Paul Cerro's avatar
$36.7m follower assets
Consumer & Retail Weekly Recap #12: 9/25 out now!
Company Announcements $WMT $AAPL $PTON $SPOT $GM $HMC $HD

Corporate Shakeups $JWN $SKT $KSS $FRPT $PTON


Financing News $FXLV $RCL $TM

Regulatory Updates $IRBT $MCD $AMZN

Be sure to check it out and subscribe

Erick Mokaya's avatar
$102.4m follower assets
Costco comparable sales up +10.1% in August 🛒
$COST reported comparable sales growth of +10.1% and net sales of $17.55B for the retail month of August, an increase of +11.4% from $15.75B last year. Comparable sales, excluding impacts from changes in gasoline prices and forex, increased by +8.7%.

The business is chugging along nicely despite macro headwinds. Warehouse clubs like Costco have actually benefited from the recent economic turbulence, as consumers are looking to mitigate inflation-driven prices by shopping at the warehouse club.

A price hike for Costco membership might be on the horizon soon since the company raises prices approximately every 5.5 years. $WMT owned Sam's Club and Costco’s main rival, already announced that it will be raising membership fees next month.

Personally, I made a mistake not buying the stock when it was in the $435 range a few months ago. I was too greedy and missed the chance to get in. It always seems too expensive. But there will be a next time, however I wouldn’t expect the stock to go down too much.
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Paul Cerro's avatar
$36.7m follower assets
It's All About "Perspective"
Just because some retailers have beat sales estimates recently does not mean they're out of the woods yet.

Take a look at 12 companies in this week's "Chart of the Week" that shoes how dire the inventory situation has become.

Erick Mokaya's avatar
$102.4m follower assets
Our newsletter this week
💰 Spending slowed in late spring, rebounded in July
🛍️ Retailers working through excess inventories
📺 Streaming companies pushing into live sports

Neil's avatar
$35.4m follower assets
Better Buy: Amazon or Walmart?
The battle of the retail giants.

  • Walmart in its latest quarter reported revenue of $152.86 billion, up 8.4% year-over-year (YOY), compared to Amazon's 7% increase to $121.2 billion.
  • Earnings per share came in at $1.77, down 0.6% YOY.
  • Walmart's net income for the quarter rose to $5.15 billion, whereas Amazon reported a net loss of $2 billion.
  • E-commerce sales rose 12% YOY, whereas online store sales for Amazon decreased 4% YOY. But as I said in my last video, I'm not too concerned about that.
  • Membership and "other income" grew 25.6% YOY to $1.5 billion compared to Amazon's $8.7 billion, which grew 10%, and this part of the business is probably Amazon's biggest moat.
  • Walmart stock has a quarterly dividend yield of 1.61%, whereas Amazon pays no dividend.
  • Amazon's most lucrative segment, Amazon Web Services, increased 33% YOY to $19.7 billion. This is where the scales turn completely in Amazon's favor.
  • With Amazon's recent acquisition of iRobot and 1Life Healthcare, Prime is on its way to becoming a "life subscription," and, in my opinion, you can't put a price on that.

$WMT earnings highlights
Looking at both Walmart and Sam's Club merchandise highlights, I gain a better gauge on which retail niches are doing well and which aren't.

Here are Walmart's quarterly merchandise highlights:

And here are Sam's Club's merchandise highlights:

From looking at the two brands, here are a few highlights we can gather:
  • grocery sales grew by low double digits
  • health and wellness products grew by single digits (people prefer to buy smaller containers of those products than in bulk)
  • technology, office and entertainment product sales continue to see declining sales
  • back to school spending has provided some growth for retailers in areas like merchandise and apparel

Overall, this earnings report makes me slightly bullish on $NKE $VFC $FL $DKS $JNJ $ABT while making me bearish on $WSM $BBY $ETD $RH $W $YETI $MLKN.

Being the bellwether of the retail sector, $WMT tells us what consumers are shopping for and what they aren't in the market for.
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When you say you are bearish/bullish on these adjacent companies, is that more of a short to medium term outlook?
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