Consumer Discretionary

Report by Woozle Research

Q1 channel checks reveal weaker-than-expected SSS growth in Europe (+0.35% Y/Y vs. consensus of +2.65%). While 50% of surveyed store managers reported positive Y/Y revenue growth, driven by new seasonal collections and effective in-store promotions, 30% of stores experienced declines due to competitive pressures and adverse weather conditions, particularly in markets like the UK and Czech Republic. 40% of managers noted declining foot traffic as a headwind, particularly in Eastern and Northern Europe. Seasonal inventory challenges were also cited by 20% of respondents, affecting sales performance in some regions, especially in Switzerland and the UK.

Consumer Discretionary

Report by Woozle Research

Woozle upgrades the stock to Buy based on findings from their recent surveys - store managers report LFL sales growth of +3.5% in 2Q23 vs. the same period last year with sales rising sharply in recent weeks after a muted start to the quarter. 40% of respondents report sales are trending ahead of internal targets (with only 10% underperforming). This is a much stronger performance than other names under Woozle's coverage such as H&M and Superdry. Promotional activity is unchanged due to healthy inventory levels and strong sell-out trends. While summer ranges have been particularly strong, menswear has seen stagnant sales trends due to rising competition.

Report by Vision Research

Since Vision pitched their short thesis on Vidrala, Verallia and O-I Glass at our Equity Shorting Conference in mid-Mar the stocks have underperformed the Stoxx600 by ~8%. In the last couple of months they have also initiated 3 new European shorts, 3 new US shorts, and has readied a new $7bn+ European short (trades ~$20m/day and has short interest of <1%) for initiation next week. Please join Vision for a meeting while members of their team are in Paris (Jun 5th-6th), Zurich (Jun 7th) and London (Jun 8th-12th).

In the last 24 months, Vision has closed several shorts including: Allegro, AutoStore, Boohoo, Burlington, Colruyt, De'Longhi, Electrolux, Gerresheimer, H&M, Hargreaves Lansdown, Inditex, New Relic, Nokian Tyres, Peloton, Similarweb, Thule, Trex, TSMC, UiPath and Whirlpool.

Industrials

Report by Vision Research

Trades >$10m/day and has <1% short interest - will be lapping price increases at a time when volumes have turned negative and there are substitution threats and declining per capita usage of products at some of its largest customers. It trades >10x EV/EBITDA on 2023 estimates that call for 40% growth in EBITDA.

In the last 24 months, Vision has closed several shorts including: Allegro, Boohoo, Colruyt, H&M, Inditex, New Relic, Nokian Tyres, Peloton, Similarweb, Thule, Trex, TSMC and UiPath.

Consumer Discretionary

Report by Woozle Research

Downgrades to Short / Sell based on findings from their recent surveys with store managers - Woozle’s H&M channel checks were much more negative than other names in their fashion coverage, many of whom outperformed targets over the Christmas period. Forecasts 1Q23 LFL sales growth of 0% y/y with 24% of respondents reporting that sales are falling below internal targets. This represents a meaningful deterioration in target meeting performances q/q as the latest product releases underwhelm customers. Furthermore, the number of customers trading down to cheaper ranges has increased considerably q/q as the cost-of-living crisis deepens.