June 1, 2021
AggData's Sister Company Creditntell Launches Version 3.0 of its Retail and Real Estate Intelligence Platform
Mobile Data Analytics Platform Provides Enhanced Visibility into Market Dynamics and Consumer Shopping Behaviors
Industry-leading retail consulting and data analytics firm Information Clearinghouse, Inc., through its Creditntell division, has announced the successful launch of version 3.0 of its Retail and Real Estate Intelligence (REI) platform, a Big Data analytics tool providing unparalleled insights into consumer traffic and shopping patterns.
Click here to request a copy of the full press release.
Last week, Gap announced it has partnered with Walmart to launch Gap Home, a collection of more than 400 Gap-branded home decor, bedding, tabletop and bath items, which will be sold exclusively on Walmart.com beginning June 24. Last May, Gap announced a deal with global licensing company IMG to expand the Gap brand beyond apparel to other categories like home decor, baby equipment, and furniture to grow its share and attract new customers. Click here to request more information.
On May 26, Amazon announced it entered into a definitive merger agreement to acquire MGM Studios, for $8.45 billion to boost its Prime Video service. The deal is subject to regulatory approvals and other customary closing conditions. MGM has a vast catalog of more than 4,000 films.
In other news, Amazon will reportedly hold its Prime Day 2021 on June 21 and 22.
Meanwhile, two new class-action lawsuits have been filed against Amazon, alleging that its Marketplace platform harms competition by penalizing merchants who sell products on other platforms for lower prices than on Amazon. The suits were filed last week on behalf of proposed classes of tens of millions of consumers who have purchased merchandise on Amazon. The Company has previously rebutted claims that its Marketplace policies inflate prices. The suits follow a similar one filed last week against Amazon by the Washington, DC, attorney general; attorneys general from five states and the FTC are reportedly exploring antitrust cases against Amazon. Click here for a list of Amazon future store openings.
Big Lots’ 1Q sales rose 13% to $1.63 billion, driven by comp growth of 11.3% and sales growth from new and relocated stores. Online sales surged 30%. Big Lots saw double-digit growth across all merchandise categories other than Food and Consumables, which were substantially bolstered last year by quarantine-related stock-up early in the pandemic. The Company also saw growth in its Seasonal assortment, particularly lawn and garden, while Broyhill, launched just last year, drove $225 million in sales across its Furniture and Home assortments (Big Lots bought the Broyhill brand and related trademarks in 2019). Better-than-expected growth came despite “significant supply chain and freight headwinds.” Big Lots expects to open 50 – 60 stores in 2021, while also closing some underperforming locations, for a net new store increase of 21.
For 2Q21, its expects EPS of $1.00 – $1.15, based on a low double-digit comp decline, which equates to a two-year stacked comp increase of around 20%. Click here to request a list of store openings and closings.
Dollar General’s 1Q21 sales and comps fell 0.6% and 4.6%, respectively, as the Company lapped last year’s strong COVID-driven sales; 1Q20 sales and comps were up significantly, 28% and 22%, respectively. On a two-year stacked basis, comps are up 17%. The sales decrease was driven by a decline in consumables, the Company’s largest category. Traffic slowed, while average ticket increased. Despite the top-line fall off, gross margin jumped 210 bps on higher markups and a shift to more non-consumables.
During the quarter, the Company opened 260 new stores, remodeled 543 stores, and relocated 33 stores. Capital expenditures for FY21, including costs related to investments in strategic initiatives, are projected to be in the range of $1.05 billion to $1.15 billion and consist of 1,050 new store openings, 1,750 store remodels, and 100 store relocations.
During the Company’s 1Q conference call, COO Jeff Owen said that Dollar General expects to self-distribute frozen and refrigerated products chain-wide through its DG Fresh initiative by the end of 2Q21, ahead of its earlier goal of expanding the program to all of its stores by the end of the fiscal year. Click here to request a list of future store openings and closings.
PCC Community Markets has begun rolling out self-checkout kiosks across its stores, with the installations expected to be completed by the end of this summer. The cash-free kiosks will accept all forms of contactless electronic payment. PCC operates 15 stores in the Puget Sound area of Washington State.
Save-A-Lot announced the sale of five Company-operated stores in the Washington, DC market to AQS Foods LLC, part of plan to convert corporate-owned stores to local operations. The stores, located in Temple Hills, Forestville, Bladensburg, Oxon Hill, and Seat Pleasant, MD, will be completely remodeled within the next year. After a couple of transactions previously announced, consisting of 12 deals for a total of 132 stores completed to that point, that still leaves about 165 stores remaining to be relicensed; the Company previously indicated it expects to complete these transactions by the end of calendar 2021. Click here to request a list of future store openings .
