下面是小编为大家整理的美国软线零售业业绩预览,供大家参考。
Global Research
12 August 2019
US Softlines Retail Earnings Preview: Go with the No
We anticipate Retail stocks move lower over 2Q earnings season: We think the set-up for most stocks heading into earnings is poor. Not only does the market continue to harbor "late cycle"/recession fears as fundamentals remain weak, but also tariffs are now a reality. Because of these three factors, there is likely very little companies can say to give investors confidence that the macro/earnings environment won"t deteriorate over the next 6-12 months. This makes most stocks" "bar" for the quarter essentially unreachable, creating unfavorable upside/downside skews for stocks like AEO, FL, GPS, KSS, LB, M, and JWN, in our view. We don"t think all bad news is priced in: Valuations for 8 of the 13 upcoming reporters are at or very near 20-year lows. Some wonder how much lower stocks already trading at 6x or 7x P/E can go? While it feels somewhat counter-intuitive to be bearish stocks trading at trough P/Es, valuation has not provided downside support for stocks in this market. We see no reason why this would change near-term given macro concerns and the looming risk of the tariff rate rising to 25%. Our conversations with investors suggest very few trust the "E" in the P/E for most Softline stocks and therefore "bad" news likely gets treated as bad news until the market has a reason to think macro gets better. What companies say about price increases will be key: Tariffs are a major risk to many companies" 4Q19 and FY20 margins. If the industry broadly raises prices, then the negative impact to earnings from tariffs will be mi n imi z ed .
O n
th e
d ay
th e
U S
an noun c ed
t ari ffs
on
" L i s t
4 "
i t e m s
( 8/ 1) ,
C ol umb i a Sportswear said it "will be forced to raise prices on our products." Yet, Capri Holdings said on 8/7 - "our intent is to not raise prices." Will companies try to protect margins or take share? The more companies signal they won"t raise prices, the more likely it is tariffs will have a large negative impact on margins. We preview 13 earnings reports inside this note: The 13 reports are for American Eagle, Burlington, Foot Locker, Gap, Kohl"s, L Brands, Lululemon, Macy"s, Nordstrom, PVH, Ross Stores, Tiffany, and TJX. Please find detailed reports for each company inside. Jay Sole
Analyst jay.sole@ubs.com
+1-212-713 3559 Eddie Ryan, CFA
Associate Analyst
eddie.ryan@ubs.com
+1-212-713 9028
www.ubs.com/investmentresearch
This report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 45. UBS 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 in making their investment decision. Retailers, Specialty Americas Equities
Contents Quick reference tables .................................................... 2 Earnings calendar ................................................................................... 2 UBS Estimates vs. Consensus ............................................................... 3 Softlines valuation table .......................................................................... 3 American Eagle (AEO): Slightly Negative Upside/Downside Skew ...........................................................................................................
