美国百货商店与软线零售行业策略分析

1、Dept Stores / Specialty SoftlinesBoss Round-Up Prep Pack: Stock Setups; 5 Industry/Macro Themes & Key QuestionsAhead of our 5th Annual Retail Round-Up (RRU) this week (April 10th & 11th) we thought value-add to lay out our latest fieldwork and micro/P&L-specific questions for each of our companies a

2、t the conference (full listing by company of detailed questions on pages 9-19 herein) as well as 5 key macro themes of discussion.Top Ideas By Sub-Sector Into The 5th RRU: (1) Department Stores: Overweight KSS (#1 weather/Easter sensitivity) vs. Underweight JWN/DDS. (2) Off- Price Retail: Disruption

3、/demographic sub-sector beneficiary w/ Overweight ROST/TJX core compounding holdings and OW-rated an attractive near-term buying opportunity. (3) Global Brands: OW-rated NKE/VFC remain best-in-class mid-teens compounders w/ upside to the “E” and multiple at OW-rated (top growth idea), OW-rated PVH (

4、top value idea), and OW-rated RL initiating a long trading call on Neutral-rated CPRI through the 19 RRU & June analyst day. (4) Dollar/Discount Stores: Defensive growth = way to play brick & mortar retail w/ OW-rated DG (GARP) and OW-rated (Growth) well positioned multi-year w/ 1Q SSS tracking Stre

5、et at Neutral-rated FIVE and Neutral-rated BIG by our work. (5) Mall-Based Specialty: Selective stance w/ OW-rated our only OW w/ near-term March/April Jan/Feb “data trade” underway across mall-based Specialty (Neutral-rated URBN/AEO/ANF) noting tougher 2Q and 2H compares ontap.Day #1: Wednesday Apr

6、il 10th:KSS (Overweight) Raise PT to $84: We are hosting CEO Gass and Besanko at our Retail Round-Up on 4/10 and for a 4-day European roadshow from 4/15-4/18. Trading at 5.7x FY20 EBITDA w/ a 3.7% dividend yield (10% FCF yield), at 2x adjusted debt leverage we see 4 areas of focus key to the next le

7、g: (1) 1Q Top-Line Confidence: Our work points to an improving same-store- sales cadence as the quarter progressed (April-to-date March with mgmt.s 1Q “low-end of 0-2%” guide achievable in our view lapping a detriment store closures a ago (+ additional seasonal impact). (2) Category Opportunity: Wom

8、ens is a top improvement area 2019 (Nine West launch) with Cosmetics a top forward focus and continued growth in active/athletic.(3) Inventory: KSS entered 1Q with healthy inventory levels (-2% per store) a positive outlier across the dept stores with management confirming inventoryEquity Ratings an

9、d Price TargetsNorth America Equity Research08 April 2019Retailing Department Stores & Specialty SoftlinesMatthew R. Boss, CPA AC(1-212) 622-2630 HYPERLINK mailto:matthew.boss matthew.bossBloomberg JPMA BOSS Steven Zaccone, CFA(1-212) 622-8996 HYPERLINK mailto:steven.zaccone steven.zacconeGrace Smal

10、ley(1-212) 622-4894 HYPERLINK mailto:grace.smalley grace.smalleyJ.P. Morgan Securities LLCCompanyTickerMkt Cap ($ mn)Price ($) Rati Curng PrevCur Price TargetEndDateEnd DateBig Lots, Inc.BIG US1,631.6538.37Nn/c42.00Dec-1938.00n/cBurlington StoresBURL US10,791.05156.46OWn/c174.00Dec-19n/cn/cCapri Hol

11、dings LtdCPRI US9,899.9548.09Nn/c54.00Dec-1947.00n/cFive BelowFIVE US6,997.75125.41Nn/c133.00Dec-19n/cn/cKohls Corp.KSS US17,046.0072.00OWn/c84.00Dec-1976.00n/cMacys, Inc.M US7,952.8825.49Nn/c26.00Dec-19n/cn/cNIKE, Inc.NKE US155,718.4085.40OWn/c90.00Dec-19n/cn/cPVH Corp.PVH US10,295.33127.26OWn/c144

12、.00Dec-19139.00n/cOllies Bargain Outlet HoldingsOLLI US5,839.0089.69OWn/c97.00Dec-1995.00n/cTiffany & Co.TIF US13,448.25107.50Nn/c104.00Dec-19n/cn/cSource: Company data, Bloomberg, J.P. Morgan estimates. n/c = no change. All prices as of 05 Apr 19.See page 45 for analyst certification and important

