S&P 500   4,455.48 (+0.15%)
DOW   34,798.00 (+0.10%)
QQQ   373.33 (+0.09%)
AAPL   146.92 (+0.06%)
MSFT   299.35 (-0.07%)
FB   352.96 (+2.02%)
GOOGL   2,844.30 (+0.71%)
TSLA   774.39 (+2.75%)
AMZN   3,425.52 (+0.28%)
NVDA   220.81 (-1.78%)
BABA   145.08 (-4.04%)
NIO   35.38 (-1.75%)
CGC   13.91 (-4.46%)
GE   103.80 (+0.82%)
MU   74.05 (+0.01%)
AMD   105.80 (-0.33%)
T   27.13 (-0.22%)
F   13.78 (+0.51%)
ACB   5.95 (-3.25%)
DIS   176.00 (-0.14%)
PFE   43.94 (-0.57%)
BA   221.39 (+0.13%)
AMC   40.01 (+0.08%)
S&P 500   4,455.48 (+0.15%)
DOW   34,798.00 (+0.10%)
QQQ   373.33 (+0.09%)
AAPL   146.92 (+0.06%)
MSFT   299.35 (-0.07%)
FB   352.96 (+2.02%)
GOOGL   2,844.30 (+0.71%)
TSLA   774.39 (+2.75%)
AMZN   3,425.52 (+0.28%)
NVDA   220.81 (-1.78%)
BABA   145.08 (-4.04%)
NIO   35.38 (-1.75%)
CGC   13.91 (-4.46%)
GE   103.80 (+0.82%)
MU   74.05 (+0.01%)
AMD   105.80 (-0.33%)
T   27.13 (-0.22%)
F   13.78 (+0.51%)
ACB   5.95 (-3.25%)
DIS   176.00 (-0.14%)
PFE   43.94 (-0.57%)
BA   221.39 (+0.13%)
AMC   40.01 (+0.08%)
S&P 500   4,455.48 (+0.15%)
DOW   34,798.00 (+0.10%)
QQQ   373.33 (+0.09%)
AAPL   146.92 (+0.06%)
MSFT   299.35 (-0.07%)
FB   352.96 (+2.02%)
GOOGL   2,844.30 (+0.71%)
TSLA   774.39 (+2.75%)
AMZN   3,425.52 (+0.28%)
NVDA   220.81 (-1.78%)
BABA   145.08 (-4.04%)
NIO   35.38 (-1.75%)
CGC   13.91 (-4.46%)
GE   103.80 (+0.82%)
MU   74.05 (+0.01%)
AMD   105.80 (-0.33%)
T   27.13 (-0.22%)
F   13.78 (+0.51%)
ACB   5.95 (-3.25%)
DIS   176.00 (-0.14%)
PFE   43.94 (-0.57%)
BA   221.39 (+0.13%)
AMC   40.01 (+0.08%)
S&P 500   4,455.48 (+0.15%)
DOW   34,798.00 (+0.10%)
QQQ   373.33 (+0.09%)
AAPL   146.92 (+0.06%)
MSFT   299.35 (-0.07%)
FB   352.96 (+2.02%)
GOOGL   2,844.30 (+0.71%)
TSLA   774.39 (+2.75%)
AMZN   3,425.52 (+0.28%)
NVDA   220.81 (-1.78%)
BABA   145.08 (-4.04%)
NIO   35.38 (-1.75%)
CGC   13.91 (-4.46%)
GE   103.80 (+0.82%)
MU   74.05 (+0.01%)
AMD   105.80 (-0.33%)
T   27.13 (-0.22%)
F   13.78 (+0.51%)
ACB   5.95 (-3.25%)
DIS   176.00 (-0.14%)
PFE   43.94 (-0.57%)
BA   221.39 (+0.13%)
AMC   40.01 (+0.08%)

Mall Retailers: Two To Avoid, One To Buy

Monday, December 7, 2020 | Thomas Hughes
A Changing Landscape For Mall-Based Retailers
The mall-based brick&mortar retail industry has been on the rocks for years. The pandemic didn’t cause this problem it only accelerated a shift to digital and non-mall retailers that was already in place. What this means for many mall-based retailers is a lack of relevancy and an inability to reach their target markets. For some, it is an opportunity for growth. What’s the difference? In most cases, it comes down to eCommerce and category. If you operate in the right category and have a solid eCommerce presence business is booming. If not, well if not then the business isn’t so hot.

