Dick's CEO: "The Retail Industry Is In Panic Mode"

Discussion of current events
User avatar
Doc
Posts: 1853
Joined: Thu Dec 15, 2016 7:09 pm
Location: Cradle To Grave

Dick's CEO: "The Retail Industry Is In Panic Mode"

Post by Doc » Tue Aug 15, 2017 10:47 am

Hey did you hear the one about the Roman soldier left guarding the door at Pompeii?

http://www.zerohedge.com/news/2017-08-1 ... panic-mode
Dick's CEO: "The Retail Industry Is In Panic Mode"
Tyler Durden's picture
by Tyler Durden
Aug 15, 2017 1:38 PM

With Dick's stock crashing after reporting dreadful results this morning, in which both comp sales and EPS missed as the company slashed its full year guidance below even the lowest sellside forecast (it now sees full year EPS of $2.80 to $3.00, below the previous guidance of $3.65 to $3.75 and the Wall Street estimate of $3.62 ), the management team had no reason to hold back on today's earnings call, and luckily - unlike many other retailers who still hold out hope that the worst is behind them - it did not for an unvarnished look into the retail space.

Confirming just how little pricing power retailers have, CEO Edwart Stack said "we have conducted extensive consumer research, and the customers have told us they feel our prices are not competitive in today's environment" in which everyone is slashing price to capture market share, and as a result the company is "intentionally joining this battle, and we will aggressively be promoting our business to drive market share to our stores and online."

Stack said he observed heavier promotions and price cuts particularly on athletic apparel, electronics, and hunting, fishing and camping gear "it probably started in around Father's Day. We started to see this happening a little bit before Father's Day, and it continued to be very promotional, not only from retailers but also from some of the brands on a direct-to-consumer basis."

Having no other choice, Dicks has joined the battle of the "deep discounters", and has also launched a "best price guarantee" in which it promises customers that if they find a lower price on a product, Dick's will match it. Of course, by doing so, the retailer assures that both Dick's and its peers margins and net income shrink even more in the coming quarters.

Another major concern on the call - and to management - was the recent partnership between Amazon and Nike. Asked "how can you ensure that your positioning is still differentiated from that of the Amazon offering" the CEO responded: "We'll see how this goes. They've been transparent talking to us about this test, and I suspect it will probably go well, and then Nike will decide what they want to do about it and how they want to handle the balance of the market. Our relationship with Nike has been - has always been very good. It continues to be very good. We continue to work with them on shops, on our footwear decks and exclusive products. They are a strategic vendor of ours and we've got great relationship and what we're going to test and what they'll do ultimately we'll deal with that when it happens."

Speaking to CNBC, SW Retail Advisors' Stacey Widlitz said that "Dick's is another example of Amazon becoming the new middleman... Here we go down the gross margin rabbit hole just in time for the holidays."

Of course, if Nike ultimately decides to go exclusively with Amazon at least Dick's terminal suffering will be greatly shortened. Meanwhile, as the call went on, there was the following striking admission by the CEO:

"There's a lot of people right now, I think, in retail and in this industry in panic mode. There's been a difficult environment. I think people, I'm not going to speculate what they're thinking, but they seem to be in panic mode with how they're pricing product, and we think it's going to continue to be promotional and at times, irrational going forward."

* * *

Just in case the message was not clear the first time, there was more panic: "People need to get rid of the inventory, and then some people are panicked as to what's going to happen with their business from a growth standpoint."

* * *

And then, to top it off, just a little more: "What's going on in the marketplace right now is that it's just very promotional, almost panicked in some cases, I think, especially in the hunt, fish categories. There's a lot of inventory in the pipeline, and people need to move it out, and it's going to continue to be promotional until this inventory gets moved out of the pipeline"

* * *

Finally, one can't possibly use the word "panic" 4 times in a conference call without also adding the occasional "perfect storm", and sure enough:

"So I think it's just a perfect storm right now in retail, and I think sporting goods is in the center of it right now. There'll be further consolidation. We're seeing Gander Mountain closing right now. We'll see what happens with some other retailers, but it's a perfect storm right now. We're not particularly happy that we're in it."

