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Q2 GDP: Choo Choo

The FED might be winning the war on inflation. Their preferred metric for inflation the PCE Inflation Index surprised below expectations at 4.1%. PCE inflation…

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The FED might be winning the war on inflation. Their preferred metric for inflation the PCE Inflation Index surprised below expectations at 4.1%. PCE inflation is now at the lowest reading since 2021. The trend is finally our friend!

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Prices as of 4 pm EST, 7/27/23

Macro

Rainy day funds at America’s biggest banks might be getting bigger.

  • Under new rules proposed by US regulators, banks with over $100 billion in assets would need to raise their capital requirements by ~20%.

  • The bigger the bank, the bigger the requirement.

  • The goal is to mitigate operational risk across activities like lending, trading, and so on.

  • Banks oppose the move, naturally, arguing the measures are extreme and would prove more costly than expected, ultimately hurting consumers.


To quote Fed Chair Powell, the labor market is “very tight”.

  • Last week’s data did nothing to change that with initial jobless claims falling well below expectations to their lowest in 5 months.

  • And workers aren’t staying unemployed for long as continuing claims dropped to the fewest in 6 months.

  • Another sign that demand for labor remains high? Close to 5% of job postings in the US feature a signing bonus

    That’s more than 2x the pre-pandemic average of 1.8%, according to Indeed.


For an economy feared to be on the brink of a recession, the US looks to be full steam ahead.

  • After growing at a 2% pace in the first 3 months of the year, GDP expanded at 2.4% in Q2, crushing expectations of 1.8%.

  • Highlighting the print was the largest growth in business spending in 6 quarters.

  • Personal consumption also outpaced estimates, showing resilience among consumers.

  • Meanwhile, core PCE prices—which the Fed watches closely—fell more than expected to 3.8% (vs. 4% est).

Full story available on Benzinga.com

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Apparel Retailer Express Moving Toward Bankruptcy

Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning…

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Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning acknowledged the company made some missteps: Among other factors, there was a misalignment between its assortment and customer demand, Retail Dive's Nate Delesline reports.

An Express storefront at King of Prussia mall in Pennsylvania. The retailer said this week that it plans to initiate an international brand expansion starting next year

Express took a hit during the pandemic as its core offering — business casual — fell out of favor as work-from-home surged.

“Unfortunately, my previous assessment of Express’ fragile financial situation leading to a possible bankruptcy due to declining revenue, gross margin profits and ballooning debt of $280 million is a foregone conclusion,” Shawn Grain Carter, a retail industry consultant and professor at the Fashion Institute of Technology at the State University, said in an email to Retail Dive. “With high-interest rates, the retail company must decide between the ‘lesser of two evils.’ Moreover, until they fix the waning consumer demand for their merchandise and elevate the brand and product mix, financial wizardry will not resolve their retail woes.”

Over the past several years, the company has undergone a number of changes as it works to improve its performance. Last January, WHP Global closed on a strategic partnership with Express. The two entities formed an intellectual property joint venture under which WHP contributed $235 million for a 60% stake, while Express retained the remaining 40%. The two entities in November announced plans to expand Express internationally, including in Indonesia and Paraguay, and grow its presence in Central America and Mexico. 

And after the New York Stock Exchange warned of a potential delisting in late March, Express executed a 1-for-20 reverse stock split, which decreased outstanding shares to 3.7 million from 74.9 million. That stock split enabled Express to regain listing compliance with the New York Stock Exchange. Around the same time, Express said it planned to cut 150 jobs by the end of the third quarter.

The company also expanded its portfolio last year through a deal with WHP to acquire Bonobos from Walmart for $75 million. That acquisition helped guide the retailer to a 5% year-over-year uptick in Q3 net sales to $454.1 million from $434.1 million a year earlier. However, comparable sales for Express stores and e-commerce fell 4% and net loss grew to $36.8 million from $34.4 million in the year-ago period. Inventory was also up 14% for the quarter, rising to nearly $481 million from $422.7 million a year earlier. 

