美股零售行业2019年q1美国百货商店与专业软线预览

1、North America Equity Research10 May 2019Dept Stores / Specialty SoftlinesBoss' 1Q EPS Preview: Fieldwork, Bodies Buried & Buy-Side BarsInto 1Q earnings kicking off next week across our Department Stores & Specialty Softlines space we thought value-add to lay-out (1) notable upside and do

2、wnside top- line outliers (vs. Street Consensus) by our latest fieldwork, (2) margin implications incorporating findings from our proprietary promotion tracker, (3) buy-side bars by sub-sector, and (4) latest sentiment (bodies buried) based on regional marketing and incoming call volume. Circling ba

3、ck to our mid-April Retail Round-Up - we expect management conference call rhetoric on the consumer to broadly reflect “Underlying Firm Footing (ex weather)” albeit acknowledging tax reform tailwinds in FY18 and closely monitoring a potential back-half bifurcation between the low/middle income (posi

4、tive) and aspirational/high-end customer (negative). How We Would Position By Sub-Sector: (1) Overweight Defensive Growth (& Disruption Beneficiaries): Off-Price, Dollar Stores & Discounters, (2) Overweight Global Brands: Apparel/Footwear & Athletic, (3) Underweight Mall- Based Departmen

5、t Stores & Specialty Retail.Retailing Department Stores & Specialty SoftlinesMatthew R. Boss, CPA AC(1-212) 622-2630matthew bossBloomberg JPMA BOSS <GO>Steven Zaccone, CFA(1-212) 622-8996steven.zacconeGrace Smalley(1-212) 622-4894grace.smalleyElliott Simon, CFA(1-212) 622-9147elliott.m

6、.simonJ.P. Morgan Securities LLCWhere Are the Bodies Buried in Dept Stores & Specialty Softlines? Based on incoming investor call volume:···Highest Current Controversy: FL, KSS, CPRI, GPS, UAA Most Positive Sentiment: TJX, LULU, RL, NKE, AEO Most Negative Sentiment: JWN, M, URBN,

7、PVH, TIFWhere We Stand on 1Q Comps Versus Street Consensus:··Potential Upside: TJX, LULU, FL, BOOT, AEOPotential Downside: GPS, JWN, JCP, DDS, KSSEquity Ratings and Price TargetsMkt Cap ($ mn) Rating Price TargetCompanyTickerPrice ($)CurPrevCurEnd Date Dec-19PrevEnd Date n/cAbercrombie &am

8、p; Fitch American Eagle Outfitters Boot BarnBurlington Stores Dillard's, Inc.Foot LockerJ.C. Penney Co., Inc. Kohl's Corp.L Brands, Inc lululemon athletica inc. Macy's, Inc.Nordstrom, Inc. Ross Stores The Gap, Inc. TJX Companies Urban OutfittersUnder Armour, Inc.ANF US AEO US BOOT US BUR

9、L US DDS US FL US JCP US KSS US LB US LULU US M US JWN US ROST US GPS US TJX US URBN US UAA US1,975.844,046.84829.4311,484.191,857.687,478.40390.4016,186.606,900.2423,551.257,082.406,742.1237,404.249,817.1468,157.133,100.269,862.2728.4622.4529.06166.5167.2156.871.2868.3724.25173.7122.7039.8097.0124.

10、9853.8428.2522.12N N OW OW UW N UW OW N OW N UW OW UW OW NNn/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c32.0024.0033.00174.0057.0065.0084.0024.00197.0026.0040.0097.0024.0058.0029.0023.0027.0022.0028.00n/c n/c 70.00n/c n/c n/c n/c n/c 42.00n/c 28.00n/c n/c 22.00Dec-19 Dec-19 Dec

11、-19 Dec-19 Dec-19Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/cSource: Company data, Bloomberg, J.P. Morgan estimates. n/c = no change. All prices as of 09 May 19.See page 46 for analyst certification and important

12、 disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware thatthe firm may have aof interest that could affect the objectivity of this report. Investors should consider this report as only a singlefactor in making th

13、eir investment decision.获取报告1、2、3、每周群内7+报告；当日华尔街日报、4、行研报告均为公开利归原作者所有，起点财经仅分发做内部学习。扫一扫关注 回复：加入“起点财经”群。Mat hew R. Boss, CPA (1-212) 622-2630mat hew.bossNorth America Equity Research10 May 2019The Boss 1Q Preview & Fieldwork:Department Stores: Buy-Side SSS Bars into the 1Q Prints: M: -0.5%, KSS: -1

14、%, JCP: -4%, JWN: Flat (w/ Rack +4%), and DDS: +1%.·M (Neutral / $26 PT): Ming 1Q EPS of $0.35 (vs. Street at $0.33) based on flatsame-store-sales (below Street at +0.3%) representing a -230bps sequential 2-year stacked deceleration (& -480bps on 3-year basis) and low-end of 0-1% annual gui

