Congrats to Janet Yellen, she and her Fed friends once again told us that they definitely care about pushing equities prices higher -- without exactly saying it definitively. But, now the market looks poised to end the year on a high note, which means the strong likelihood of further buying right into early January. Nothing beats a feel-good start to the year, despite the emergence of cautious views of companies in recent weeks. And yes, currency translations matter when figuring out valuations of companies; I know many do not take the precious seconds and break apart where companies do business overseas and the associated currency impact.
But enough Fed talk for me this week, I am getting ready to end things with a flurry of Super Saturday weekend coverage. Here are some stories I will be watching.
Nike's Jordan Brand Remains a Gem for Investors
While I obviously went through Nike's (NKE) earnings searching for ruin, I think a discussion on the Jordan brand is important (and is a different topic to touch upon). One huge reason why Nike's stock has dunked in the face of the Dow Jones Industrial Average this year is that sales of Jordan-brand products continue to be on fire.
On its Nov. 21 earnings call, Foot Locker (FL) CEO Richard Johnson mentioned sales of products for the Jordan brand's "Big Three" (Kobe Bryant, Kevin Durant, and Lebron James) were "strong." As for Finish Line (FINL), its sales spiked in late September amid the release of a new retro Jordan sneaker. However, Finish Line did call out weak sales in some areas of Jordan, mostly a result of its strategic decision to take risks on unproven styles. My sense is that Foot Locker wins over Finish Line in the battle to sell ever more Jordan gear (I will be watching for that in the stores this weekend). Furthermore, I won't discount the potential for Jordan shops to open inside of Dick's Sporting Goods (DKS), which would be great news for the retailer (it has a ton of unproductive areas in its giant stores).
Nike is coy on the financial results for the Jordan brand. But sales of Jordan products are included within Nike's basketball category, where sales surged 19% last fiscal year. And all signs point to continued strong Jordan sales in 2015, as Nike is about to release a host of new products. On Dec. 24, Nike will release three new Jordan brand basketball sneaker styles: the Jordan Melo M11, the Jordan Superfly Fly 3 and the Jordan CP3. The pre-Christmas Day offerings will be closely followed by a new line of sneakers and apparel for young girls, around the age of 12, hitting the market in January.
Abercrombie & Fitch, How Bad Does It Get?
Everything I have seen regarding Abercrombie & Fitch (ANF) in the past three weeks -- from it donating excess clothes to the retiring of its weird, long-time CEO -- suggests the holiday season has gone very badly for the retailer. In fact, I think sales are trending so badly that the company will decide to raise debt in 2015 to quiet murmurs of a few investors getting concerned by two years of sales plunges. This weekend, the discounts at Abercrombie will be quite telling (I expect them to be high) as to how bad the situation is. How promotional Abercrombie is has direct implications on the tactics employed by Aeropostale (ARO), which is in bad financial shape entering 2015.
Are People Shopping in Lululemon?
There were strong suggestions by lululemon athletica's (LULU) management last week that its holiday quarter started stronger than implied by its below-consensus EPS guidance. I intend to spend time in the stores observing what is selling and what is not selling. I sense that a good deal of the newer product is being warmly received by the yoga faithful.
Did Lower Gas Prices End Up in Wal-Mart's Registers?
The direction of the stock price the past few months hints lower- to middle-income households are spending a bit more in the aisles of Wal-Mart (WMT). Now is the time to be on the lookout in the stores to see if it's true. I will be hunting for out-of-stock areas in seasonal goods to gauge whether Wal-Mart had a better-than-expected quarter. A year ago at this time, it had a decent amount of seasonal inventory on the sales floor, which went on to pressure margins for the fourth quarter (and contributed to a soft initial outlook for the new year).