Our Hot Market Report takes a closer look at the Washington D.C. real estate landscape, and provides visual competitive analyses as well as key real estate metrics such as future openings, store count, market share, digital insights, and demographics. Click here to request a copy of the full report.
Nordstrom's 1Q21 sales surged 44% year over year but declined 13% compared to 1Q19. Nordstrom brand 1Q21 sales increased 37% but decreased 13% compared to 1Q19, while Nordstrom Rack sales rose 59% and also fell 13% compared to 1Q19. Digital sales increased 23% and represented 46% of total sales compared to 54% in 1Q20. Gross margin advanced 2,000 bps, primarily due to lower markdowns and leverage from the higher sales. The sales and gross margin increase and lower expenses lifted quarterly EBITDA back into positive territory at $57 million. Inventory levels decreased 2%; the change in inventory levels includes an approximately 700-basis-point impact resulting from the acceleration of vendor shipments to support sales trends and mitigate potential supply chain backlogs in 2Q. Debt decreased 13% to $3.55 billion due to lower revolver borrowings. Nordstrom ended the year with liquidity of $977 million, including $377 million of cash.
The Company reaffirmed it FY21 outlook, which assumes stores remain open for the entire year. Revenue is expected to increase more than 25%, with digital accounting for roughly 50% of sales. EBIT margin is expected to be about 3% of sales, with 1H21 operations expected to be breakeven. The Company also anticipates its leverage ratio to be approximately 3x by year-end. Click here to request a list of future store openings.
Hibbett Sports’ 1Q22 sales jumped 88% to $507 million, boosted by an 87.3% comp increase (up 51.4% compared to 1Q20), partially offset by the closing of seven stores during the year. Brick-and-mortar comps increased 113.5% in 1Q22. E-commerce sales grew just 1% and represented nearly 12% of total sales for 1Q22, down from roughly 22% in 1Q21. Record quarterly sales growth in 1Q22 reflected new customer acquisition and retention, prior-year market disruption, government stimulus, the availability of in-demand product, and improved store-level engagement, which collectively helped increase traffic and revenue per transaction. Stores were open to the public for only 60% of available days in 1Q21, which drove a significant amount of business to the online channel. Furthermore, product launches shifted exclusively to online during much of 1Q21. This year, product launches migrated more heavily back to stores, which negatively impacted e-commerce comps. E-commerce revenue was relatively flat compared to 1Q21; however, it grew over 105% compared to 1Q20. Operating income for 1Q22 improved to $110 million, from negative $22 million in 1Q21, and operating margin improved to 22% from negative 8% in 1Q21. The improved gross margin was driven by higher sell-through, a low promotional environment, a mix shift away from e-commerce sales (which carry lower margins due to incremental fulfillment costs), leverage of store occupancy expenses, and a decline in inventory valuation reserve charges. In 1Q21, incremental inventory valuation charges were recorded due to uncertainty brought about by the pandemic. Improved SG&A margin reflected the leveraging impact of the higher sales base. Management raised its FY22 guidance and now expects a high-single digit to low-double digit comp increase. Hibbett’s board also authorized the expansion of its existing share repurchase program by $500 million to a total of $800 million, with an extension until February 1, 2025. The original $300 million authorization was scheduled to expire on January 29, 2022. As of May 26, 2021, the Company had purchased nearly 7.5 million shares of its common stock, for a cost of $201 million. Click here to request a list of future store openings.
Best Buy reported better-than-expected results, with 1Q22 consolidated revenue up 36% to $11.60 billion, primarily driven by comp growth of more than 37% (compared to an estimate of 20%), partially offset by the permanent closure of 81 stores in the past year. Revenue increased 27% compared to 1Q20 (management did not provide a comparison of comps to 1Q20). 1Q22 comps improved across almost all categories; the largest drivers were home theater, computing and appliances. Domestic online revenue totaled $3.60 billion, up 7.6% on a comp basis, primarily due to higher average order values and increased traffic. Online revenue was 33.2% of total domestic revenue, down from 42.2% last year, but up 15% from two years ago. About 60% of online revenue was picked up in a store or picked up curbside, shipped from a store, or delivered by a store employee. 1Q22 operating income more than tripled to $769 million, and operating margin was up 390 bps. Gross margin increased, driven by improved product margin rates, including reduced promotions, and lower supply chain costs, partially offset by higher installation and delivery costs. SG&A margin improvement reflected the leveraging impact of the higher revenue base.