“Express has the right building blocks in place with a strong portfolio of brands, a high-potential partnership with WHP and a premier omnichannel platform,” Glendinning said in the earnings announcement. “Our efforts to unlock our full potential and improve our performance are already underway.”

The apparel retailer in late November lowered its full-year 2023 guidance, now expecting net sales to be between $1.84 billion and $1.87 billion, with Bonobos driving $150 million in net sales. 

Finally, on Friday, Bloomberg reported that at least one lender to Express has approached the retailer to put aside a pool of money for expenses tied to a potential future bankruptcy filing.

A demand to set aside so-called cash reserves, if enforced, could push Express into Chapter 11 as it would eat into limited liquidity available for necessary payments to vendors, landlords and other parties.

Creditors have been growing increasingly antsy and considering whether to push the company to file for bankruptcy, Bloomberg previously reported.

Express, which is burning through a short supply of cash as it attempts to fix troubled operations, is looking to avoid any move to fund reserves for as long as possible, other people familiar with the matter said. The retailer lost over $150 million in three quarters through late October as it faced an escalating competitive threat from fast-fashion rivals.

Tyler Durden Fri, 02/23/2024 - 18:00

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Apparel Retailer Express Moving Toward Bankruptcy

Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning…

Published

on

Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning acknowledged the company made some missteps: Among other factors, there was a misalignment between its assortment and customer demand, Retail Dive's Nate Delesline reports.

An Express storefront at King of Prussia mall in Pennsylvania. The retailer said this week that it plans to initiate an international brand expansion starting next year

Express took a hit during the pandemic as its core offering — business casual — fell out of favor as work-from-home surged.

“Unfortunately, my previous assessment of Express’ fragile financial situation leading to a possible bankruptcy due to declining revenue, gross margin profits and ballooning debt of $280 million is a foregone conclusion,” Shawn Grain Carter, a retail industry consultant and professor at the Fashion Institute of Technology at the State University, said in an email to Retail Dive. “With high-interest rates, the retail company must decide between the ‘lesser of two evils.’ Moreover, until they fix the waning consumer demand for their merchandise and elevate the brand and product mix, financial wizardry will not resolve their retail woes.”

Over the past several years, the company has undergone a number of changes as it works to improve its performance. Last January, WHP Global closed on a strategic partnership with Express. The two entities formed an intellectual property joint venture under which WHP contributed $235 million for a 60% stake, while Express retained the remaining 40%. The two entities in November announced plans to expand Express internationally, including in Indonesia and Paraguay, and grow its presence in Central America and Mexico. 

And after the New York Stock Exchange warned of a potential delisting in late March, Express executed a 1-for-20 reverse stock split, which decreased outstanding shares to 3.7 million from 74.9 million. That stock split enabled Express to regain listing compliance with the New York Stock Exchange. Around the same time, Express said it planned to cut 150 jobs by the end of the third quarter.

The company also expanded its portfolio last year through a deal with WHP to acquire Bonobos from Walmart for $75 million. That acquisition helped guide the retailer to a 5% year-over-year uptick in Q3 net sales to $454.1 million from $434.1 million a year earlier. However, comparable sales for Express stores and e-commerce fell 4% and net loss grew to $36.8 million from $34.4 million in the year-ago period. Inventory was also up 14% for the quarter, rising to nearly $481 million from $422.7 million a year earlier. 

“Express has the right building blocks in place with a strong portfolio of brands, a high-potential partnership with WHP and a premier omnichannel platform,” Glendinning said in the earnings announcement. “Our efforts to unlock our full potential and improve our performance are already underway.”

The apparel retailer in late November lowered its full-year 2023 guidance, now expecting net sales to be between $1.84 billion and $1.87 billion, with Bonobos driving $150 million in net sales. 

Finally, on Friday, Bloomberg reported that at least one lender to Express has approached the retailer to put aside a pool of money for expenses tied to a potential future bankruptcy filing.

