Nomura Securities on Hardline Retail: Sales Analysis - Inventory vs. Velocity Comps
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Rating Summary:
0 Buy, 19 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Nomura Securities on Hardline Retail: Sales Analysis - Inventory vs. Velocity Comps
Analyst, Aram Rubinson, said, "Two components of comps are Inventory comp and Velocity comp (improved inventory productivity), where Velocity is more virtuous. Inventory has gone from driving more than 100% of the group’s comp in H1 2011 to 57% in Q4. In the past year, Family Dollar (NYSE: FDO), Advanced Auto (NYSE: AAP), Bed Bath & Beyond (Nasdaq: BBBY) and Amazon (Nasdaq: AMZN) relied heavily on the Inventory Comp component. Conversely, Dollar Tree (Nasdaq: DLTR), PetSmart (Nasdaq: PETM), AutoZone (NYSE: AZO) and Tractor Supply (Nasdaq: TSCO) boasted a balance of comps driven by Inventory and Velocity. O'Reilly (Nasdaq: ORLY) and Home Depot (NYSE: HD) saw nearly 100% of their comp driven by Velocity. Amazon has begun to use inventory less efficiently. We see that from this metric, too, as Velocity Comps fell 10% last year, with an even bigger decline in Q4."
Analyst, Aram Rubinson, said, "Two components of comps are Inventory comp and Velocity comp (improved inventory productivity), where Velocity is more virtuous. Inventory has gone from driving more than 100% of the group’s comp in H1 2011 to 57% in Q4. In the past year, Family Dollar (NYSE: FDO), Advanced Auto (NYSE: AAP), Bed Bath & Beyond (Nasdaq: BBBY) and Amazon (Nasdaq: AMZN) relied heavily on the Inventory Comp component. Conversely, Dollar Tree (Nasdaq: DLTR), PetSmart (Nasdaq: PETM), AutoZone (NYSE: AZO) and Tractor Supply (Nasdaq: TSCO) boasted a balance of comps driven by Inventory and Velocity. O'Reilly (Nasdaq: ORLY) and Home Depot (NYSE: HD) saw nearly 100% of their comp driven by Velocity. Amazon has begun to use inventory less efficiently. We see that from this metric, too, as Velocity Comps fell 10% last year, with an even bigger decline in Q4."
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