GameStop Back to School
September has arrived and for millions of players the (well-deserved) holidays are also ending. Since it is already depressing not being able to spend your days at the beach, outdoors or in the mountains anymore, why not bring a little color and passion to school? GameStop has thought of just this: thanks to the Back to School promotion you will find, among the virtual and real shelves of the chain of stores, dozens of school accessories dedicated to your true passion: video games.At this address you can find all the new proposals for this year.
We are talking, for example, about the Minecraft diary or the Fortnite diary. In case you feel a little more revolutionary, the version of the Comix diary dedicated to the paper house is what you are looking for. Unless you want to show the world that you are a real sonar with the PlayComix diary. So you will have no excuse and you will have a nice place to diligently mark all the tasks and checks, so as not to become ... donkeys!
The PlayComix agenda 2021-2022 The selection goes on with backpacks and cases, of various sizes, shapes and colors, also dedicated in this case to Minecraft and Fortnite. All of these products are available in-store or online. As we said, at this address you can find all the Back to School accessories.
Did you know that GameStop has the Regalla Edition of Horizon Forbidden West in Italian exclusive?
Content in collaboration with GameStop .
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Back-to-School Boom: A Closer Look At Same Store Sales Data
The July revealed a drop of 1.1%, disappointing analyst expectations, as spending on goods fell from June’s lofty levels. Consumers ventured out to bars and restaurants, but online shopping dipped a material 3.1% month-on-month. The market will soon shift its focus to how the back-to-school season unfolded amid rising COVID-19 Delta variant cases.
Many unknowns lie ahead through year-end. With supply-chain bottlenecks and labor shortages still impacting the domestic economy, this year’s holiday shopping season will be particularly uncertain:
For insight into these concerns, traders will want to pay close attention to Same Store Sales (SSS) data, upcoming retail earnings reports and consumer-related conferences to manage risk.
Same Store Sales Data Coverage
Wall Street Horizon provides institutional investors with more than 40 corporate event types, including SSS data. Over time, many companies transitioned from disclosing SSS each month to simply including the sales numbers in quarterly earnings reports. Several retailers still issue monthly reports, including Costco (NASDAQ:), PriceSmart (NASDAQ:) and The Buckle (NYSE:). Traders must monitor the earnings calendar for when market-moving SSS news strikes.
With nearly 90% of companies beating on Q2 earnings estimates, it’s even more important to dig into sales and EPS data to determine which firms are truly outperforming. If a company beats on the bottom line but has SSS results that fall short of expectations, that’s a red flag for investors.
Back-To-School
Kicking things off with the back-to-school season—Walmart (NYSE:)’s showed strong sales related to school spending. It’s not a surprise considering American consumers are flush with cash following the litany of economic aid packages since March 2020. Bolstering demand in July was the commencement of monthly Child Tax Credit payments focused on low to middle-income families. As a result, Walmart reported a 5.2% increase in comparable-store sales. Target’s comp-store sales came in at +8.9% driven entirely by traffic, according to the August 18 report. Shoppers appear to be aggressive as the academic year gets under way.
Beyond the quarterly earnings reports from America’s big-box retailers, we can look to the National Retail Federation (NRF) annual Back-to-School 2021 report. The NRF survey found that families with children in elementary through high school plan to spend an average of $849 on school-related items, up $59 from last year. Total seasonal spending is estimated to register at $37.1 billion, up more than 9% from a year ago, according to the NRF. A slightly smaller percentage uptick is forecast for college-related spending.
It’s not a slam dunk, however. There was some uncertainty among analysts heading into this spending season as last summer’s buying spree might have pulled forward sales of big-ticket items such as laptops. Traders will want to pay close attention to sales reports of retailers big and small in the coming weeks to see if those concerns verify. While Q4 garners the most attention, some Consumer Staples and Discretionary companies produce bigger profits in advance of the school year than during the holidays. Now is crunch time for retail.
Shoppers have likely noticed a drop in promotions over the last several months. Retailers know that consumers are going to be aggressive this season (as the NRF record sales forecast shows). Tight inventories are also playing a pivotal role in the decrease in promos, according to the Census Bureau’s August 17 report. This is yet another contributor to a potentially strong back-to-school shopping season, but if inventories deplete, it could have negative implications for the retail industry. There is much uncertainty amid high hopes for consumer spending.
Looking Ahead
Following what is poised to be a record back-to-school shopping season, how the school year unfolds is still unknown. Plans were to have traditional in-person learning, but the pandemic once again surprised us in a negative way. Rising Delta variant cases have already prompted the corporate world to delay plans to return to the office. (After all, if students are sent back home to virtual learning, many parents cannot commute to the office.) A worsening of the COVID situation would undoubtedly be a boon to online retail at the expense of brick and mortar. It’s yet another risk to consider.
While Q2 earnings season is mostly in the books, there are still key retailers yet to report. Below are some of the most important reports to gauge the state of the consumer.
