Fly News Breaks for March 20, 2017
Mar 20, 2017 | 06:41 EDT
Citi analyst Jim Suva placed Flex (FLEX) on his firm's Catalyst Watch list ahead of the company's investor day on May 10. The analyst expects Flex to highlight its sales and earnings opportunities from the Nike (NKE) relationship during the event. Nike in October 2015 announced a strategic partnership with Flex to automate its shoe manufacturing process. Suva sees the partnership driving sustainable growth for Flex and keeps a Buy rating on the shares with an $18 price target.
News For FLEX;NKE From the Last 2 Days
Oct 17, 2017 | 10:33 EDT
This morning, Morgan Stanley analyst Kimberly Greenberger told investors that her firm's latest apparel survey lends support to her belief that Amazon (AMZN) is quickly gaining traction at the expense of department stores and certain specialty retailers. This comes amid reports that Amazon has tapped some of the biggest athletic-apparel suppliers to make a foray into private-label sportswear. SURVEY SAYS: In a research note to investors this morning, Morgan Stanley's Greenberger pointed out that her firm's third annual AlphaWise apparel survey supports her thesis that Amazon is quickly gaining traction at the expense of department stores and select retailers. 69% of consumers surveyed bought apparel on Amazon.com over the last six months versus 59% last year, suggesting share gains could accelerate from here, she contended. Further, the analyst noted that Amazon leads the pack again with 61% net promoter score, more than twice Target's (TGT) 28% in second place and almost nine times the average score of the other 28 retailers included in the survey. Additionally, Amazon, Zara, and Wal-Mart (WMT) received the highest net purchase intentions over the next 12 months, but off-pricers such as Ross (ROST), Marshalls and TJ Maxx (TJX) took three of the top 10 spots, Greenberger pointed out, adding that Urban Outfitters' (URBN) Anthropologie, Abercrombie & Fitch (ANF) and Gap's (GPS) Banana Republic registered net purchase intention declines. The analyst also told investors that the survey showed that department stores continue to look particularly at risk to the "Amazon Threat," with Nordstrom (JWN) and Macy's (M) showing above average risk with elevated Amazon shopper overlap. APPAREL PUSH: Over the weekend, Bloomberg reported that Amazon had tapped some of the biggest athletic-apparel suppliers, enlisting vendors used by Gap and lululemon (LULU), to make a foray into private-label sportswear. Commenting on the news, KeyBanc analyst Edward Yruma told investors that Amazon making progress in developing an athletic line with key vendors is not a surprise given recent key hires and its strategic focus on apparel. However, the analyst noted that athletic apparel has some of the strongest brands, a significant focus on innovation, and pervasive low-cost alternatives. As such, while he is reticent to ever underestimate Amazon, Yruma argued that this is one category that it may have difficulty truly disrupting. Meanwhile, his peer at Cowen said that conversations with supply chain contacts indicate Amazon will be aggressive with pricing in the activewear market and is sourcing from similar fabric suppliers as Nike (NKE), lululemon and Under Armour (UAA). Additionally, analyst John Kernan noted that contacts also suggest Amazon may develop intimates, baby and basics, which is a risk to Hanesbrands (HBI) and Carter's (CRI). PRICE ACTION: In morning trading, Amazon is up about 0.5% to trade near $1,010 per share.
Oct 16, 2017 | 10:02 EDT
Cowen analyst John Kernan says conversations over the weekend with supply chain contacts indicate Amazon.com (AMZN) will be aggressive with pricing in the activewear market and is sourcing from similar fabric suppliers as Nike (NKE), lululemon (LULU) and Under Armour (UAA). Contacts also suggest Amazon may develop intimates, baby and basics, which is a risk to Hanesbrands (HBI) and Carter's (CRI), Kernan tells investors in a research note dated yesterday titled "Amazonian Apparel Is A Clear Negative For Mass Market Brands." He believes Amazon's announcement Friday that it will source, design and market an athletic apparel line is a "clear negative for the mass market area of the category." It will create additional supply and deflation in a category that already has "inventory piled high in the U.S. wholesale channel," Kernan argues.