4
Burlington (BURL): Balanced Upside/Downside Skew ............... 7 Foot Locker (FL): Slightly Negative Upside/Downside Skew ..... 10 Gap Inc. (GPS): Slightly Negative Upside/Downside Skew ........ 13 Kohl"s (KSS): Slightly Negative Upside/Downside Skew ........... 16 L Brands (LB): Slightly Negative Upside/Downside Skew ......... 19 Lululemon (LULU): Balanced Upside/Downside Skew ............. 22 Macy"s (M): Slightly Negative Upside/Downside Skew .......... 25
Nordstrom (JWN): Slightly Negative Upside/Downside Skew .... 28 PVH (PVH): Balanced Upside/Downside Skew ....................... 31 Ross Stores (ROST): Balanced Upside/Downside Skew ............ 35 Tiffany (TIF): Balanced Upside/Downside Skew .................... 38 TJX (TJX): Balanced Upside/Downside Skew ........................ 41
Quick reference tables Earnings calendar Figure 1: Earnings calendar
Company
Ticker Date
Day
Time Confirmed
Macy"s
M
8/14/2019
Wednesday BMO Yes Kohl"s
KSS
8/19/2019
Monday BMO No TJX
TJX
8/20/2019
Tuesday BMO Yes Nordstrom JWN 8/21/2019
Wednesday AMC
Yes L Brands LB
8/21/2019
Wednesday AMC
Yes Ross Stores ROST
8/22/2019
Thursday AMC
Yes Gap GPS
8/22/2019
Thursday AMC
Yes Foot Locker FL
8/23/2019
Friday BMO Yes American Eagle AEO 8/26/2019
Monday BMO No Lululemon LULU 8/26/2019
Monday AMC
No PVH Corp PVH 8/27/2019
Tuesday AMC
No Tiffany TIF
8/28/2019
Wednesday BMO Yes Burlington Stores BURL
8/29/2019
Thursday BMO No Source: Company data, FactSet, UBS Research
UBS Estimates vs. Consensus Figure 2: UBS estimates vs. consensus FQ1 UBS
Consensus Difference FQ2 UBS Consensus
Difference FY1 UBS
Consensus Difference M
$0.47 $0.46
+1.0% M
$0.00 $0.10
-98.1% M
$2.93
$3.06 -4.3% KSS
$1.53 $1.54
-0.6% KSS
$0.85 $0.89
-5.1% KSS
$4.85
$5.25 -7.7% TJX
$0.62 $0.62
-0.7% TJX
$0.62 $0.68
-8.5% TJX
$2.46
$2.62 -6.2% JWN
$0.65 $0.79
-18.1% JWN
$0.79 $0.68
+16.2% JWN
$3.00
$3.29 -8.7% LB
$0.25 $0.19
+29.4% LB
$0.11 $0.08
+38.0% LB
$2.40
$2.46 -2.6% ROST
$1.11 $1.11
-0.8% ROST
$0.99 $1.00
-0.9% ROST
$4.40
$4.51 -2.6% GPS
$0.53 $0.53
-0.5% GPS
$0.56 $0.61
-8.0% GPS
$1.95
$2.07 -5.5% FL
$0.68 $0.67
+1.8% FL
$0.93 $1.10
-15.0% FL
$4.70
$5.01 -6.1% AEO $0.36 $0.32
+12.6% AEO $0.55 $0.53
+4.9% AEO $1.63
$1.60 +1.8% LULU
$0.89 $0.88
+0.2% LULU
$0.91 $0.90
+1.2% LULU
$4.65
$4.63 +0.3% PVH
$1.90 $1.89
+0.7% PVH
$3.57 $3.59
-0.5% PVH
$10.15
$10.18 -0.3% TIF
$1.05 $1.05
-0.1% TIF
$0.87 $0.90
-2.7% TIF
$4.85
$4.91 -1.2% BURL
$1.08 $1.14
-5.2% BURL
$1.32 $1.33
-1.1% BURL
$6.80
$6.98 -2.7% Source: FactSet, UBS Research estimates
Softlines valuation table Figure 3: Softlines valuation table
Ticker UBS
Rating Price 8/11/19 Mkt. Val. ($M) Price Target Return to PT
YTD Perf. Sales Growth
FY0 FY1
(est.) FY2
UBS EPS (est.)
FY0 FY1 FY2
FY0
P/E
FY1
FY2
5-yr. EPS
CAGR (e)
PEG
FY1 FY2
FCF Yield FY1 FY2
EV/EBITDA
FY1 FY2
EV/Sales
(FY1)
Div. Yield (FY1)
CPRI
Buy 31.00 4,699 47.00 51.6% -18.2% 11% 14% 5% 4.96 4.85 5.20 6.3x 6.4x 6.0x 7.9% 0.8 0.8 15.3% 16.0% 6.2x 5.8x 1.2x 0.0% TPR
Buy 27.39 7,947 46.00 67.9% -18.8% 31% 3% 5% 2.64 2.54 2.85 10.4x 10.8x 9.6x 8.7% 1.2 1.1 9.0% 10.7% 6.5x 6.0x 1.4x 4.9% PVH
Buy 74.66 5,593 129.00 72.8% -19.7% 8% 3% 3% 9.60 10.15 11.05 7.8x 7.4x 6.8x 9.8% 0.7 0.7 NA NA