Management is testing different store prototypes, including 15,000, 25,000 and 35,000 square-foot units, a new outlet store, and even smaller 5,000 square foot stores. Average store size is currently 36,000 square feet.
CEO Corie Barry also spoke about how Best Buy is rethinking the role of its store employees, after the huge pandemic-fueled growth in fulfillment services like curbside pickup. The Company is testing reformatting its stores to fulfill more online orders, using store employees to deliver same-day orders, and “upskilling and reskilling” store employees to help more with specialized customer services, such as home theater setups, virtual consultations, and in-home tech advisory services.
Finally, the Company’s board authorized the payment of a regular quarterly cash dividend of $0.70 per share, representing a total consideration of $175 million, payable on July 8 to shareholders of record as of the close of business on June 17. Click here to request a list of future store openings.
Gap’s 1Q21 sales and comps accelerated from last year and two years ago, reflecting the strength in its digital business (40% of 1Q21 sales), Athleta (9% of 1Q21 sales), and Old Navy (57% of 1Q21 sales). Compared to 1Q20 and 1Q19 by banner, Old Navy comps accelerated 35% and 25%, respectively; Gap comps were up 29% and down 1%, respectively; Banana Republic comps fell 4% and 22%, respectively; and Athleta comps advanced 27% and 44%, respectively. Comps outpaced sales growth, as the latter was adversely impacted by more than 650 net store closures in the last 24 months. Still, this quarter delivered improved margins, with gross margin of 40.8% and operating margin of 7.4%; while merchandise margins expanded due to lower discounting, and shipping costs worsened 200 bps; the Company is also facing supply chain challenges in Southeast Asia, and had greater in-transit inventory.
Red Robin reported results for 1Q21 ended April 18. Consolidated sales grew 6.6% to $326.3 million, driven by 10% comp growth, though comps were still down 12.8% compared to pre-COVID 1Q19 sales. Management indicated that about 55% of Company-owned restaurants had reached positive comps on a two-year basis by the end of 1Q, which is likely to improve as dine-in restrictions continue to ease and wider distribution of vaccines leads to increased transactions. Three Company-owned restaurants closed during 1Q, but all remaining Company-owned restaurants that are open are providing dine-in service at an average capacity of 65%. Off-premise sales represented 41.7% of 1Q21 total sales, compared to 26.3% in the prior-year period.Click here to request a list of future store openings.
On May 25, Hy-Vee opened a new 77,000 square-foot store in Spring Lake Park, MN. The store includes co-located brands such as DSW footwear and Joe Fresh clothing. Hy-Vee will open another unit in Maplewood, MN later this month and will unveil a new flagship store in Grimes, IA, in September. Click here to request a list of future store openings.
Costco’s string of strong quarterly results continued into the Company’s 3Q, as sales grew 22% and comps jumped 15%. Canada led the charge, with comps improving almost 17%, followed by the U.S. and International segments, up 15% and 13%, respectively. Costco continues to benefit from its investment in its digital platform, as online revenue grew 38%. The top-line growth filtered down to operating income, which improved 41%. Costco’s membership revenue has grown consistently during the pandemic and grew 11% during the quarter. The Company added five new clubs during 3Q21, with plans to add another eight in the remainder of the fiscal year. The balance sheet remains healthy, with a net cash position, and no debt maturities until 2022. Click here to request a list of future store openings.
Burlington Stores 1Q21 sales increased 35%, and comps rose 20% compared to 1Q19. Management commented that the higher sales were driven by increased traffic due to stimulus checks, vaccine rollouts, and pent-up demand. Gross margin expanded 230 bps, as fewer markdowns offset higher shipping costs. The higher sales and gross margin lifted quarterly EBITDA 75% to $293.5 million. Burlington reported negative EBITDA of $447.5 million in 1Q20. Debt decreased 10% year-over-year to $2.09 billion. The Company announced a make-whole call offer for the full $300 million outstanding under its 6.25% Senior Secured Notes due 2025, issued in April 2020. Burlington ended the quarter with $2.08 billion of liquidity including $1.53 billion of cash. Management is not issuing specific sales or earnings guidance for FY21 due to uncertainty surrounding the pace of economic recovery and the ongoing COVID-19 pandemic. Management did note that expense headwinds in supply chain and freight have continued to deteriorate results, and are likely to weigh on operating margin for the balance of the year. Burlington has resumed its aggressive expansion with 100 new stores expected to open in FY21. The Company will also be closing or relocating 25 stores. Click here to request a list of future store openings.