Meanwhile, as the legacy retail sector implodes and as US households drown under a record amount of debt (the two may be connected), the Fed is confused why credit card defaults as mysteriously surging at a time when the US economy is supposed to be recovering...
“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

User avatar
Booklady
Posts: 656
Joined: Thu Dec 15, 2016 10:21 pm

Re: Dick's CEO: "The Retail Industry Is In Panic Mode"

Post by Booklady » Tue Aug 15, 2017 1:51 pm

Doc wrote:
Tue Aug 15, 2017 10:47 am
Hey did you hear the one about the Roman soldier left guarding the door at Pompeii?

http://www.zerohedge.com/news/2017-08-1 ... panic-mode
Dick's CEO: "The Retail Industry Is In Panic Mode"
Tyler Durden's picture
by Tyler Durden
Aug 15, 2017 1:38 PM

With Dick's stock crashing after reporting dreadful results this morning, in which both comp sales and EPS missed as the company slashed its full year guidance below even the lowest sellside forecast (it now sees full year EPS of $2.80 to $3.00, below the previous guidance of $3.65 to $3.75 and the Wall Street estimate of $3.62 ), the management team had no reason to hold back on today's earnings call, and luckily - unlike many other retailers who still hold out hope that the worst is behind them - it did not for an unvarnished look into the retail space.

Confirming just how little pricing power retailers have, CEO Edwart Stack said "we have conducted extensive consumer research, and the customers have told us they feel our prices are not competitive in today's environment" in which everyone is slashing price to capture market share, and as a result the company is "intentionally joining this battle, and we will aggressively be promoting our business to drive market share to our stores and online."

Stack said he observed heavier promotions and price cuts particularly on athletic apparel, electronics, and hunting, fishing and camping gear "it probably started in around Father's Day. We started to see this happening a little bit before Father's Day, and it continued to be very promotional, not only from retailers but also from some of the brands on a direct-to-consumer basis."

Having no other choice, Dicks has joined the battle of the "deep discounters", and has also launched a "best price guarantee" in which it promises customers that if they find a lower price on a product, Dick's will match it. Of course, by doing so, the retailer assures that both Dick's and its peers margins and net income shrink even more in the coming quarters.

Another major concern on the call - and to management - was the recent partnership between Amazon and Nike. Asked "how can you ensure that your positioning is still differentiated from that of the Amazon offering" the CEO responded: "We'll see how this goes. They've been transparent talking to us about this test, and I suspect it will probably go well, and then Nike will decide what they want to do about it and how they want to handle the balance of the market. Our relationship with Nike has been - has always been very good. It continues to be very good. We continue to work with them on shops, on our footwear decks and exclusive products. They are a strategic vendor of ours and we've got great relationship and what we're going to test and what they'll do ultimately we'll deal with that when it happens."

Speaking to CNBC, SW Retail Advisors' Stacey Widlitz said that "Dick's is another example of Amazon becoming the new middleman... Here we go down the gross margin rabbit hole just in time for the holidays."

Of course, if Nike ultimately decides to go exclusively with Amazon at least Dick's terminal suffering will be greatly shortened. Meanwhile, as the call went on, there was the following striking admission by the CEO:

"There's a lot of people right now, I think, in retail and in this industry in panic mode. There's been a difficult environment. I think people, I'm not going to speculate what they're thinking, but they seem to be in panic mode with how they're pricing product, and we think it's going to continue to be promotional and at times, irrational going forward."

* * *

Just in case the message was not clear the first time, there was more panic: "People need to get rid of the inventory, and then some people are panicked as to what's going to happen with their business from a growth standpoint."

* * *

And then, to top it off, just a little more: "What's going on in the marketplace right now is that it's just very promotional, almost panicked in some cases, I think, especially in the hunt, fish categories. There's a lot of inventory in the pipeline, and people need to move it out, and it's going to continue to be promotional until this inventory gets moved out of the pipeline"

* * *

Finally, one can't possibly use the word "panic" 4 times in a conference call without also adding the occasional "perfect storm", and sure enough:

"So I think it's just a perfect storm right now in retail, and I think sporting goods is in the center of it right now. There'll be further consolidation. We're seeing Gander Mountain closing right now. We'll see what happens with some other retailers, but it's a perfect storm right now. We're not particularly happy that we're in it."