13、disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor i

14、n making their investment decision. HYPERLINK / management in only “middle-innings” today. (4) Gross Margin: Tone/commentary around gross margin drivers for +10bps in FY19 led by inventory mgmt/efficiencies, partially offset by national brands and e-comm.BURL (Overweight / Analyst Focus List Pick):

15、In our view BURLs 200bps P/E multiple discount to the companys 3-year average (19x vs. 21x average) points to continued upside opportunity with 4 key focus areas into this years RRU: (1) The 1Q17 Lateral: March/April same-store-sales wereup+4.5% in 1Q17 post February down high-singles (similar weath

16、er/refund delay headwinds) w/ mgmts confidence in +0-2% guidance implying positive low-to-mid- singles to close the quarter. (2) Inventory Position: Any update to comp store inventories planned down mid-singles by 2Q-close (vs. +1.8% exiting 4Q18 & similar plan for 1Q-end). (3) Ladies Heritage: Comp

17、any specific execution versus industry/macro drivers of the companys recent ladies apparel weakness which accounts for 11-12% of the business. (4) The Multi-Year SG&A Hurdle Rate: Return to SG&A leverage at a +3% comp beyond FY19 would equate to managements mid-teens bottom-line growth algorithm (w/

18、 capital allocation incremental).OLLI (Overweight) Raise PT to $97: We continue to view OLLI as a multi-year “niche” growth story as the number 1 player outside of apparel in a $65B closeout market with slightly below 20% bottom-line growth driven by mid-teens unit growth and 1-2% comps. 3 Key Focus

19、 Areas: (1) SSS Cadence Noting Low-1Q Bar: Managements +1-2% guide matches prior precedent (vs. trailing 5-yr +4.2% with 1Q (weather) and 4Q (compare) expected at the of the range versus 2Q/3Q forecasted at the high end. Importantly, based our recent checks (& April opportunity) combined with a “pos

20、itive turn in business trends in the last couple weeks” at the time of the 3/26 EPS call noting material “pops” in the business seen in regions of the country where weather has turned we raise our 1Q comp to +2%. (2) Gross Margin Visibility Back-End Buying: FY19 gross margin guidance calls for flat

21、performance w/ 25-30bps merchandise margin expansion offset by supply chain/freight headwinds with Flat 2H gross margin to potential ocean freight surcharges. We anticipate mgmt. is embedding conservatism for the sulfur regulations, but we await further details noting higher off-price gross margin v

22、isibility given back-end buying to incorporate headwinds particularly during times of strong availability. (3) Capital Allocation Priorities: Mgmt. announced for the first time a $100M share repurchase 2-year authorization representing 2% the free-float today. Importantly, share repurchase represent

23、s upside to mgmts guidance w/ current FY19 guidance today not embedding any impact from sharerepurchases.FIVE (Neutral): 4 Key Points of Focus: (1) Confidence in +3-4% 1Q SSS: A point from our 3/27 mgmt follow-up was strong line of sight” to 3-4% comps based on QTD comps and anticipated April perfor

24、mance. Based on our work (& noting FIVE as a top beneficiary in 1Q17 from a later Easter), we are modeling +4% comps in 1Q w/ new customers post 4Q/Holiday TOY, increasing brand awareness, and small TV test incremental YOY. (2) 2H SSS Drivers In Place: over the balance of 2019, mgmt. sees a signific

25、ant license opportunity led by the build-up into the Frozen 2 release on Thanksgiving (in addition to Aladdin, Story 4 and Avengers), 50 remodels should account for a 20-30bps tailwind (mid-singles lift), as well as continued emphasis on customer experience, and adding impulse items to100 stores. (3

26、) Upside to New Store Embedded Economics. Our math on FY19s store plan implies 90% of 2019 revenue (20% at mid-point) is already accountedfor in new store growth at managements modeled 90% NSP. Importantly, mgmt. plans 90% productivity below 2018 at 100%. (4) Margin Walk-Through: 1H vs. 2H margin w/

27、 gross margins flattish in FY19 (negative in 1H) noting 50bps of SG&A pressure in FY19 derived (i) DC builds/Depreciation= 20bps, (ii) Lease Accounting = 20bps, (iii) Wage reinvestment = 10bps.BIG (Neutral) Raise PT to $42: Trading sub-10 x our 2020 EPS with 3.1% dividend we see a favorable near-ter

28、m setup in BIG. 3 Key Focus Areas: Same-Store-Sales Drivers & Sustainability: Key will be the drivers and sustainability of the comp inflection in 3Q18 to 3%+ comps, which accelerated to positive mid-single-digits in Dec/January. Importantly, mgmt. guided 1Q19 and FY19 SSS up low single digits incor