Ulta Beauty, Lack’s Brand Recognition

Ulta Beauty (NASDAQ:ULTA) is not an unknown operator but it is one, I think, with less brand-recognition than it needs to survive in today’s world. The company has a loyal following but not the kind of brand that can command the bulk of consumer dollars on name alone. Shoppers who turn away from in-store shopping at Ulta have a host of higher-profile brands and outlets for those brands with a stronger eCommerce presence to choose from. Ulta just can’t compete. An example? When I did a Google search for beauty products the Ulta Beauty website wasn’t even in the top ten.

The Q3 results were much better than expected but take that with a grain of salt. The company reported an acceleration of business from the 2nd quarter to the 3rd but revenue is still down nearly -8.0% on a YOY basis. The company’s comps fell 8.9% due to a double-digit decline in traffic partially offset by an increase in basket price. The worst part is that guidance is not good, either. The company sees comp declines accelerating to the 12% to 14% range and this may be conservative. COVID is spreading fast and the potential for store closures is growing.

Mall Retailers: Two To Avoid, One To Buy

Genesco Outperforms Consensus, Sales Down YOY

Genesco (NYSE:GCO), operator of Journey’s and other young-adult lifestyle brands, reported a better-than-expected Q3 but there are caveats. The primary is that net comps and revenue are down -11% on a YOY basis despite a strong showing in the eCommerce arena. eCommerce sales are up 62% on a YOY basis but not enough to overcome in-store weakness. This is important to note because much of Journey’s inventory can be purchased other places and specifically direct-from-the-source via eCommerce. Vans is only the most obvious choice, I myself get my Vans from Vans.com, and why not? You can get any style you want.

If you must buy into a name like this Tilly’s is a better choice. Tilly’s has its own apparel label to round out the offering of Vans and other branded items in the store, and at least the hope of a dividend. Tilly’s does not have a regular payment but it has been paying a special dividend annually in February. If they pay it this year in-line with the last it will be worth 11% in yield.

Mall Retailers: Two To Avoid, One To Buy

Williams-Sonoma Has What You Want

 Williams-Sonoma (NYSE:WSM) has a couple of things going for it that Genesco and Ulta do not. For one, they dominate a high-demand niche, home/lifestyle. For another Willams-Sonoma was a leader in eCommerce before the pandemic. The combination resulted in a surge in demand that has comps trending higher on a YOY basis and accelerating on a QoQ basis. The 3Q comps came in at +24% versus the consensus 10.2% with eCommerce growing 49%. eCommerce sales are just shy of 70% of the net revenue which is very important in the post-pandemic environment. This company is virtually immune to store closures.

Looking forward, the company failed to give near-term guidance but says mid-single-digit growth should be expected for the long-term. In addition, Williams-Sonoma is a strong, steady, and reliable dividend-payer with a yield near 2.0% and 14 years of consecutive increases. The payout ratio is a low 25%, the balance sheet is strong, and free-cash-flow is ample so investors should expect to see annual increases long into the future.

Mall Retailers: Two To Avoid, One To Buy

Should you invest $1,000 in Williams-Sonoma right now?

Before you consider Williams-Sonoma, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Williams-Sonoma wasn't on the list.

While Williams-Sonoma currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here

 


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Ulta Beauty (ULTA)2.2$382.13+0.4%N/A29.37Buy$407.71
Williams-Sonoma (WSM)2.4$191.24+1.4%1.23%15.21Hold$176.30
Genesco (GCO)1.9$60.41-3.6%N/A7.49Buy$57.50
Compare These Stocks  Add These Stocks to My Watchlist 

Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.