Consumer Discretionary

Lululemon’s Brand Loyalty & Expansion Opportunities In Focus, Analyst Sees Attractive Entry-Point For Investors

/ / Consumer Discretionary /

Truist Securities analyst Joseph Civello initiated coverage on Lululemon Athletica Inc. (NASDAQ:LULU) with a Buy rating and price target of $500. According to the analyst, Lululemon has some of the strongest brand loyalty in the activewear industry as its direct-to-consumer (DTC) model enables it to invest more in products & foster deeper customer relationships. The analyst writes that even in today’s macro-pressured/promotional environment, LULU’s demand/full-price selling remains robust. Civello sees ample growth opportunities as it rapidly expands in key areas (men’s, digital, & international). From high-tech fabrics that offer the best fit/feel to its fashion-forward designs, customers have shown they’re willing to pay a premium for LULU products, per the analyst. Further, despite leading earnings visibility, LULU’s premium to peers/the market remains at/below historical levels, which creates an attractive entry-point for a best-of-breed name, the analyst adds. The analyst forecasts a 15% revenue CAGR from 2022-2025E. Further, given LULU’s solid cost controls, the

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Walmart Could Maneuver In A Deflationary Environment

/ / Consumer Discretionary /

Walmart CEO Doug McMillon is warning that a period of deflation could be coming in the next few months, but the retailer is better positioned than most to manage such an environment, Baird analysts say in a research note. While falling prices ratchet up the need to sell more units, customers are responding well to price rollbacks that are funded by Walmart’s vendors, and paying less for food should free up dollars for more spending on general merchandise, the analysts say. They recommend buying Walmart’s stock after the past week’s pullback.

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Estée Lauder Divided About Succession Planning

/ / Consumer Discretionary /

Estée Lauder’s founding family and board are divided about how to regain investors’ confidence after seeing its stock price plunge by 50% this year. Chairman Emeritus Leonard Lauder, who built his mother’s company into an empire, and some board members, are dissatisfied with CEO Fabrizio Freda, according to people familiar with the matter. Freda’s biggest supporter remains Executive Chairman William Lauder, the people said. Jane Lauder, family member and marketing executive at her grandmother’s company, and Executive Group President Stéphane de la Faverie, are on the shortlist of internal CEO contenders. Some board members are considering external candidates in addition to internal ones to succeed Freda, the people said.

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Estée Lauder’s Investment in Japan Plant Becomes An Issue

/ / Consumer Discretionary /

Estée Lauder’s decision to invest roughly $1 billion in a new manufacturing plant in Japan to further support Chinese sales may hamper profits as the company reduces production levels. The beauty company built the factory to eventually manufacture about 300 million units a year, but it’s only expected to produce tens of millions of units in 2024. In the September quarter, the company posted about a 20% drop in skin-care sales, mainly driven by China and its travel retail business. Other big companies are confronting a China slump. P&G, owner of Japanese skin care brand SK-II, and Tokyo-based rival Shiseido have seen sales declines in China after consumers turned away from Japanese merchandise after Japan started to release water from the Fukushima Daiichi nuclear plant into the Pacific Ocean.

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Walmart Reports 3Q revenue of $160.8 billion, up 5.2%

/ / Consumer Discretionary /

Walmart reports strong revenue growth of 5.2% with strength across segments; eCommerce up 15% globally; GAAP EPS of $0.17; Adjusted EPS of $1.53; Raises FY24 sales and Adjusted EPS guidance BENTONVILLE, Ark.—-November 16, 2023– Walmart Inc. (NYSE: WMT): This press release features multimedia. View the full release here: Third-quarter highlights: — Consolidated revenue of $160.8 billion, up 5.2%, or 4.3% in constant currency (“cc”) — Consolidated gross margin rate up 32bps positively affected by a slight improvement for Walmart U.S. and timing of Flipkart’s The Big Billion Days (“BBD”) event, which flipped from Q3 last year to Q4 this year — Consolidated operating expenses as a percentage of net sales down 182bps, lapping a discrete charge from last year. On an adjusted basis, up 37bps on variable pay expenses and store remodels — Consolidated operating income up $3.5 billion, or 130.1%, adjusted operating income up 3.0% positively affected by the

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The Walt Disney Company Reports Fourth Quarter and Full Year Earnings for Fiscal 2023

/ / Consumer Discretionary /

The Walt Disney Company Reports Fourth Quarter and Full Year Earnings for Fiscal 2023 BURBANK, Calif.—-November 08, 2023– The Walt Disney Company (NYSE: DIS) today reported earnings for its fourth quarter and full year ended September 30, 2023. Financial Results for the Quarter and Full Year: — Revenues for the quarter and year grew 5% and 7% compared to the prior-year quarter and prior year, respectively. — Diluted earnings per share (EPS) from continuing operations for the quarter increased to $0.14 from $0.09 in the prior-year quarter and for the year, decreased to $1.29 from $1.75 in the prior year. — Excluding certain items(1), diluted EPS for the quarter increased to $0.82 from $0.30 in the prior-year quarter and for the year, increased to $3.76 from $3.53 in the prior year. Key Points: — Disney+ added nearly 7 million core subscribers in the fourth quarter. Key streaming content in the

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Warner Bros.’ Stock on Track for Worst Day in Two Years After Warning About Debt

/ / Consumer Discretionary /

Warner Bros. Discovery will not meet deleveraging targets by the end of 2024 without a recovery in TV ads, CFO warns Warner Bros. Discovery Inc.’s stock tumbled 18% Wednesday to put it on track for its worst one-day performance in more than two years, after the studio and streaming-video company reported a wider-than-expected third-quarter loss. Adding to the gloom, the company (WBD) warned on its call that it would not meet debt-repayment targets if the TV ad market fails to revive. The company’s loss came to $417 million, or 17 cents a share, for the quarter, narrower than the loss of $2.31 billion, or 95 cents a share, posted in the year-ago period. But it was wider than the FactSet consensus for a loss of 9 cents a share. Revenue grew 1.6% to $9.98 billion, just above the FactSet consensus of $9.97 billion. Read also: Cinemark is well-positioned for postpandemic

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