Category Archives: Retail Sector

IPAD 2 -

IHS Isuppli cuts its forecast for iPad shipments by 9%. Apple faced a shortage of speakers and had some quality control issues with the screens. Surprisingly enough, the March 11th  Earthquake is unrelated to this.  Although there will be a shortage in iPads supplied, Apple will still dominate the tablet industry.

Personally, I’m tired of waiting for my new iPad. I guess I’ll buy the iPad 3 when it comes out. Hopefully Apple is able to meet demand with the iPhone 5……

March Same Store Sales- Expectations of Decline are Probably Baked In — Thursday, April 7 before the open will be the time when most U.S. retailers will report same store sales, or revenues from stores that have been open for at least one year.  Analysts largely expect March sales to have fallen a bit due to higher gasoline prices and a later than usual Easter date.  (Easter is on April 24 this year compared to April 4 last year, and SSS are reported as y/y figures.)

What the analysts are expecting:

- Decline of 0.9% for March sales (March ’09 SSS were +9%)
- Should the average show a decline in sales, it would mark the first drop since August 2009
- Weakness in sales due to low consumer confidence and higher food and gasoline prices (note: gasoline prices are ~$3.66/gallon compared to ~$2.83 last year), although one strategist at Kurt Salmon says it generally takes 4-6 months of sustained price changes to change consumer behavior
- Forecast for later on in the year: clothing prices will rise due to higher cotton and transportation costs
- KSS to post one of the largest declines
- TGT and M already have come out saying that SSS figures will likely show a decline in March, but a rise in April
- Department stores expected to show weakest sales numbers
- COST expected to post among the largest gains as the discount retailer had one more day of sales in its March period and also sells gas at some locations
- Retailers that target college students may have fared better than children/teenagers since college spring breaks fall in March whereas elementary/high school spring breaks fall later in accordance with the later Easter date
- LTD also expected to post one of the biggest gains

Bottom line: Don’t be surprised to see a bunch of declines in same store sales.  However, I do believe that this expectation has already been baked into prices.  Retail stocks have been relatively weak compared to the broader market so it is my belief (and hope, especially for TGT) that once the numbers are out of the way tomorrow, money will be able to flow back into these retail names.

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Future of Handheld Gaming Consoles

I’m a gamer. I’m being playing games since I was 5 years old. From the very simple Tetris and GameBoy to the Sony PSP  and Nintendo DS I’ve enjoyed every stage of their progress. But during the last couple of years I’ve wondered how they would survive in the electronic consumer market which seems to be converging day by day.

Within the next few years every consumer electronic would be able to make calls, browse the Internet, social networking, play music and video and play games. So what would happen to these big names in the gaming consoles in the future? We would have to take some time to analyse this situation.

Sony just came out with the announcement of its newest handheld code named “NGP” which looks quite the same as its predecessors. It specs are fantastic with quad-core ARM Cortex-A9 processor, 5-inch touchscreen OLED display with 960 x 544 resolution, dual analog sticks (not nubs as on the current generation), 3G, WiFi, GPS, a rear-mounted touch-pad, accelerometer / gyroscope motion sensing , an electronic compass, and cameras on both the front and back. Well is it impressive enough? If you look at some of the other types of consumer electronics you can see that you have quite the same specs as this except for the processor. How can they really make distinction between the other consumer electronics? I’m not sure if there is a clear cut line. If there was it is surely fading.

During iPhone 4G announcement it was told that the number of games purchased in the iPhone actually is much greater than the games purchased for any other gaming console. I’m sure the android platform is also able to give a similar comment. Apart from them the tablets are making their way killing off the market held by netbooks. These devices can afford to have much powerful processors and would surely rival the handheld gaming consoles. I was under the impression that the gaming console market would be safe with the younger generation until I heard a 10 year old asking for a iPad for Christmas.

This is what I believe. Sony and Nintendo would have to make a decision soon whether to kill off the devices or to join the game that is very much inline with the smartphones and tablets in the market. Smartphones and Tablets will be the future of gaming. They would cease to be called as Smartphone or Tablets but would be just larger and powerful or smaller and less powerful version of the same type of devices. I just cannot wait to see how things will turnout.

Some Good Looking Numbers Today, But Are We In For A Sucker’s Rally?

As today was the first Thursday of the month, August comp sales were out in the morning.  I wasn’t expecting great numbers due to the heavy use of discounting by most retailers, not to mention the weak economy, but the sales figures actually turned out to be good news today.  The numbers showed y/y growth and more than 2/3 of the retailers beat estimates, which marks the most since February of this year.  And of those companies that missed, it was only by a small margin (no more than 1%).  Check out the interactive chart of comp sales since 2009, including today’s numbers, in the Analysis section of our website.

Retail stocks certainly helped boost the markets today on top of the net positive economic data out in the morning- Nonfarm Productivity, Initial Jobless Claims, Factory Orders, and Pending Home Sales.  I’m not ready to say the economy is starting to a whole lot better and will be careful not to let the market suck me in.  Today’s rally again was on light volume.  I will remain skeptical until summer trading is really over and once traders return and volumes pick up again.