15、de. Importantly - our fieldwork points to a softer February to start the quarter (weather/refunds) with a slightly above-plan March offset by below- plan 2H April trends particularly in womens apparel (post RRU mgmtbreakfast) to close the quarter. Moving down the P/L we mgross margincontraction of 7

16、5bps (1H pressure > 2H pressure) and 56bps of SG&A deleverage (w/ improvement as the year progresses). A key point reiterated by management at our 4/11 Retail Round-Up was elevated 1Q gross margin pressure givenclearance of Spring transition receipts (ming down 75bps YOY) withinventory planne

17、d to exit 1Q in a “better” position (relative to 4Q) noting continued gross margin drag in 2Q albeit moderating in magnitude with 2HGPM expected to be down slightly YOY (ming down 15bps YOY in 2H). Onthe larger picture backdrop (& theme we expect to hear broadly), CEO Gennette commented that the

18、 consumer remains on “solid footing”, but 2019 is not expected to be at the pace of 2018 with tax reform tailwinds in the rear view (see 4/15 - Boss' Retail Round Up: Key Management Takeaways). On the call, we expect an update on managements 5 key FY19 initiatives (destination categories, vendor

19、 direct, Growth150, backstage, and mobile) targeted at narrowing narrow the delta versus industry growth, which stood at 200bps in FY18 (industry +4% > M +2%) down from 450bps in FY17 (industry +2.5% > M down -2%) with additional “Fund the Future” multi-year cost savings to be outlined by year

20、-end. Looking ahead, we areming 2Q EPS of $0.54 based on +0.5% same-store-sales and FY19 EPS of$3.13 (vs. $3.05-$3.25 guide).·KSS (Overweight / $84 PT): Ming 1Q same-store-sales of -1.0% equating to1Q EPS of $0.60 (below the Street at $0.68). On cadence, the combination of “below-plan” February

21、 comps and unfavorably cold weather particularly in the Midwest (and Northeast) including 2 weekends of snow in the second half of April weighed on the magnitude of March-April improvement (relative toFebruary) by our work. On margins we are ming 10bps gross margincontraction with recent store work

22、pointing to inventory well managed exiting 1Q(vs. -2% per store exiting 4Q) with markdown/clearance levels controlled mingwith our +1.75% SG&A dollar build reflecting 1H weighted investments (ex 2HAMZN partnership launch). Looking ahead, our mstands at $6.10 based on+1.0% same-store-sales with m

23、anagement outlining 5+ 2H19 top-line catalysts on our recent European roadshow consisting of active expansion to 160 doors, Nine West launch (footwear/accessories + apparel exclusive), EVRI plus-size private label launch, Property Brothers exclusive home line launch, and Elizabeth & James brand

24、launch with nationwide launch of the AMZN partnership slated for July (see 4/22 - Boss' Retail Round Up and Europe Roadshow: Key Management Takeaways and 4/23 - AMZN Partnership Mgmt Takes).·JCP (Underweight): Lowering our 1Q same-store-sales estimate to -5.5% (below the Street at -3.9%) eq

25、uating to a 1Q EPS loss of $0.38 (Street at -$0.37). Importantly, our work points to below-plan top-line trends consistently2Mat hew R. Boss, CPA (1-212) 622-2630mat hew.bossNorth America Equity Research10 May 2019throughout 1Q with aggregate March/April same-store-sales improving versus Februarys t

26、rough (albeit below internal recapture plan) noting appliance clearance activity served as a slight benefit in the quarter. Moving down the P/L- we are ming gross margin down 40bps despite lapping a 239bps shortfall ayear ago with continued clearance activity capping opportufor upside thisquarter by

27、 our work. Looking ahead, we are lowering our 2Q comp to -6% reflecting a 200bps headwind from the exit of appliance sales equating to EPS of -$0.34 (vs. Street at -$0.27). We lower our FY19 EPS to -$0.95 (vs. Street at -$0.75) based on -4.3% comps and +100bps gross margin expansion with CEO Soltau&

28、#39;s assortment influence not material until Back-to-School.·DDS (Underweight / $57 PT): Lowering our 1Q same-store-sales estimate to +1% equating to 1Q EPS of $2.74 based on 60bps of gross margin contraction and +1.9% SG&A dollar growth. Importantly, our recent work points to a continued

29、build of apparel inventory (particularly on the womens side) with inventory per square foot exiting FY18 up 4.9% (= 460bps above adjusted sales growth) pointing to elevated 2Q19 gross margin risk with the Service Charge & Other line item worth watching (vs. -$3.2M decline the past 4 quarters ona

