The inevitable disappearance of RadioShack (RSH) will cause a ripple effect for many companies. I spent a good portion of Wednesday digging into filings for RadioShack's top suppliers, to try to get percentages of business that RadioShack does with certain companies, and came up empty. Moreover, not one of RadioShack's suppliers wanted to confirm any data to me, simply saying their policy is not to issue such granular levels of disclosures. Whatever, guys.
Here is a simple list of companies at risk. I am eagerly awaiting one of these companies to say publicly that it's reducing shipment quantities to RadioShack.
- Sprint (S) (comment to me: "We don't provide that level of detail").
- AT&T (T) (comment to me: "We don't break out that detail").
- Verizon Wireless (comment to me: "We don't disclose data for our agents, nor do we break out results").
- Apple (AAPL)
- Garmin (GRMN)
- Hewlett-Packard (HPQ)
- Microsoft (MSFT)
- BlackBerry (BBRY) (comment to me: "We do not make our retail sales available").
- SanDisk (SNDK) (strikes me as having outsized risk).
The lack of disclosures by these companies will blow up in their faces when RadioShack releases a shocking statement to the market. I believe that will happen very shortly.
Chipotle's Stock Surge
The stock of Chipotle Mexican Grill (CMG) has surged 11.1% in the past month. Here are my thoughts on that move.
- Common-sense people: Chipotle has experienced no slowdown in traffic or demand since its highly publicized menu price increase. Consumers continue to view the brand as offering a strong value equation relative to all competitors, including those that aren't publicly traded and are strong in urban markets.
- New area of growth detected: Chipotle is quietly moving into malls, a lower-cost option in our view, compared with opening free-standing restaurants or those in outdoor centers. Looked at another away, Chipotle is preparing to drive stronger-than-expected return-on-investment metrics as the high level of traffic associated with the brand continues inside of a new enclosed setting. Obviously, the lack of resistance to fresh price increases enhances this ROI prospect.
Abercrombie & Fitch Share-Price Rip
At first, I thought the gains being notched in Abercrombie & Fitch (ANF) were solely due to the recent hiring of a new brand president who has considerable global experience. However, upon further reflection, the stock price action is suggesting that 2014 will be Mike Jeffries' final holiday season at the helm. That would be a great development for Abercrombie & Fitch shareholders.
Deckers Outdoor Action
Keep an eye on Deckers Outdoor (DECK). I have liked the action this week. This type of brand would fit nicely into the VF Corp. (VFC) portfolio, with cost synergies being realized from Timberland footwear.
Starbucks Bucks Inflation
Starbucks (SBUX) silently has a stock price fighting back to its 52-week high, despite inflation pressure in coffee bean costs. My sense is that the company's new initiatives in food and drinks are fueling transaction counts and average guest check.