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Macro slowdown forces investors to focus on company strategies

"Over 150 consumer-oriented public and private companies will make presentations before investors, analysts, traders and executives in Orlando, Fla at the 21st annual ICR Conference. However, before these presentations, companies including Urban Outfitters, American Eagle Outfitters, Lululemon Athletica, and Abercrombie & Fitch Co. will issue certain pre-announcements. The Conference will be held between January 14-16, 2018. Public company presentations will be held on the first two days while discussions with private companies will be held on the final day."

 

Macro slowdown forces investors to focus on company strategies 002Over 150 consumer-oriented public and private companies will make presentations before investors, analysts, traders and executives in Orlando, Fla at the 21st annual ICR Conference. However, before these presentations, companies including Urban Outfitters, American Eagle Outfitters, Lululemon Athletica, and Abercrombie & Fitch Co. will issue certain pre-announcements.

The Conference will be held between January 14-16, 2018. Public company presentations will be held on the first two days while discussions with private companies will be held on the final day. Company slide shows at the presentations will feature business updates and strategic plans for the coming year, or longer term.

A strong line up of speakers

Various retail-related names like branded or specialty apparel companies will deliver speeches at the ICR. DA Davidson analyst John Morris expects investors to focus on company strategies in the event of a macro slowdown, including plans for cost cutting.

In addition, buying plans for the second half of the year may also be high on investors’ minds., Morris sees a risk “becauseMacro slowdown forces investors to focus on company strategies 001 most companies are likely extrapolating recent healthy Fall and Holiday demand into next year and if demand doesn’t follow through, margins could come under pressure from promotions.” Moris says rising labor costs will likely be a top issue this year. Early reads on Spring selling will also be of interest. In addition, he will be looking for any shift in the negative sentiment that has prevailed over the branded apparel sector.

According to Jefferies retail analysts, the conference will not reverse the “challenged” sentiment around the specialty softline retailers, which stems from tough holiday and first- quarter comparisons and uncertainty around expenses. But “a string of positive pre-announcements could help partially re-assure the market. Potential 2019 expense headwinds (wages, freight, shipping, tariffs, investments in marketing and e-commerce) are likely to be other key topics of investor interest, outside of a read on sales trends.

Telsey Advisory Group’s Dana Telsey expects a fairly positive tone from specialty retailers at the event. But, with 13 companies that Telsey covers falling an average of 23 percent in the fourth quarter of 2018, clearly there are likely to be major concerns.

Doubts revolve around whether sales strength in the fourth quarter and the new year can flow to the bottom line given labor, freight, and trade costs, as well as digital and marketing investments. Telsey also noted that sales and margin comparisons will become more challenging through 2019 and investors will seek color on the ability to drive leverage while e-commerce continues to grow as a percentage of the overall mix and as the one-time benefit of tax reform anniversaries in the new year.

 

 
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