30、verage). Looking ahead, we are ming a 68 cent loss in 2Q (vs. Street at 53 centloss) with comparisons accelerating next three 770bps sequentially from -2.0% in 1Q to +5.7% by 4Q and elevated gross margin risk (i.e. timing of markdowns) with incremental potential downside risk to our m on the Service

31、 Charge & Other line estimating a 2.4% decline in FY19 (vs. -7.8% in FY18 / 55% of DDS Operating Income).·JWN (Underweight / Lower PT to $40): We lower our 1Q same-store-sales to - 0.5% (below the Street at +0.5%) equating to EPS of $0.41 (below the Street at$0.46). Specifically, we are min

32、g Full-line comps down -3.0% (w/ B&Mtraffic the sequential shortfall by our work) and +4.0% at the Rack with elevated inventory exiting 1Q across both channels by our recent work (noting our recent field checks point to building womens apparel inventory at Rack). Laterally, recent commentary at

33、the higher-end (TIF at our Retail Roundup conference, Kering, LOreal, and Neiman Marcus) points to choppy trends with the combination of 34% SALT state exposure, softer tourist trends on the coasts, and SPX volatility representing potential 2H19 headwinds. Moving down the P/L, ourmreflects a 22% EBI

34、T dollar decline in 1Q with 50bps of gross margincontraction and 66bps of SG&A deleverage. Looking ahead we are ming 2QEPS of $0.95 (< Street at $0.99) based on +0.1% same-store-sales lowering our FY19 EPS to $3.70 (vs. $3.65-$3.90 guidance).The Off-Price Based on incoming call volume - The B

35、uy-Side SSS Barsinto the 1Q Prints: TJX: +5%, ROST: +2-3%, and BURL +0.5%.· TJX (Overweight / $58 PT): Raising our 2Q same-store-sales to +5.2% (above the Street at +2.9% and +2-3% guidance) and EPS to $0.57 (vs. $0.53-$0.54 guide) embedding 78bps of gross margin contraction (supply chain -60bp

36、s from freight & new DC costs from HomeGoods & Marmaxx & FX) and 23bps of SG&A deleverage (lapping one-time lease buyout benefit from Canada LY). Specifically,our mpoints to +6% Marmaxx comps (> guide 3-4%) with our fieldworkpointing to trends exceeding plan consistently throughou

37、t the quarter (noting “solid start” commentary on 2/27) and +5% HomeGoods same-store-sales.3Mat hew R. Boss, CPA (1-212) 622-2630mat hew.bossNorth America Equity Research10 May 2019Looking ahead we are ming 2Q EPS of $0.65 (> Street at $0.62) based on+3.6% comps raising our FY19 EPS to $2.63 (vs.

38、 $2.55-2.60 guide).·ROST (Overweight / $97 PT): Ming 1Q same-store-sales of +2% (vs. Street at+2%) equating to $1.11 EPS (vs. $1.05-$1.11 guide). Specifically, mgmt.s Flat to+2% guide on 3/5 incorporated ladies apparel underperformance given higher 1Q category penetration (relative to 4Q) with

39、our fieldwork pointing to March/April improvement relative to February despite unfavorable weather.On the margin front, we are mgross margin down -85bps YOY inclusive of flatmerchandise margin, freight -30bps, and -45bps from higher distribution costs asROST anniversaries a +45bps benefit from packa

40、way in 1Q18 ming SG&Adeleverage of 50bps including 32bps of pressure from wage investment. Looking ahead, we lower our 2Q EPS to $1.12 (below the Street at $1.14) based on +3% same-store-sales with management citing continued wage investment pressurethrough 1H19 (ming 30bps impact to 2Q SG&A

41、).·BURL (Overweight / $174 PT): Ming 1Q same-store-sales of +0.5% or at thehigh end of mgmt.'s 4/23 updated guide of Flat to +0.5% with our math pointing to down mid-single-digits in February improving to Mar/Apr up low-single-digits. WemEPS of $1.25 or at the high-end of mgmt.'s 4/23 u

42、pdated guide for $1.21-1.25w/ gross margin down 10bps (merchandise margin +15bps offset by freight -25bps) and SG&A deleverage of 57bps. Looking ahead, we see mgmt. guiding 2Q SSS (& 2H19) back to +2-3% with inventory expected to exit 2Q down mid-single- digits equating to $1.16 EPS (vs. Str

43、eet at $1.15). Please see our detailed recap of BURLs CEO announcement and 1Q pre-announcement - Bench Bolstered For the Next Leg; 1Q In Rear-View w/ 2Q-4Q On Track.Sizing Up Specialty Softlines - Based on incoming call volume - The Buy-Side SSS Bars into the 1Q Prints: GPS: -2% Consolidated (ON: -1