Dick’s Sporting Goods’ 1Q21 sales were $2.90 billion, more than double 1Q20 and a 52% increase from 1Q19. The current period sales improvement was driven by a 115% comp increase. E-commerce sales rose 14% on top of a 110% increase in 1Q20 (e-commerce penetration was 20%). Management also noted team sports bounced back during the quarter. During 4Q20, the Company incurred $13 million in incremental safety costs related to the pandemic, down from $51 million in 4Q20. Dick’s ended 1Q21 with approximately $1.86 billion in cash and no outstanding borrowings under its $1.855 billion revolving credit facility. Total inventory decreased 4% at the end of 1Q21, compared to the end of 1Q20. During 1Q21, the Company opened two stores and closed one store. Dick’s also relocated three stores. Based on the strong start to the year, management raised its guidance and now expects comps to grow 8% to 11% in FY21.
Dick’s also announced the grand opening of seven stores in June. The new locations include its second Dick’s House of Sports in Knoxville, TN, one relocated Dick’s Sporting Goods, two newly redesigned Golf Galaxy locations, and three Warehouse Sale locations. The Company is also expanding its experiential Soccer Shops in select stores in June. Click here to request a list of future store openings and closings.
The FY20 momentum continued into 1Q21 for Ollie’s Bargain Outlet, as revenue jumped 30%, and comps grew almost 19%. The Company benefited from increased consumer spending driven by the new COVID-19 stimulus money. EBITDA and operating income were up 59% and 66%, respectively.
The Company maintained its store growth; it opened 11 stores and closed two, finishing the period with 397 locations. Shortly after the end of the quarter, Ollie's opened its 400th store. Click here to request a list of future store openings.
Ulta Beauty’s 1Q21 sales accelerated more than 65% from last year and increased 11.2% from 1Q19, driven by government stimulus, eased COVID-19 restrictions, 26 net new stores over the last 12 months, and 94 net new stores over the last 24 months. Average ticket rose 8.8%, on top of 3% growth in both 1Q20 and 1Q19, though the Company is likely to face difficult year-over-year comparisons. However, average transaction growth (up 52.5% in 1Q21) is expected to more than offset ticket declines due to Ulta’s loyalty members (94% of FY20 sales) who are eager to return to stores to experiment with beauty and engage in “high-touch” categories. 1Q21 gross margin recovered to 38.9% from 25.9% in 1Q20, driven by higher sales, merchandise margin strength, lower salon expenses, and favorable channel mix shifts; sales leverage also benefited SG&A. As a result, quarterly EBITDA grew to $385 million from $900,000 in 1Q20, and EBITDA margin was almost 20%. Tomorrow, Dave Kimbell (former Ulta president) will take over as CEO, and Mary Dillon will become chairman for a period of one year.
A recent article by Crain’s Chicago Business on Ulta’s growth potential post-COVID (under forthcoming CEO Dave Kimbell) cited Creditntell analysis: “Kimbell’s marketing know-how will likely come in handy with continued loyalty program growth…. The trick will be getting new customers gained online during the pandemic to shop in stores, too. Omnichannel customers at Ulta spend three times more than those who shop through only one channel.” Click here to request a list of future store openings.
Williams-Sonoma’s differentiated product offerings and focus on sustainability, coupled with consumers’ focus on their homes, continues to drive top-line growth, with comps up more than 40%. Performance at all banners was robust, with average comps of nearly 39%. Gross margin rose 850 bps, driven by higher merchandise margins and occupancy leverage, due to a deliberate pullback in promotions, rent negotiations, and the closing of unprofitable stores. Operating expenses were higher on increased incentive compensation, but sales leverage pushed operating margin up 950 bps to 15.9%.
In connection with the release of its 1Q results, the Company raised its FY21 outlook from mid-to-high single digit revenue growth to low-double digit to mid-teen revenue growth, with year-over-year operating margin expansion. In terms of capital allocation, the majority of capex will be on technology and supply chain. Williams-Sonoma also raised its dividend 11% and authorized a new $1.00 billion share buyback program. During 1Q21, the Company opened two stores and closed five stores. Additionally, Williams-Sonoma plans to close 25% of its base over the longer term. Click here to request a list of future store openings and closings.