7.5x 7.1x 1.0x 0.2% AEO Buy 16.07 2,768 24.00 49.3% -16.9% 6% 6% 5% 1.48 1.63 1.63 10.9x 9.9x 9.9x 8.3% 1.2 1.2 8.7% 9.1% 7.6x 7.4x 0.9x 4.1% SKX
Buy 33.94 4,540 47.00 38.5% 48.3% 11% 10% 7% 1.92 2.34 2.65 17.6x 14.5x 12.8x 14.0% 1.0 0.9 0.2% 5.6% 9.0x 8.3x 1.1x 0.0% TIF
Neutral 89.56 10,873 98.00 9.4% 11.2% 7% 1% 3% 4.80 4.85 5.10 18.7x 18.5x 17.6x 5.1% 3.6 3.4 3.6% 4.7% 11.9x 11.2x 2.7x 2.5% RL
Neutral 93.72 4,858 107.00 14.2% -9.4% 2% 2% 3% 7.19 7.70 8.30 13.0x 12.2x 11.3x 7.1% 1.7 1.6 12.5% 12.9% 7.8x 7.5x 1.2x 2.8% UAA Neutral 20.19 7,949 23.00 13.9% 14.3% 4% 3% 6% 0.27 0.34 0.44 74.0x 59.0x 45.4x 28.4% 2.1 1.6 2.0% 2.1% 23.6x 20.7x 1.9x 0.0% VFC
Neutral 82.74 32,945 88.00 6.4% 23.2% 12% -14% 6% 3.78 3.38 3.70 21.9x 24.5x 22.4x 5.5% 4.4 4.0 4.5% 4.0% 18.9x 17.5x 3.0x 2.6% HBI
Neutral 15.07 5,448 16.00 6.2% 20.3% 5% 2% -3% 1.74 1.77 1.80 8.7x 8.5x 8.4x 2.8% 3.0 3.0 12.0% 13.0% 8.8x 9.1x 1.4x 4.1% CRI
Neutral 87.53 3,916 91.00 4.0% 7.2% 2% 2% 3% 6.29 6.50 6.43 13.9x 13.5x 13.6x 3.9% 3.5 3.5 7.0% 6.6% 10.7x 11.1x 1.5x 2.3% NKE
Neutral 81.98 102,628 84.00 2.5% 10.6% 7% 8% 6% 2.49 3.00 3.20 32.9x 27.3x 25.6x 13.3% 2.1 1.9 4.9% 4.6% 20.5x 18.5x 3.0x 1.0% LULU
Neutral 182.82 22,468 185.00 1.2% 50.3% 24% 16% 14% 3.84 4.65 5.60 47.6x 39.3x 32.7x 18.3% 2.1 1.8 2.0% 2.6% 24.6x 20.9x 6.2x 0.0% FL
Neutral 40.92 4,489 40.00 -2.2% -23.1% 2% 2% 0% 4.72 4.70 4.40 8.7x 8.7x 9.3x -3.9% NM NM 9.5% 8.5% 7.9x 8.9x 0.8x 3.7% JWN
Neutral 29.30 4,531 30.00 2.4% -37.1% 2% -1% 2% 3.61 3.00 2.70 8.1x 9.8x 10.9x -2.4% NM NM 5.1% 11.2% 6.3x 6.4x 0.6x 5.1% GPS
Neutral 17.81 6,732 18.00 1.1% -30.9% 5% 0% 1% 2.59 1.95 1.81 6.9x 9.1x 9.8x -4.5% NM NM 8.0% 6.9% 8.5x 8.7x 0.8x 5.5% LB
Neutral 22.82 6,306 24.00 5.2% -11.1% 5% 0% 2% 2.82 2.40 2.45 8.1x 9.5x 9.3x -0.5% NM NM 10.2% 10.5% 7.8x 8.0x 1.1x 5.3% KSS
Neutral 49.06 7,949 52.00 6.0% -26.0% 1% -1% 1% 5.61 4.85 4.50 8.7x 10.1x 10.9x -1.7% NM NM 13.8% 11.7% 6.2x 6.6x 0.7x 6.2% M Neutral 19.43 6,001 21.00 8.1% -34.8% 0% -1% 0% 4.18 2.93 2.50 4.7x 6.6x 7.8x -5.5% NM NM 12.1% 11.7% 5.7x 6.3x 0.5x 7.7% ROST
Neutral 105.50 38,475 95.00 -10.0% 26.8% 6% 6% 8% 4.26 4.40 4.40 24.8x 24.0x 24.0x 6.9% 3.5 3.5 3.4% 3.5% 16.7x 16.8x 2.5x 1.0% TJX
Sell
52.96 64,223 41.00 -22.6% 18.4% 9% 6% 6% 2.43 2.46 2.50 21.8x 21.6x 21.1x 3.9% 5.5 5.4 3.3% 4.1% 15.1x 14.8x 1.8x 1.7% BURL
Sell
171.46 11,379 121.00 -29.4% 5.4% 9% 8% 7% 6.44 6.80 6.60 26.6x 25.2x 26.0x 7.6% 3.3 3.4 3.2% 3.4% 18.0x 18.2x 2.0x 0.0% Industry average Industry median
-0.5% -2.0% 7.8%
6.2%
3.4%
2.4%
4.0%
3.8%
18.3x 12.0x 17.1x 11.5x 16.0x 11.1x 6.1%
6.2%
2.5x
2.4x 2.1x
1.9x 7.2%
7.0%
7.8%
6.9%
11.6x 8.7x 11.2x 8.8x 1.7x 1.3x 2.8%
2.6%
Source: FactSet, UBS Research estimates
American Eagle (AEO): Slightly Negative Upside/Downside Skew
Heading into earnings, please find our view on:
The stock: Macro fears and tariffs likely overshadow good fundamentals: AEO currently manufactures roughly 30% of its goods in China. While this number likely moves to 20% over the next 18-24 months and AEO believes it can negotiate price concessions from manufacturing partners, the market likely focuses on the near-term impact. Plus, tariff fears are amplifying concerns that the macro economy is late cycle. These issues likely cause the market to stick with growth s t o cks
...