Investors, analysts, traders and executives will gather in Orlando, Fla., next week to hear presentations by more than 150 consumer-oriented public and private companies at the 21st annual ICR Conference. But before their appearance near Disney World, companies including Urban Outfitters Inc., American Eagle Outfitters Inc., Lululemon Athletica Inc., and Abercrombie & Fitch Co. are expected to issue pre-announcements.
The meeting runs Jan. 14 to Jan. 16. Public company presentations are scheduled for the first two days, and private-company talks will be held the final day. Company slide shows typically feature business updates and strategic plans for the coming year, or longer term. Pre-announcements have been known to happen at the conference, or ahead of company’s meetings.
Branded or specialty apparel companies are among various retail-related names that’ll speak at ICR. DA Davidson analyst John Morris expects investors to focus on company strategies in the event of a macro slowdown, including plans for cost cutting, according to a Jan. 9 note, before Macy’s Inc. and Kohl’s Corp. on Thursday disappointed investors with holiday sales updates.
In addition, buying plans for the second half of the year may also be high on investors’ minds. Here, Morris sees a risk “because most companies are likely extrapolating recent healthy Fall and Holiday demand into next year and if demand doesn’t follow through, margins could come under pressure from promotions.”
Rising labor costs will likely be a top issue this year, Morris said, citing retail industry sources. Early reads on Spring selling will also be of interest. In addition, he will be looking for any shift in the negative sentiment that has prevailed over the branded apparel sector.
Jefferies retail analysts don’t believe the conference will reverse the “challenged” sentiment around the specialty softline retailers, which stems from tough holiday and first- quarter comparisons and uncertainty around expenses. But they do think “a string of positive pre-announcements…could help partially re-assure the market,” they wrote in a note dated Jan. 8.
Potential 2019 expense headwinds (wages, freight, shipping, tariffs, investments in marketing and e-commerce) are likely to be other key topics of investor interest, outside of a read on sales trends, Jefferies said.
Elsewhere, Telsey Advisory Group’s Dana Telsey expects a “fairly positive tone” from specialty retailers at next week’s event. But, with 13 companies that Telsey covers falling an average of 23 percent in the fourth quarter of 2018, “clearly there are concerns,” she wrote.
Doubts revolve around whether sales strength in the fourth quarter and the new year can flow to the bottom line given labor, freight, and trade costs, as well as digital and marketing investments. Telsey also noted that sales and margin comparisons become more challenging through 2019 and investors will seek “color on the ability to drive leverage while e-commerce continues to grow as a percentage of the overall mix and as the one-time benefit of tax reform anniversaries in the new year.”
Here’s a list of some specialty apparel stocks to watch at the conference. They are listed by date and time for which the presentation is expected to begin, based on the ICR agenda.
Presentations are divided into 30-minute sessions, many of which are webcast. Some companies hold breakout sessions and are available for one-on-one meetings.