Meanwhile, as the legacy retail sector implodes and as US households drown under a record amount of debt (the two may be connected), the Fed is confused why credit card defaults as mysteriously surging at a time when the US economy is supposed to be recovering...
After eight years of constant barrage on dissipating the earnings of the middle class, by Obama & company through their interminable anti-small business regulations and by passing of the very unaffordable Affordable Care Act, the Democrats assured the demise of the American Middle Class, and doing away with household purchasing power and disposable income.

So now more people are poor, and can't afford to buy from retailers. But, guess which retailers are doing great, Doc? Dollar Tree, Family Dollar, and Dollar General. These companies cater to the poor
A saucer of cream will do for me, thank you for your kindness.

User avatar
SteveFoerster
Posts: 1382
Joined: Thu Dec 15, 2016 7:17 pm
Location: Northern Virginia, USA and Dominica, West Indies
Contact:

Re: Dick's CEO: "The Retail Industry Is In Panic Mode"

Post by SteveFoerster » Tue Aug 15, 2017 2:33 pm

Booklady wrote:
Tue Aug 15, 2017 1:51 pm
After eight years of constant barrage on dissipating the earnings of the middle class, by Obama & company through their interminable anti-small business regulations and by passing of the very unaffordable Affordable Care Act, the Democrats assured the demise of the American Middle Class, and doing away with household purchasing power and disposable income.
No political conspiracy is required here, especially one that vastly overestimates the influence policymakers have over the economy. Amazon's superior business model killed them.
So now more people are poor, and can't afford to buy from retailers. But, guess which retailers are doing great, Doc? Dollar Tree, Family Dollar, and Dollar General. These companies cater to the poor
Which is another way of saying that these companies are better at discounting, and thus aren't as susceptible to being bulldozed by Amazon.
Writer, technologist, educator, gadfly.
President of New World University: http://newworld.ac

User avatar
Doc
Posts: 1853
Joined: Thu Dec 15, 2016 7:09 pm
Location: Cradle To Grave

Re: Dick's CEO: "The Retail Industry Is In Panic Mode"

Post by Doc » Tue Aug 15, 2017 6:15 pm

SteveFoerster wrote:
Tue Aug 15, 2017 2:33 pm
Booklady wrote:
Tue Aug 15, 2017 1:51 pm
After eight years of constant barrage on dissipating the earnings of the middle class, by Obama & company through their interminable anti-small business regulations and by passing of the very unaffordable Affordable Care Act, the Democrats assured the demise of the American Middle Class, and doing away with household purchasing power and disposable income.
No political conspiracy is required here, especially one that vastly overestimates the influence policymakers have over the economy. Amazon's superior business model killed them.
So now more people are poor, and can't afford to buy from retailers. But, guess which retailers are doing great, Doc? Dollar Tree, Family Dollar, and Dollar General. These companies cater to the poor
Which is another way of saying that these companies are better at discounting, and thus aren't as susceptible to being bulldozed by Amazon.
Amazon's predatory model. I noticed the other day that it seems in someone put stock in Amazon warehouses they can no longer link to their own web site. That if true means Amazon is talking a paths to eliminate their "partners" That is a monopoly
“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

User avatar
SteveFoerster
Posts: 1382
Joined: Thu Dec 15, 2016 7:17 pm
Location: Northern Virginia, USA and Dominica, West Indies
Contact:

Re: Dick's CEO: "The Retail Industry Is In Panic Mode"

Post by SteveFoerster » Wed Aug 16, 2017 1:50 pm

Doc wrote:
Tue Aug 15, 2017 6:15 pm
Amazon's predatory model.
There's nothing "predatory" about being better at something than the companies that came before you.
I noticed the other day that it seems in someone put stock in Amazon warehouses they can no longer link to their own web site. That if true means Amazon is talking a paths to eliminate their "partners" That is a monopoly
I actually wasn't able to parse what you were describing here, but no matter what you were saying, since Amazon has competitors in all of its categories, it's not a monopoly.
Writer, technologist, educator, gadfly.
President of New World University: http://newworld.ac

User avatar
Doc
Posts: 1853
Joined: Thu Dec 15, 2016 7:09 pm
Location: Cradle To Grave

Re: Dick's CEO: "The Retail Industry Is In Panic Mode"