Aug. 24: Best Buy, Urban Outfitters,
Best Buy (NYSE🙂 is confirmed to report Q2 earnings Tuesday before the market opens which will include SSS. A conference call with analysts takes place at 8 a.m. Eastern Time. WSH projects BBY’s Q3 report will be released on Nov. 23. Best Buy is particularly important because of laptop sales—electronics is the lead spending category during the back-to-school shopping season. Laptop purchases are expected to clock in at more than $16 billion, according to the NRF seasonal survey.
A stylish wardrobe is a must for students! Urban Outfitters (NASDAQ:) and Nordstrom (NYSE🙂 report after the bell on Tuesday with conference calls immediately following their respective releases. These two retailers will shed light on the strength in clothing sales during the back-to-school season, the second leading spending category this time of year.
Aug. 26: Abercrombie & Fitch, Gap
We’ll get further insight into Q2 clothing and accessories spending on Thursday when Abercrombie & Fitch (NYSE🙂 reports in the morning and Gap Inc (NYSE🙂 in the afternoon. While these figures will not include August sales, the market will have more clarity on the strength of the shopping season was once these reports hit the street.
Sept. 1: Costco
Costco (NASDAQ:) is confirmed to report August SSS next Wednesday After Market. The $200-billion market cap consumer staples firm is confirmed to report its Q4 earnings report on Thursday, Sept. 23, after the market close with a conference call to follow. September SSS is scheduled for release on Oct. 6. This will be among the first true gauges at the state of the consumer and U.S. economy for August.
September 2: The Buckle
Investors will get another glimpse of August spending in Buckle’s (NYSE🙂 SSS report next Thursday. While just a $2.2-billion market cap teen apparel retailer, its July SSS report included a massive 33.8% sales gain versus a year ago and a whopping 38.8% jump from the same period in 2019. Comparing sales to 2019 is a helpful tactic to gauging true changes due to quirky base effects of 2020. September SSS is scheduled for release on Oct. 7.
Sept. 7: GameStop
Few stocks are as volatile as GameStop (NYSE:). Traders should prepare for important news on Tuesday, Sept. 7, as GME reports Q2 earnings after the market close. Shares fell hard following its Q4 2020 and Q1 2021 earnings releases earlier this year. On March 24, GME lost one-third of its market cap. In June, the Q1 report resulted in a post-earnings day crash of 27%.
Figure 1: GME stock price from Q4 2020 (March 23) earnings release through Q1 2021 earnings release reaction (June 10)
Sept. 29: Bed Bath & Beyond
Another look at August spending will come from Bed Bath & Beyond’s (NASDAQ:) Q2 report for the period ending Aug. 28. Despite getting caught up in Meme Stock Mania earlier this year, BBBY is a solid proxy for apartment and dorm furnishing sales. It reported a strong Q1 top line number, but earnings were somewhat soft due to high SG&A expenses. BBBY reports before the market open on the 29th and it will be one to watch to reveal how much Americans splurged on furnishing dorms for this fall.
Oct. 28: Ethan Allen
Looking further out, Wall Street Horizon set an Unconfirmed Earnings Date of Oct. 28 after the market close for Ethan Allen (NYSE:). ETD has been in the news recently for undergoing a name change to avoid confusion with in the cryptocurrency space. ETD also announced a special dividend to be paid on Aug. 31. This retailer of furnishings and accessories will provide a peek into September sales during its Q1 2022 fiscal year report.
It’s not always about fundamentals—the chart below displays an uncanny relationship between ETD (formerly “ETH”) and (the short-hand for Ethereum). With the new ticker, perhaps the confusion goes by the wayside, and ETD once again trades on the strength and quality of its sales and earnings.
Figure 2: ETD and Ethereum Correlation
ETD And Ethereum Combined Daily Chart.
Retail Conferences
Additional insight will be gained from a slew of important retail conferences in the coming months. We gather and provide conference event details to clients. Often, breaking news from executives occurs at these corporate events.
Sept. 9: Goldman Sachs 28th Annual Global Retail Conference
Sept.14: Scotiabank 25th Annual Back to School Conference
Nov. 16: Jefferies West Coast Consumer Conference 2021
Nov. 17-18: Bank of America Consumer and Retail Conference 2021
Nov. 30: Morgan Stanley Global Consumer and Retail Conference
Our Q3 2021 Investor Conference Summary highlighted a broad list of major events beyond the retail industry.
Holiday Shopping Season
Investors should pay close attention to guidance and expectations regarding this year’s holiday shopping season. With a backdrop of supply chain bottlenecks, labor shortages, elevated inflation and Delta variant fears, it’s unknown how retail sales will unfold. Wall Street Horizon has a beat on when to expect reports from the world’s biggest retailers. Stay tuned for updates from us on what events to keep on your radar as Q4 approaches.
Conclusion
Investors have never seen this kind of retail spending environment. Despite a slightly softer than expected July retail sales report, earnings among retail firms big and small have been stellar. Pent-up demand and tremendous excess savings should drive impressive revenue figures both via store traffic and online. There is no shortage of unknowns, however. Delta variant’s spread, tight inventories due to supply chain disruptions, delays in a return to the office, and other risks loom. Traders must closely monitor key events such as same store sales data and retail conferences to manage risk.