29、porating tax-refund delay headwinds in 2H February with our lateral work (DG/WMT commentary) pointing to recent acceleration (noting high correlation to big ticket furniture) with the break of favorable weather this past weekend coinciding with BIGs higher volume Friends & Family promotion equating

30、to potential upside to our +2.5% comp. Looking ahead, management continues to see a high-single to low-double digit lift Store of the Future remodels (slated to be 30-40% of the chain by year-end). (2) The Gross Margin Roadmap: 1Q and FY19 guidance calls for higher gross margin with driven by better

31、 IMU, lower shrink, and favorable merchandise mix (furniture/seasonal and home), partially offset increasing product costs. (3) SG&A Hurdle Moderates in 2H: Embedded within full-year SG&A guidance $ growth of mid-singles is the start of a 3-year $100M cost reduction program which will be used to fun

32、d growth activities included in guidance, accelerating the strategic investment in stores of the future (215 vs. 100 in FY18), relocating stores, and wage increases. Mgmt. sees the leverage point for the business moving to a low-single-digit SSS by 2H19 (& into FY20) from the 1H19smid-single-level.T

33、IF (Neutral): At 20 x our FY20 EPS TIFs current valuation is commensurate with both its 5-year average and +4% traditional premium to European luxury peers. Larger picture, we expect mgmt to highlight progress on strategic initiatives under their control while being cognizant of macro-volatility and

34、 tougher compares near- term. 3 Key Focus Areas at The 19 RRU: (1) High-End Macro Update/Impact: With the SPX 20% December lows (& historic .85 R2 to Americas SSS), US- China trade tensions easing, and the RMB strengthening off of recent lows; managements current view of the macro backdrop and healt

35、h of global consumer groups (in particular the US and Chinese consumer). (2) Top-Line Initiative Timeline Bridge: Progress on Tiffanys six strategic priorities and marketing and product innovation pipeline in 2019 and bridge to FY21 P/L implications at full implementation. (3) Sustainability of FY19

36、 Cost Efficiencies: Details sustainability beyond FY19 of cost-savings efficiencies driving operating margin expansion on low-single-digit revenue growth (versus mid-single-digit hurdle historically).CPRI (Neutral): Initiate Long Trade Analyst Day / Raise PT to$54: With CPRIs market cap $2.8B since

37、late September ( $2.1B Versace acquisition price) or shares off 29% (vs. SPX Flat) trading at 6x our CY20 EBITDA (incorporating $1.5B forward debt pay-down) or a 15% discount to peer TPR, well below the 10 x global brands average (range of 8-12x), and in-line w/ Dept Stores/Mall based retail - we se

38、e a favorable risk/reward setup CPRI through the companys 6/4 analyst day including managements presentationat our Retail Round-Up. Three Key Points: (1) 300bps+ MK Margin Erosion Fundamentally Priced-In: Digging our valuation points to the Michael Kors standalone brand trading on 5x FY21 EBITDA ass

39、uming 10 x or a50% haircut to acquisition multiples Versace/Jimmy Choo (in-line w/ EMEA lux) - below the 5.5x mall-based department stores average effectively pricing in than 300bps MK EBIT margin compression on our math (vs. “generally stable” guidance at 19.5% today). (2) Fieldwork Points To Signs

40、 of Improvement: Our fieldwork (& promotional tracker) points to sequential improvement in the Michael Kors brand top-line and margin front as the quarter progressed (March February January). Driving the improvement by our work is the combination of improved retail traffic, elevated penetration and

41、assortment improvement (including accessories) supported the successful Bella Hadid Spring campaign 1/28 launch with our promotional tracker pointing to stable main-line promotions YOY in Feb/March following a promotional January YOY w/ mgmt noting competitor promotional dynamics new news in 4Q. (3)

42、 4 Investor on Tap: Beyond our Retail Round-Up week we see CPRIs 6/4 Analyst as a further catalyst for the stock noting FY20 and financial plan targets “de-risked” w/ Junes Investor Day to provide incremental and showcase managements confidence (as evident during our HYPERLINK /research/content/GPS-

43、2938378-0#_blank 3/8 Chicago Roadshow) underlying drivers of financial targets including management access across the three brands.Day #2: Thursday April 11th:PVH (Overweight / Analyst Focus List Pick) Raise PT to $144: DespitePVHs+14% move since its 3/27 4Q print (& +37% move YTD vs. SPX +15%) is t

44、rading on 11x our FY20 EPS, a 17% discount to its 13x 5-year average or a sub 1x PEG to managements 12%+ multi-year stated algorithm, which we heard CEO Chirico reiterating at the RRU. 4 Key Focus Areas: (1) Consumer Backdrop Clarified: Post CEO Chiricos recent comments of macro volatility we expect

