Did Mall Retailers Have A Happy Fourth Of July?
Randal J. Konik of Jefferies believes retailers benefited over the Fourth of July weekend from a combination of weather, promotions and healthy traffic.
In a research report published Tuesday, Konik offered a deep dive into the retailing sector and included first hand observations. Overall, most retailers were "modestly more promotional" over the July 4 weekend compared to the prior year, as retailers were clearing remnant summer products to make room for fall's collection.
Here are some of his key findings.
Gap Brands
Gap Inc (NYSE: GPS)'s Old Navy store saw some of the "strongest traffic and conversion" within the mall sector over the weekend due to strong promotional activity and compelling price points.
On the other hand, core-Gap stores were "seeing pressure" in its basic t-shirt collection but were nevertheless creating large lineups at the cash register as customers "stocked up on core basics."
Banana Republic was incrementally promotional this year compared to last year.
Abercrombie & Fitch
Both Abercrombie & Fitch Co. (NYSE: ANF)'s core-store and Hollister began selling a small amount of back-to-school products and new product lines, such as Hollister's "Epic Flex" and "Advanced Stretch" denim.
According to the analyst, the enhanced assortments will be further supported by the "revamped brand positioning" at both brands.
L Brands
L Brands Inc (NYSE: LB)'s Victoria's Secret's semi-annual sale kicked off June 7 and continued into the weekend, as opposed to last year's event, which ended June 21 in stores and June 29 online.
Konik noted stores were still "working through a significant amount of clearance apparel," while beauty continues to be "heavily promoted."
The company's Pink brand appears to be better positioned from an inventory standpoint.
Finally, Bath and Body Works was winding down its semi-annual sale and stores were equally promotional this year as it was last year.
Latest Ratings for ANF
Date | Firm | Action | From | To |
---|---|---|---|---|
Sep 2019 | Initiates Coverage On | Neutral | ||
Sep 2019 | Upgrades | Underperform | Peer Perform | |
Sep 2019 | Maintains | Underweight |
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