Macy's disappointed with its 4Q18 sales update which reverberated throughout the Retail sector. We used our text analytics platform to go through Macy's press release and the recent earnings from key players to come up with two key takeaways which should be no surprise to our faithful readers.
The Retail sector has been squarely on our radar throughout the holiday season, beginning with our warning that Black Friday optimism may be a misleading indicator given supply chain pressures, especially as mix shifts to e-commerce: see our Black Friday and Chico’s articles. Company updates this week support that concern, while layering on an additional headwind of weaker December demand.
Macy’s disappointing 4Q sales update yesterday triggered a wave of concern across the Retail sector. We analyzed this week’s sales updates across the Retail sector this week through Amenity Analytics’ NLP platform, and identified two key takeaways, which imply risk to both revenue and margins:
Macy’s sales update press release registered an Amenity Score of 23, compared to the average of Macy's prior four earnings calls of 49, with the company citing a slowdown following the Black Friday pop.
Most retailers have only released sales updates, with full financial results and commentary to come in the coming weeks. Given the evidence of ongoing mix shift to digital and e-commerce, we look for headwinds from supply chain, shipping, and transportation costs to remain prominent on Q4 earnings calls.
Bed Bath & Beyond (1/9/19):
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This communication does not represent investment advice. Transcript text provided by S&P Global Market Intelligence.
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