45、 investors to focus on the health of the consumer separating potential temporary factors (weather, Easter-shift, government shutdown, tax refunds) vs. any recent structural stepdown in the consumer (USA + Europe + Asia). (2) Klein: CK Jeans company-specific or category issue and timeline for turnaro

46、und, signs that CK brand is healthy and resonating with the consumer, top-line opportunity across regions and product categories, multi-year margin opportunity noting Calvin margins 300bps below Tommys. (3) Tommy Hilfiger: Focus on the “recipe of success” driving Tommys strong brand momentum and the

47、 sustainability of top-line growth including category and regional top-line opportunity, Sportswear opportunity post Macys exclusivity lift (likely more FY20/21 weighted), further for margin opportunity post +350bps margin expansion since FY16. (4) Guidance: Post PVHs 3/28 EPS Print - drivers of PVH

48、s 1Q19 (particularly relative to QTD trends) and FY19 guidance and areas potential conservatism, with our model pointing to potential upside opportunity on international top-line and CK margins given significant gross-margin recapture opportunity and costefficiencies.NKE (Overweight): With Street 4Q

49、19/FY20 EPS now rebased post NKEs 3/21 EPS print, we see the profile transitioning to mid-teens EPS growth next with potential upside to our multi-year EPS power consisting (i) Top-Line supported by a strong product pipeline through FY20, (ii) Gross Margin: 200bps+ ASP tailwinds w/ Channel and geogr

50、aphic mix opportunity, and (iii) SG&A: leverage to 5-year plan represents upside to our model. Key Focus Areas: (1) Top-LineMomentum & Multi-Year Drivers: Initiatives to sustain top-line momentum, product innovation pipeline and improvements in go-to-market process, in particular in North America, (

51、2) Margin Opportunity & Forward Runway: Breakdown and incremental color on margin drivers including full price selling (+270bps GPM tailwind in 3Q), DTC mix shift, product cost headwinds (240bps GPM headwind in 3Q), FX (70bps GPM tailwind in 3Q) and digital investments with the timeline for leverage

52、 within the 5-year plan. (3) Guidance: Interpretation and drivers of NKEs 3/21 preliminary FY20 guidance for profitability in line w/ October 2017 Investor Day plan (we believe referring to NKE mid-teens algorithm).M (Neutral): 4 Key Focus Areas: (1) Update Core” vs. Offensive Growth Drivers: With m

53、gmt.s guidance for SSS of Flat to +1% inclusive of Backstage and Growth-150 initiatives, investors will be focused on an update regarding in-store and digital initiatives to improve the underlying organic run-rate. (2) SSS Cadence & Drivers of 2H Improvement: M CEO recently cited on 3/12 that trends

54、 were more “stable” following tax refunds normalization and the shutdown conclusion noting current FY19 0-1% comp guidance embeds Fall trends to slightly improve versus 1H19 despite tougher multi-year compares. (3) Category Performance: M cited strength in fragrances, skin care, womens shoes, active

55、, jewelry, mens tailored and furniture, but noted disappointment with womens sportswear, handbags and cosmetics in 4Q showing performance remains mixed in FY19 SSS outlook. (4) Our Future Size and Multi-Year Magnitude: Mgmt. outlined $300M of incremental cost savings for FY19 to be used to fund top-

56、line initiatives and continue to stream-line the organization consisting $100M in SG&A restructuring savings and $200M “Fund Our Future” productivity efficiencies (GPM &SG&A) to improve the supply chain and optimize inventory mgmt. noting “additional opportunity overtime.5 Key Industry/Macro Themes

57、Into 2019s RetailRound-Up:Theme #1: Current Health of the Consumer: We expect management teams an overall favorable consumer backdrop in 2019 with the magnitude of moderation in versus the conference a ago and variables to monitor in 2H19 our key focus this year. As a reminder 2018s RRU key theme wa

58、s “confidence” in the consumer backdrop, with underlying strength having inflected in Q417 driven by improved consumer confidence, increased wages, employment, tax-reform benefit more than offsetting headwinds from higher gas prices rising interestratesTheme #2: 1Q Cadence & 2H Roadmap. With retail

59、seeing a weaker start to 1Q in February due to the adverse combination of weather and tax refund delays, we expect mgmt. teams to discuss a April-weighted 1Q especially with Easter 3 weeks later this (4/21 vs. 4/1 LY) and weather gradually turning more favorable. Importantly, lateral commentary has

60、pointed to an improvement business as the quarter has progressed with WMT (4/4) citing consumer is in about the “same shape” were in 4Q netting out all the pluses & minuses traditionally in 1Q, including weather; DG seeing lift once tax refunds hit (particularly the child tax credit) and citing mate