Consumer Discretionary

Report by The Retail Tracker

Tapestry has been on a roll, driven by Coach’s use of technology, customer insight and strong design team, but momentum now appears past its peak “buzz”. While Kate Spade is beginning to show signs of life, The Retail Tracker would avoid the name at current levels - with the stock up ~135% over the past year and +16% YTD, it looks fully valued at ~22x earnings. Investors could instead own LVMH or Moncler at similar valuations, or Capri Holdings as a turnaround. For aspirational exposure, The RealReal and Lululemon are seen as more compelling.

Consumer Discretionary

Report by The Retail Tracker

Bed Bath & Beyond (BBBY) - Lacked inventory, energy, and sales help. Heard story after story about disappointed college shoppers.
Torrid Holdings (CURV) - Very under the radar. Website looks amazing with denim balanced with wear to work, dates and dresses.
Ralph Lauren (RL) - Very strong all around. Polo store looks outstanding and the Polo men’s assortments at Macy’s and Bloomingdale’s fantastic. Also found the Lauren sets in apparel and handbags in Macy's significantly improved.
Capri Holdings (CPRI) - Kors has some good new styles that break out of the logo story. Stores are cleaner promotionally than they have been. Versace was still very busy and is trending.

Consumer Discretionary

Report by Hedgeye

Brian McGough outlines why he thinks CPRI is primed to triple again from these levels. The stock has been a winner for Hedgeye (been long since ~$20/share), but it's all come from earnings, with close to zero multiple expansion. Brian looks at the sustainability of the earnings recovery and the levers that the company is pulling to create value. He believes Versace is on its way to becoming a $2.5bn brand pushing a 30% margin. Among other salient topics, Brian also explores what the company is doing with all its cash, including going over the M&A landscape.

Consumer Discretionary

Report by JJK Research Associates

JJK looks for the consumer’s appetite to renew normal living to support upside across PVH, Victoria's Secret, TJX and Ulta Beauty. Demand driven by a return to work, social activities and travel should fuel continued demand strength for apparel, accessories and beauty. With strong evidence from the luxury players including LVMH and Capri Holdings, JJK expects the consumer’s strong demand for these categories to be sustained, with little resistance to elevated pricing.

Consumer Discretionary

Report by JJK Research Associates

Consumer stocks are climbing the wall of worry reflecting supply chain challenges, higher distribution expense, rising prices and tough comps. Hence, there is limited visibility on the consumer sector delivering yoy F22 earnings gains. JJK highlight a select few who are well positioned for growth, including the value focused off-price retailers (TJX, Burlington, Ross) and beauty leaders (Bath & Body Works, Estee Lauder, Ulta). Upgraded growth strategies and Europe’s emerging rebound should also drive strong upside at A&F, Capri Holdings, Lululemon, PVH, Ralph Lauren and Victoria’s Secret.

Consumer Discretionary

Report by Hedgeye

Blowout quarter, stock remains a double in 1-2 years. CPRI’s earnings power continues to be underestimated and Brian McGough is comfortable being the outlier (by a long shot!) - he increases his EPS forecast for the year from an already very bullish $5.20 to $5.50 (vs. Street/company guidance of $4.50). He argues that CPRI should be valued on a SOTP basis - the current share price assigns no value to Versace (should be worth $4bn by next year and $10bn by Year 5 of Brian’s model). In addition, CRPI will be debt free within a year and generating $5-6bn in free cash over the next five years...what will it do with all the cash?