LL Flooring (fka Lumber Liquidators) opened its latest location in Medford, NY, the Company’s second unit on Long Island. LL Flooring also said it is offering builders, remodelers, installers, property managers, and design professionals access to project planning tools, real-time inventory levels at nearby stores, exclusive pricing, and the ability to track client projects. Based in Richmond, VA, LL Flooring operates 414 stores nationwide.
Destination XL’s (DXL) 1Q21 revenue increased 95%, and comps rose 3.7% compared to 1Q19. The comp increase was driven by a 41% increase in direct sales, partially offset by a 6.7% comp decline at stores. Wholesale contributed $3.1 million in sales and was up 22% compared to 1Q20. Gross margin expanded 2,250 bps (190 bps compared to 1Q19) due to fewer markdowns. Based on the sales and gross margin increases and lower expenses, DXL generated $13.7 million of EBITDA compared to negative EBITDA of $19 million in 1Q20 and $4.8 million of EBITDA generated in 1Q19. The Company ended the quarter with $57 million of liquidity, including $5.8 million of cash and $51.1 million of revolver availability. DXL generated $7 million of free cash flow in the quarter compared to $18.4 million of cash burn in 1Q20, primarily due to improved operating results and faster inventory turn. Debt decreased 47% year-over-year to $50 million due to lower revolver borrowings. In 1Q21, the Company closed 10 stores and currently has 155 locations with either a natural lease expiration or a kick-out option. DXL stated it intends to right-size its store portfolio through lease negotiations or lease-term expirations.
Abercrombie & Fitch’s 1Q21 sales increased 61% to $781.4 million, with digital sales up 45%, accounting for 52% of total sales. By brand, sales increased 62% at Hollister (56.6% of total sales) and 60% at Abercrombie (43.4% of total). Gross margin expanded 900 bps to 63.4%, driven by higher average unit retail on lower promotions. Compared to 1Q19, sales increased 6%, and gross margin improved 290 bps. Operating income was $57.4 million, compared to a loss of $209 million last year. During 1Q21, the Company closed its Abercrombie & Fitch flagship location in Singapore, leaving it with six flagships, down from seven at the beginning of FY21 and 15 at the beginning of FY20. The Company has 731 stores in operation, after opening four new stores and closing eight underperforming units in the quarter.
Barnes & Noble opened a new store in Kirkland, WA last week, the Company’s first Seattle-area expansion in more than a decade. The new unit marks “a dramatic change in the bookseller’s appearance,” with oak bookshelves and the local B&N team helping to curate the store’s offerings. Current CEO James Daunt, who took the reins nearly two years ago, has stated a goal to transform the Company by giving local staff more control over stores. This strategy has been successful at the Waterstones chain (private equity firm Elliott Advisors owns Waterstones and B&N), over which Mr. Daunt also presides, and he is encouraged by early results in the U.S. stores. Click here to request a list of future store openings.
Designer Brands’ 1Q net sales were up 46%, with comps up more than 52%, following a 42% comp decline in the prior-year period due to pandemic-related store closures. Compared to the pre-COVID 1Q19 period, net sales were still down almost 20%. 1Q21 gross margin improved to 30.7%, from 29.7% in 1Q19 (gross profit was negative in 1Q20) given leverage on higher sales. Overall, adjusted operating income turned positive during the quarter, at $19 million, compared to a loss of $210 million in the prior-year period. As of May 1, the Company had liquidity of $339 million, consisting of $49 million in cash and $290 million in remaining revolver availability. During the quarter, Designer Brands opened two stores and closed five in the U.S. As of May 1, the Company operated a total of 516 domestic stores and 145 stores in Canada. Looking forward, Designer Brands plans to close 65 domestic locations over the next four years, including approximately 24 in 2021.
American Eagle Outfitters’ 1Q revenue jumped 17% to just over $1 billion. Aerie was the best-performing segment, with sales surging nearly 90% to $297.5 million, while 1Q sales for the American Eagle banner increased to $728 million, from $390 million in 2020 (and $724 million in 2019). Total digital revenue rose 57%. Quarterly net income was $95.5 million, compared with a loss of $257.2 million a year earlier amid pandemic-related closures. During its earnings call, Company executives indicated plans to open approximately 60 Aerie stores and 30 Offline by Aerie stores in 2021, which will be a mix of standalone and Aerie side-by-side locations. American Eagle launched activewear brand Offline last summer; the Company currently operates five Offline stores of its total 1,074 stores. Click here to request a list of future store openings.