Getting our first look at consumer-facing outlooks now that we've gotten through the tedious Banks portion of earnings season.
Notable takeaways:
Hasbro was surprisingly good but it's not really "game on" until Q3 and Q4. Gets 50% of Toys and Games from China but has a reasonably flexible supply chain. Says earnings hit from tariffs will be $60 - $180 million hit to net earnings (LY net was only $385mm). Helped by digital focus.
Pepsi seemed pretty resigned to consumers being too price-conscious to buy snacks.
Chipotle has first negative comps since COVID. Said business fell off in late February and has continued worsening since. More people eating at home (but not buying Pepsi(?)). Fired shots at the entire outlook for QSR by insisting execution is great and the company is taking share.
Every month, I do a monthly Town Hall for my premium members at Macke's Retail Roundup+. This is meant to be a chance for my members to interact directly with me. I'll go over my portfolio, talk about my recent trades, and answer your questions.
On Monday afternoon, with US stocks off 3% and dropping the President concluded a meeting with top executives from Walmart, Target and Home Depot. According to Axios, executives told Trump supply chains were in a state of disruption and "shelves will be empty". This wasn't a hypothetical risk of the burgeoning trade war but an actual business fact, happening today.
Almost immediately, there were whispers of a shift in strategy on the trade war front. More importantly, to our immediate financial interests, stocks started coming off the lows.
As the White House has continued to offer more measured thoughts on trade of goods not critical to national security, the stocks hit hardest by the relentlessly negative drumbeat of news since Liberation Day started to rally.
Dicks, Gap, Lululemon, seemingly half the stocks in the mall are up 10% since the lows Monday, with some of our favorites leading the way:
AEO and Gap, two companies which have spent the last 5 years building supply chains all over the world only to see more or less everything shut down by Draconian fees that were constantly changing, are in the...
