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Proprietary Data Insights Top Apparel Stock Searches This Month
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Source: Google Finance This chart of the top five most searched apparel stocks in The Juice’s Trackstar database of the tickers generating the most investor interest says a lot about our seemingly dichotomous consumer economy. We’ll illustrate what we mean by looking at what some of these companies have to say about the environment they’re running in. But first… A Savings Strategy As The Juice detailed earlier this year, people think they spend less on recurring monthly subscriptions, such as streaming and gym memberships, than they actually do. Why?
We bet just as many go underused. Like gym memberships. On the brighter flip side, what about those of us who overuse these memberships? For example, The Juice has a $169/month yoga membership. On average, we do yoga 23 times a month. This breaks down to $7.35 per class. Way less than the $25 the studio charges per class without a membership. If you went 23 times at that rate, you’d be out a hefty $575 a month. So what do we do? Supersavers that we are. On the same day as the studio charges us $169, we automatically transfer $406 to a savings account. That’s the difference between our monthly membership and if we paid per class. We hack the gloomy narrative on recurring subscription charges and turn it into a savings opportunity. Speaking of yoga, scroll with us… |
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Apparel Retail |
The Haves and the Have-nots |
Key Takeaways:
On Lululemon’s (LULU) Q2/2022 earnings conference call earlier this month, the word inflation never came up. Not even once. By contrast, on Gap’s (GPS) late August Q2/2022 call, the word inflation – or some form of it (inflationary) came up nine times. While we’re not doing perfect science here, there’s something to this. Lululemon knocked earnings out of the park and reiterated bullish Q3 and full-year guidance just this week. Meanwhile, Gap lost money in Q2 and withdrew its financial outlook for the rest of the year. Just this week, the company announced it’s laying off 500 corporate employees in San Francisco, New York, and Asia. When the current “challenging” economic environment came up, here’s what Lululemon executives had to say about things: And based on our guidance, we anticipate a high level of performance to continue in quarter three. These results are even more compelling considering the difficult macroeconomic environment in which we are operating. Like Costco (COST), Lululemon has a higher-end, financially resilient core consumer. Side note on Costco, the company reported earnings after the bell Thursday, beating EPS and revenue estimates, yet the stock tanked after . The Juice smells a buying opportunity. We’ll have more to say about Costco next week. Anyhow, this financially resilient core consumer keeps LULU going – and going relatively strong – amid challenging broad economic conditions. Conditions that are clearly taking the hammer to Gap. The entire Gap conference call had an air of uncertainty. As if Gap isn’t quite sure what’s going to happen with its business. Why? Because changing shopping behavior, particularly from its inflation-impacted, low-income consumer base, has hurt its business, particularly at Old Navy. Gap is also having difficulty managing its supply chain. Not the case at Lululemon. [instory_ad_1] The Bottom Line: You can learn a lot by listening to earnings conference calls. In today’s example, we gathered further evidence that our consumer economy is made up, increasingly, of haves and have nots. There’s a divide – an inequality, if you will – that makes companies with financially fickle consumer bases tough to believe in, let alone invest in. This pretty much makes Gap off-limits, even if you’re in bargain-hunting mode. Gap executives provided zero confidence in their ability to manage the current tumult and exit it in a position of strength. Just the opposite. Based purely on the vibe of their conference call, you can tell LULU has things under control. If the company can perform this well in this environment, how strong will they do when things turn? And it’s not all about the consumer, it’s about how management navigates supply chain issues and the inflationary pressure they face from a company perspective. It’s almost never a bad idea to invest in best-of-breed companies with loyal and financially healthy consumers. It’s often a good idea to invest in them when the chips are down and they have to show us what they’re worth. |
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