HLG - Hallenstein Glassons Holdings

[Basil]

I know maximum 15% in one stock.

Naughty dog has gone to 20%.  Sometimes the opportunity is so compelling you have to break your own rules 

[Whome]

I'm now comfortably overweight HLG. Roll on Feb 17. Have to keep taking a peak back at Winner's Earnings vs SP graph and Basil's calculations. Could call it confirmational bias but it feels good to me when there is little else on the market to match those historical vs forecast prospects. 😊

[winner (n)]

Retail sales still booming in Australia - no worries over there

Amazing post lockdown spending eh

'Clothing' line shown for obvious reasons - see clothing sector growth finally caught up to overall spend

Source - ASB Retail sales

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[Basil]

Looks good Winner.  All those young people out and about enjoying themselves after years of Covid "controls".
Who can blame them.  Most young people brush off Covid like its just a cold in a few days so the target market for HLG is well and truly over the lockdown nonsense and just want to get back to enjoying their lives again and look cool doing it. 
Good thing about that strong Australian retail trade data is we know Glassons Au will be growing their market share as well.

[winner (n)]

Westpac Card Tracker says retail spend still pretty strong (post Christmas and Boxing Day) 

They say - The bottom line though is that despite sharply higher interest rates and very weak sentiment, consumers have still be spending strongly through the Christmas-New Year period with underlying momentum showing only a very mild impact from these wider pressures to date. 

Glassons AU will be doing well (I said that, not Westpac)

[Perky]

Winner...sorry newbie question but I know your all over this stuff.

I've been reading all these retail figures being released all around the world. All seem reasonable strong..which I find surprising especially discretionary retail

Are these reported retail figures real or nominal? And is this something that would be consistent across

major markets like aus, us, uk, nz or does the reporting of it vary market to market and maybe I shouldn't believe everything I read?

Thank you in advance.

[winner (n)]

Winner...sorry newbie question but I know your all over this stuff.

I've been reading all these retail figures being released all around the world. All seem reasonable strong..which I find surprising especially discretionary retail

Are these reported retail figures real or nominal? And is this something that would be consistent across

major markets like aus, us, uk, nz or does the reporting of it vary market to market and maybe I shouldn't believe everything I read?

Thank you in advance.

Generally retail sales reporting globally is in nominal ($ of the day) terms.

Stats NZ do report sales in 2010 prices as a indication of volume (ie real / inflation adjusted basis). Other countries produce these as well

You'd be pretty safe to assume that when you read about sales in economic commenatary / media it would be in nominal terms unless specifically stated otherwise

Be funny if companies reported sales after inflation eh

[Perky]

Thank you for your reply Winner

[Fiordland Moose]

I was reviewing a handful of my Australian positions and as part of that did a bit of work on underlying volumes in the Australian retail market. Thought I'd share as Australian retail relevant to a number of NZX listed firms eg Hallenstein Glassons, KMD, MHJ etc.

I find it interesting to look at volumes as opposed to nominal sales as I think it gives a better indication of underlying activity. Found on the Australian Bureau of Statistics a quarterly timeseries of seasonally adjusted volumes by retail segment - perfect. I indexed the values to the beginning of 2000 and calculated the volume trend to the end of 2019 (to avoid contaminating the trend with all the lockdowns, rebounds, QE and other oddities occurring since).

Below are the seasonally adjusted volumes and associated trend the clothing+accessories+shoes segment indexed to the start of 2000, with the consistent growth pattern leading to 0.98 r2 in the trendline - incredibly strong - which tells us the trend definitely means something.

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Then I dropped in the actual retail volumes to 30 September 2022, and rolled forward the previous trend line without updating it for the actual data from January 2020 to September 2022 to get a sense of how current clothing retail volumes compare to the pre covid trend line. This is below.

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Clothing retail volumes in the September quarter were up over 21% from their pre covid trend. In all the historic data there hasn't been another data point whose variation above trend was this high.

My review of the October and November seasonally adjusted sales (including inflation) was robust so I'd assume that trend continues and perhaps widens in the December quarter.

So Aussie going gangbusters.

But given that very strong correlation in the volume trend, I can't help but wonder if a reversion to trend (or overshooting to below trend as is often the case) could unfold. I find this quite influential and informs my perspective on the maintainability of Aussie retail volumes, particularly over recent trading periods. High volumes lead to high rebates and lower discounting....falling does the inverse exacerbating the impact on margins together with the fall in sales.

Can't help but wonder if OZ will follow NZ in the retail space, and the last 12 months have been a temporary overperformance in line for a large fall. Or who knows, some may argue the world has changed and the shift to above trend growth is permanent.

All musings, but interesting to ponder, particularly if you are looking to make long term investments with spare dosh or a current holder in the sector. Random perspectives...do your own research...the ABS is a wonderful tool.

[Waltzing]

FM your saying people went out after lockdowns and shopped till  they dropped....

BOS are great .. but notice a german data scientist in NZ outperformed the NZ Stats for inflation modelling...

from his home office... good story anyway

That little spike up is interesting.. some good stats people here and many thanks..

 

[winner (n)]

One of Oz papers was going on about this bath full of spare cash consumers had ....but the bath is getting pretty close to empty

I think he was trying to say the boom times are over ....and punters could even revert to making do with the clothes they bought and not buying anymore new gear for a while

[Fiordland Moose]

Check out the super retail group trading update

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02621195-2A1425631?access_token=83ff96335c2d45a094df02a206a39ff4

Macpac killing it. Read thru for KMD?

Great result. On the other hand baby buntings dived yeaterday.

[Waltzing]

Rebel is for basic stuff... high end brands like  FITTOOLS dont think they stock...

[winner (n)]

FM - chart with NZ data

Much the same except last couple of years not as volatile as OZ

NZ long term CAGR 3.3% pa ... what is it on your OZ data ... seems a bit less?

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[Basil]

Glassons AU doubled their share last 4 years so expect them to double share again in say 3 years ... to 1.5%

That's about $400m of sales .... just from Glassons AU

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Stat's above posted by FM need to be considered in light of Glassons Au market share gains over the last 5 years, posted by Winner late last year, as above.

I like the carefully planned and prudent way they're expanding their retail footprint in Australia, without any debt, (cash on hand at balance date amounted to 59 cps). 

I don't think anyone is expecting full year sales to be up the same as the 41% year to date announced in mid-December.  I am forecasting FY23 sales growth of 24% and expecting a somewhat softer second half, albeit not as soft as the market appears to be expecting.  Importantly the second half laps a period of substantial Omricon concern where at times for example we had more than 20,000 cases a day here in the same second half period last year.