On Monday, I joined Neil Cavuto on Fox Business to discuss Stock Market outlook, the Election, Earnings Seasonality and more. Thanks to Neil, Jenna DeThomasis, Kevin Fitzgerald and Matt Hassan for having me on:
On Tuesday, I joined Brad Smith on Yahoo! Finance to discuss Earnings, Outlook, Fed and one position. Thanks to Brad, Sarah Smith and Kristen Tsoubanos for having me on:
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1. Solvency risk off the table with $1.5B sale of WorldPac business.
2. Proceeds to be used to bring debt ratio down to 2.5x. And to re-ignite growth story by opening 100 stores per year (4700 now).
3. Pricing now in-line with competitors so they don’t lose business.
4. Distribution Center consolidation (14 from 38) with nodes will create supply chain efficiency. $50M in procurement savings next year.
5. Focused on blended box (DIY and Professionals).
6. Comp store sales up 0.4% yoy despite challenged low-end consumer.
7. Pent up demand with 287M cars that are 12.7 years old (on average). Oldest fleet in history. Deferred maintenance due.
8. AAP will achieve $100M in free cash flow this year.
V.F. Corp Update
Key Points For Continued Turnaround:
1. Free Cash Flow + proceeds from non-core physical asset sales $600M (excluding Supreme sale) for FY 2025.
2. Debt down $587M yoy.
3. North Face DTC up 6%. US wholesale weak point.
4. $1.5B coming from sale of Supreme by eoy.
5. On track with $300M of cost cuts by eoy.
6. VANS – “while the headline numbers remain weak, several indicators are showing we’re heading in the right direction. EMEA is once again the region which is showing clear early encouraging signs with wholesale up in the quarter for the first time in six quarters with particularly positive momentum in key accounts.”
7. VANS – “our new products, which are performing well across regions. The Knu Skool continued to gain momentum and is
performing well across regions and is now the number two franchise globally.”
8. VANS – “new products and marketing efforts are resonating with consumers and contributing to further progress in Google search trends, which continue to move in the right direction across our markets.”
9. North Face – “Across both channels and regionally, the standout continues to be APAC, which grew strongly, up 35%, even as we comped the post-COVID opening quarter last year.”
10. VANS – “At Vans, we will see modest sequential improvement as we did this quarter.”
11. VANS – “The new platform in the Americas (adopted from Europe) is moving strongly in the right direction and at Vans, we’re seeing the progress we expected.”
13. VANS – “the new franchises are doing well. And we’ve now got two of our new franchises, I think, are in the top 5. So UltraRange and Knu Skool, one’s number two, one’s number 5.”
14. VANS – “Our grassroots campaign is well underway, as is our influencer campaign. You may have seen a few celebrities caught wearing Vans just recently. If you Google it, you’ll see it.”
15. VANS – “VF Corp. (VFC) “In terms of the turn – the Vans turn and the turn in general on the business, when do I forecast it happening? I’m not going to give you a number today, but I will tell you in October, we’ll be ready to talk about that. So I feel very good about the progress we’re making. It feels very similar to where I was when I was in my last company, and I feel like I can see it, and I feel good about it“
16. VFC – “something that some of you may not have realized, we are moving superfast here. And a lot of what we’re doing, for example, right now, I can’t tell you what we’re doing, but we’re doing a lot right now that we’re not disclosing. So for example, at this point last quarter, you didn’t know about Sun, you didn’t know about Caroline, you didn’t know about Supreme. And I’m not suggesting we’ve got people changes or portfolio changes coming. My point is we just got big activities that are happening all the time now and the pace is not going to let up.”
17. VANS plan – “So what are we doing? So we’re innovating and we’re also putting in franchise management. So innovating by bringing out new styles. So you’ve seen – you’re starting to see them come one at a time now, AVE 2.0, the Knu Skool, three new styles this quarter. And we’ll have more coming and then some really key collaborations to give energy. And then franchise management, where you’re going to see us take the gas out of some of the older styles for a while and then re-goose them when we first at the very top of the culture chain with key influencers and then flow them down. This is franchise management 101 plus innovation, which I think is really the model for growing a footwear brand.”
18 – Gross Margin – “we do expect gross margin to improve through the year.”
Now onto the shorter term view for the General Market:
The CNN “Fear and Greed” ticked up from 51 last week to 52 this week. You can learn how this indicator is calculated and how it works here: (Video Explanation)
The NAAIM (National Association of Active Investment Managers Index) (Video Explanation) rose to 74.68% this week from 56.57% equity exposure last week.
Our podcast|videocast will be out tonight. We’ll have a lot of great data to cover this week. Each week, we have a segment called “Ask Me Anything (AMA)” where we answer questions sent in by our audience. If you have a question for this week’s episode, please send it in at the contact form here.
Congratulations to all of the new clients that came in during our early Q1, Q2 and Q3 raises so far this year. We successfully closed out our Q3 raise for smaller ($1M-$5M) accounts in July.
Larger ($5-10M+) accounts can access “open enrollment” here.