A demand to set aside so-called cash reserves, if enforced, could push Express into Chapter 11 as it would eat into limited liquidity available for necessary payments to vendors, landlords and other parties.

Creditors have been growing increasingly antsy and considering whether to push the company to file for bankruptcy, Bloomberg previously reported.

Express, which is burning through a short supply of cash as it attempts to fix troubled operations, is looking to avoid any move to fund reserves for as long as possible, other people familiar with the matter said. The retailer lost over $150 million in three quarters through late October as it faced an escalating competitive threat from fast-fashion rivals.

Tyler Durden Fri, 02/23/2024 - 18:00

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Uncategorized

Apparel Retailer Express Moving Toward Bankruptcy

Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning…

Published

on

Apparel Retailer Express Moving Toward Bankruptcy

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning acknowledged the company made some missteps: Among other factors, there was a misalignment between its assortment and customer demand, Retail Dive's Nate Delesline reports.

An Express storefront at King of Prussia mall in Pennsylvania. The retailer said this week that it plans to initiate an international brand expansion starting next year

Express took a hit during the pandemic as its core offering — business casual — fell out of favor as work-from-home surged.

“Unfortunately, my previous assessment of Express’ fragile financial situation leading to a possible bankruptcy due to declining revenue, gross margin profits and ballooning debt of $280 million is a foregone conclusion,” Shawn Grain Carter, a retail industry consultant and professor at the Fashion Institute of Technology at the State University, said in an email to Retail Dive. “With high-interest rates, the retail company must decide between the ‘lesser of two evils.’ Moreover, until they fix the waning consumer demand for their merchandise and elevate the brand and product mix, financial wizardry will not resolve their retail woes.”

Over the past several years, the company has undergone a number of changes as it works to improve its performance. Last January, WHP Global closed on a strategic partnership with Express. The two entities formed an intellectual property joint venture under which WHP contributed $235 million for a 60% stake, while Express retained the remaining 40%. The two entities in November announced plans to expand Express internationally, including in Indonesia and Paraguay, and grow its presence in Central America and Mexico. 

And after the New York Stock Exchange warned of a potential delisting in late March, Express executed a 1-for-20 reverse stock split, which decreased outstanding shares to 3.7 million from 74.9 million. That stock split enabled Express to regain listing compliance with the New York Stock Exchange. Around the same time, Express said it planned to cut 150 jobs by the end of the third quarter.

The company also expanded its portfolio last year through a deal with WHP to acquire Bonobos from Walmart for $75 million. That acquisition helped guide the retailer to a 5% year-over-year uptick in Q3 net sales to $454.1 million from $434.1 million a year earlier. However, comparable sales for Express stores and e-commerce fell 4% and net loss grew to $36.8 million from $34.4 million in the year-ago period. Inventory was also up 14% for the quarter, rising to nearly $481 million from $422.7 million a year earlier. 

“Express has the right building blocks in place with a strong portfolio of brands, a high-potential partnership with WHP and a premier omnichannel platform,” Glendinning said in the earnings announcement. “Our efforts to unlock our full potential and improve our performance are already underway.”

The apparel retailer in late November lowered its full-year 2023 guidance, now expecting net sales to be between $1.84 billion and $1.87 billion, with Bonobos driving $150 million in net sales. 

Finally, on Friday, Bloomberg reported that at least one lender to Express has approached the retailer to put aside a pool of money for expenses tied to a potential future bankruptcy filing.

A demand to set aside so-called cash reserves, if enforced, could push Express into Chapter 11 as it would eat into limited liquidity available for necessary payments to vendors, landlords and other parties.

Creditors have been growing increasingly antsy and considering whether to push the company to file for bankruptcy, Bloomberg previously reported.

Express, which is burning through a short supply of cash as it attempts to fix troubled operations, is looking to avoid any move to fund reserves for as long as possible, other people familiar with the matter said. The retailer lost over $150 million in three quarters through late October as it faced an escalating competitive threat from fast-fashion rivals.

Tyler Durden Fri, 02/23/2024 - 18:00

Read More

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