44、-2%, Core Gap: -4-5%); URBN: -1%; ANF: +2-3%; LB -1%; AEO: +3-4%, and BOOT +7%.·GPS (Underweight / Lower PT to $24): Lowering 1Q same-store-sales to negative 3.0% (< Street -1.1%) w/ Old Navy -2%, core Gap -5%, and BR -2% lowering our 1Q EPS to $0.25 (< Street $0.32). Notably, our fieldwo

45、rk points to softness at ON in Feb/1H Mar driven by unfavorable weather and elevated category penetration of underperforming womens dresses (w/ improvement not expected until 2H19) with 2H March/April trends showing aggregate improvement (relative to February) albeit below managements plan in our vi

46、ew and driven by elevated clearance sales at both brands. Moving down the P/L, we lower our 1Q gross margin to -135bps YoY contraction comprised of 70bps ROD deleverage on negative same-store-sales and -60bps merchandise margin decline (= 240bps two-year stacked decline) driven by elevated promotion

47、al activity with our store work and promotional tracker flagging incremental use of extra discounting on clearance (i.e. extra 50% off) at OldNavy in April to close the quarter. Looking forward, we are ming 1H19 EPSdown 22% YOY (below managements “high-teens decline” guide) with our FY19 EPS set at

48、$2.36 (below the Street at $2.49 & $2.40-$2.55 guide). Digging Deeper: a key risk added to GPSs 10K filed on 3/19 “the separation will be time- consuming and involve significant costs and expenses, which may be significantly higher than what we currently expect" highlights building dis-syne

49、rgy risk (vs. initial low-single-digit expectations) in our view (see 4/18 Key Takes From Management Q&A Session On The Upcoming Separation). Lower our PT to $24 based on 5.0x our FY19 EBITDA.4Mat hew R. Boss, CPA (1-212) 622-2630mat hew.bossNorth America Equity Research10 May 2019·AEO (Neu

50、tral / Raise PT to $24): Ming 1Q EPS of $0.23 (above mgmts$0.19-$0.21 guide) based on +4% SSS (vs. guide of low-single-digits provided on 3/6) comprised of +1% AEO brand comps and Aerie +20%. Importantly, our fieldwork points to March/April outperformance versus mall peers led by continued strength

51、in denim and at aerie with promotions relatively consistent YoY (and recent brick/mortar work flagging a lower breadth of store clearanceactivity YoY). Moving down the P/L, we m32bps of EBIT margin contractionbased on 3bps of gross margin contraction (vs. guide flat to down slightly) on 35bps mercha

52、ndise margin expansion w/ 30bps SG&A deleverage on 7.5% $ growth.Looking ahead, we m2Q EPS of $0.37 (> Street $0.35) based on +4% SSS (or+80bps sequential acceleration in the two-year stack), +20bps gross margin expansion, and 10bps SG&A leverage noting mgmt. cited on 3/6 that 2Q will mar

53、k the start of "operating margin improvement primarily driven by SG&A leverage”. Raising our Dec 19 price target to $24.·URBN (Neutral / $29 PT): Ming 1Q EPS of $0.26 (matching the Street) basedon -1% same-store-sales (< Street -0.8%) comprised of Core UO -1%, Anthro -2%, and FP +4%

54、. Importantly, our fieldwork pointed to challenging trends in Feb/Early March driven by unfavorable weather and Spring transitional floorsets with notable underlying improvement in 2H March and April(excluding the Easter shift impact) by our work. Our 1Q membeds grossmargin -145bps YoY (vs. guide -1

55、50bps YoY) with merchandise margins down - 115bps (noting our promotion tracker showed an incremental Anthro promo of 20%off dresses/skirts in April week 1) ming SG&A $ growth of +3% YoY (in-linew/ mgmt. guide of +3%). Looking forward, we m2Q EPS of $0.76 (< Street$0.81) with SSS +0.5% noting

56、 a +120bps sequentially tougher multi-year compare, gross margin -30bps YoY, and SG&A +5% YoY (70bps deleverage) noting mgmt cited a return to positive SSS would equate to higher SG&A spend of +5% YoY.·ANF (Neutral / Raise PT to $32): Ming 1Q EPS loss of $0.39 (vs. Street lossof $0.44)

57、based on +1.8% same-store-sales (vs. mgmt. 3/6 guide of Flat to +2%) comprised of -1.5% at core A&F and +4% at Hollister. Moving down the P/L, wemgross margin +15bps YoY (vs. guide up slightly), and SG&A leverage of126bps given opex $s +0.6% YoY (vs. guide Flat YoY). Our fieldwork and promotion tracker showed slightly elevated promotional activity at A&F given softer trends in womens tops with Hollister promotional activity consistent YoY and inventory levels exiting 1Q well controlled by our work. Looking ahead we m2