Post by Doc » Wed Aug 16, 2017 5:49 pm

SteveFoerster wrote:
Wed Aug 16, 2017 1:50 pm
Doc wrote:
Tue Aug 15, 2017 6:15 pm
Amazon's predatory model.
There's nothing "predatory" about being better at something than the companies that came before you.
There is if you use the advantage of massive size to rig things in your favor.
I noticed the other day that it seems in someone put stock in Amazon warehouses they can no longer link to their own web site. That if true means Amazon is talking a paths to eliminate their "partners" That is a monopoly
I actually wasn't able to parse what you were describing here, but no matter what you were saying, since Amazon has competitors in all of its categories, it's not a monopoly.
It will have none pretty soon. Standard Oil had competitors in all it categories However Standard Oil competed in every category. It was a vertical monoply. With the added advantage that that David Rockefeller secured contracts with Rail Roads to transport it oil at prices available to its competitors. Meaning they had to sell to Standard Oil or could not get thier oil transported to markets by railroad at a competitive price.

In ecommorece there Amazon and Google dominates the market currently with a 54% market Share Amazon has a 30% market share. However Amazon instead of marketing only is a vertical model that Stores sells and transports products to market. The USPS delivers packages on Sundays for Amazon It also delivers Amazon packages first before it delivers other mail. No other company has anything like this advantage. Its next move is to eliminate the USPS and deliver products directly from its warehouse. It is pushing out competing retailers by its largess. Eventually Amazon will push Google under its thumb. And guess what? There will be no other place to get products from. The way it is going now I give it 2 years till it is clear to all that Amazon is the biggest monopoly in history.
“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

User avatar
Doc
Posts: 1853
Joined: Thu Dec 15, 2016 7:09 pm
Location: Cradle To Grave

Re: Dick's CEO: "The Retail Industry Is In Panic Mode"

Post by Doc » Fri Aug 18, 2017 7:25 am

https://www.cnbc.com/2017/08/18/foot-lo ... short.html

Foot Locker plunges 25% after sales fall way short of Street; Nike, Under Armour drop
“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

User avatar
Milo
Posts: 1246
Joined: Thu Dec 15, 2016 10:14 pm

Re: Dick's CEO: "The Retail Industry Is In Panic Mode"

Post by Milo » Sat Aug 19, 2017 11:23 am

In addition, the knock on of chains going broke is malls going broke.

From ‘Zombie Malls’ to Bonobos: What America’s Retail Transformation Looks Like

“Zombie malls,” as they are known, are increasingly dotting the suburban landscape. The lights are on, the escalators keep moving, but their purpose in life has gone. Burlington Center has less than 20 tenants — including a Sears and a Foot Locker — but once had more than 100. Last Wednesday a woman came to the mall looking for shoes, and left frustrated because the Payless store had just shuttered.

https://www.nytimes.com/2017/04/15/busi ... ation.html

User avatar
SteveFoerster
Posts: 1382
Joined: Thu Dec 15, 2016 7:17 pm
Location: Northern Virginia, USA and Dominica, West Indies
Contact:

Re: Dick's CEO: "The Retail Industry Is In Panic Mode"

Post by SteveFoerster » Sat Aug 19, 2017 1:02 pm

The mall in my area of Northern Virginia has basically closed. The stores died one by one, finally the interior of the mall was closed, then the Macy's closed, and now all that's open on the premises is a Sears. And considering that Sears is circling the drain nationwide, when they're your healthiest tenant, that's the end.

I think there's some plan to knock it down and replace it with some sort of mixed-use development, but I'm not sure.
Writer, technologist, educator, gadfly.
President of New World University: http://newworld.ac

User avatar
Milo
Posts: 1246
Joined: Thu Dec 15, 2016 10:14 pm

Re: Dick's CEO: "The Retail Industry Is In Panic Mode"

Post by Milo » Tue Sep 19, 2017 10:49 am

Toys 'R' Us files for bankruptcy protection in US

GlobalData Retail estimates that in 2016 about 13.7% of all toy sales were made online, up from 6.5% five years ago.

"A combination of high debt and severe structural changes in the industry created a toxic mix against which Toys 'R' Us had little choice but to restructure and try to put itself on a firmer footing," said Mr Saunders.

US clothing chains The Limited and Wet Seal filed for bankruptcy protection earlier this year, as did discount shoe retailer Payless.

http://www.bbc.co.uk/news/business-41316205

Post Reply