP Morgan Consumer Spending - $JPM
Best Buy - $BBY
I think you've probably seen in the media that across retail, we are definitely seeing more and more, particularly, organized retail crime and incidence of shrink in our locations. And I think you've heard other retailers talk about it and we certainly have seen it as well. I want to start with, our priority has always been and will remain the safety of our people, whether that's the pandemic, whether that is unruly customers, whether that is outright theft, which is a great deal of what we're seeing right now. And this is a real issue that hurts and scares real people.
We are doing a number of things to protect our people and our customers. As we talked about in the prepared remarks, we are finding ways where we can lock up product, but still make that a good customer experience. In some instances, we're hiring security. We're working with our vendors on creative ways we can stage the product. We're working with trade organizations. But you can see that pressure in our financials. And more importantly, frankly, you can see that pressure with our associates. This is traumatizing for our associates and is unacceptable. We are doing everything we can to try to create as safe as possible environments. -CFO
Dicks - $DKS
During the quarter, our brick-and-mortar stores comped up approximately 15% versus last year and delivered a 31% sales increase when compared to 2019. Importantly, our stores continue to be the hub of our omnichannel strategy, enabling over 90% of our total sales and fulfilling approximately 70% of our online sales in Q3.
Our strong comps were driven by growth across each of our 3 primary categories of hardlines, apparel and footwear as well as an 8.5% increase in transaction and a 3.7% increase in average ticket.
While still early, Q4 is off to a strong start. Taking this into account, along with our significant Q3 results and expectation of a continued strong consumer demand and our confidence in our ability to navigate the global supply chain challenges, we are raising our consolidated same-store sales guidance and now expect the full year comp sales to increase by 24% to 25% compared to our prior expectation of up 18% to 20%. This is on top of 9.9% increase in consolidated same-store sales last year and a 3.7% increase in 2019. At the midpoint, our updated comp sales guidance represents a 39% sales increase versus 2019 compared to our prior expectation of up 33%
Nordstrom - $JWN
I'd like to provide a bit of color on our fourth quarter forecast compared to 2019. For the fourth quarter, we are forecasting significant gross margin improvement versus the fourth quarter of 2019, reflecting the benefits of lower promotional activity and higher regular price sell-through this year. We expect that SG&A pressures primarily related to fulfillment and labor costs will continue in Q4, resulting in SG&A deleverage similar to what we experienced this quarter after excluding an impairment charge that we recorded in the fourth quarter of 2019. -CFO
Victoria PLC - $VCP.L
Artificial landscaping grass (which is entirely different to artificial sports fields) is possibly the fastest growing flooring category in Europe, with growing consumer acceptance of artificial grass due to enhanced realism and increasing awareness of its advantages when compared with natural grass, such as limited maintenance and no water requirements. European demand for artificial grass is expected to achieve double-digit growth from 82.4 million m2 in 2020 to 110.6 million m2 in 2023 (10.3% p.a. in volumes) AMI Consulting (2020).
The strong demand for flooring experienced this year has primarily come from existing home owners, motivated by spending more time in their homes, deciding to redecorate. However, the Board expects demand to continue next year and beyond, due to the high level of housing transactions that has been experienced in many of the Group's key markets this year. Housing sales are a good 12-18 month leading indicator of remodelling-led demand for flooring.
High savings rates - particularly of consumers that form Victoria's target market - are underpinning the demand for flooring and consequently, despite selling price increases, consumers are continuing to prioritise redecorating their home.
TSA Checkpoint - trailing 7 days down 9% vs 2019
ARC Travel Demand Data
Nordstrom - $JWN
We saw signs of travel returning with sunglasses and swimwear posting double-digit increases over 2019. We are also encouraged with the sequential trend improvement in occasion-based categories during the third quarter, a promising signal that customers are beginning to return to social and work events. Dresses, men's suiting and dress shirts, dress shoes and makeup all showed sequential improvement during the third quarter, and we are closing the gap to '19 sales levels.
Odds and Ends
CNN Fear and Greed Index
US Federal Reserve Balance Sheet
Thanks for reading and have a great weekend!