The Weekly Consensus

The Weekly Consensus

Maeghan Thompson

Story of the Week

Fast fashion retailer Shein confidentially files for London IPO as U.S. listing stalls

Shein, the fast fashion giant with links to China, has confidentially filed for a public listing in London as it faces backlash in the U.S., a person familiar with the matter told CNBC. The person was granted anonymity in order to speak freely about the discussions, which are private. The company had confidentially filed for a U.S. initial public offering in November but began looking toward London after it failed to win the support of American lawmakers. Elected officials in the U.S. have repeatedly expressed concerns about the use of forced labor in Shein’s supply chain and its use of a U.S. tax law exemption known as de minimis. Under the provision, packages valued at less than $800 are not charged import duties and aren’t subject to the same levels of oversight from U.S. customs, which is tasked with screening packages to ensure items from banned regions don’t come into the country.

Apparel & Footwear

Levi’s shares drop 15% as jeans maker’s sales disappoint despite denim craze

Denim is having a moment with consumers, but it hasn’t led to a major sales boost at Levi Strauss. The jeans creator posted fiscal second-quarter revenue that fell just short of Wall Street’s expectations at a time when shoppers are stocking their wardrobes with denim dresses, skirts and ultra low-rise baggy pants. Levi’s posted better-than-expected earnings as its direct sales to consumers and cost cutting continue to bear fruit. The company raised its dividend by 8% to 13 cents per share, its first increase in six quarters. Still, shares fell about 15% in extended trading.

H&M shares plunge on doubts over full-year margin target, June sales outlook

Shares of H&M plunged more than 14% after the company reported a smaller-than-expected increase in second-quarter profits and cast doubt over its June sales and full-year profit margin target. The stock pared losses slightly to trade down 13% by 9:00 a.m. London time. The world’s second largest retailer said operating profit for the period between March and May came in at 7.1 billion Swedish kroner ($672 million), below the 7.37 billion Swedish kroner anticipated by analysts, according to an LSEG poll cited by Reuters. The second-quarter result was nevertheless above the 4.7 billion Swedish kroner recorded in the same period last year.


Athletic & Sporting Goods

Nike warns of guidance cut as it posts slowest non-pandemic sales gain in 14 years

Nike reported its slowest annual sales growth in 14 years, excluding the Covid-19 pandemic, as the sneaker giant warned of “challenges” that led it to cut its current year outlook. “We are driving better balance across our portfolio. While we are encouraged by our progress, our fourth quarter results highlighted challenges that have led us to update our Fiscal ’25 outlook,” finance chief Matthew Friend said in a news release. “We are taking actions to reposition NIKE to be more competitive, and to drive sustainable, profitable long-term growth.”

Under Armour to pay $434M to settle lawsuit that claimed Kevin Plank misled investors

Under Armour is moving to settle a class action lawsuit from 2017 that accused CEO Kevin Plank and former Chief Financial Officer Chip Molloy of misleading investors, according to a company press release. If approved, Under Armour would pay $434 million to buyers of its stock between Sept. 16, 2015, and Nov. 1, 2019, to resolve the claims. As part of the deal, which admits no wrongdoing, Under Armour agrees to keep separate the roles of CEO and chair of the board for “at least” three years, per an SEC filing. All stock benefits granted to its CEO, CFO and chief legal officer during that time will also include a performance-based vesting condition set by the board of directors.


Outdoor Tech Firm Kalkomey Acquired by PE Firm Macquarie

Kalkomey, a nearly 30-year-old Texas firm that sells outdoor certification courses used by states, has a new owner, Macquarie Capital.  This latest deal involves two increasingly active parts of government technology: private equity and recreation.  Australia-based Macquarie Capital, the main investing arm of Macquarie Group, takes control of the company from Boston-based private equity firm Cove Hill Partners. It bought Kalkomey in 2020, an early move in what has become an ongoing rush of private equity cash into gov tech.

Crunch Fitness Franchise Group Lands Investment To Grow in Southeast

JF Fitness of North America, a Crunch Fitness franchisee operating gyms in Virginia, Maryland and the Carolinas, has received fresh private equity funding and become one of the five largest Crunch Fitness franchisees with 24 gym locations following its acquisition of fellow Crunch franchisee Team Roldan.  Recent investments from Trive Capital, a Dallas-based private equity firm, and 808 Capital Partners will support JF Fitness in expanding its footprint in the Southeast with new gym openings and select acquisitions.  With the new funding, JF Fitness acquired Team Roldan’s eight Crunch gyms in Alabama, Georgia and South Carolina, and is eyeing further growth.

Cosmetics & Pharmacy

Function Health Raises $53 Million in Series A Funding Round as Longevity Movement Gains Momentum

Function Health has closed a US$53 million Series A funding round led by Andreessen Horowitz Bio + Health. A slew of celebrities and prominent wellness personnel also participated, including Matt Damon, Kevin Hart, Zac Efron, Pedro Pascal and Jay Shetty, among others. According to a report published by Athletech News, biomarker testing is trending amid the growing longevity movement. Function will use the investment to scale its technology and increase testing access, per Athletech News.

L Catterton acquires Naomi Watts’ Stripes Beauty

Stripes Beauty, the wellness lifestyle brand founded by actress and women’s health advocate Naomi Watts, has been acquired by private equity firm L Catterton, according to a company press release. As part of the deal, Stripes Beauty has named ex-Revlon CEO Debra Perelman as its executive chair. Cara Kamenev, a former L’Oréal executive, was also named president. With the new investment, Stripes Beauty will expand into sleep support products with the launch of Dream Date, a natural supplement featuring melatonin, magnesium and red clover. The company also plans to expand its presence on Amazon and its own DTC channels, as well as launch on QVC and in Canada later this year, per the announcement.

Walgreens stock plunges as drugstore chain slashes profit guidance in ‘challenging’ consumer environment

Shares of Walgreens plunged more than 20% after the company reported fiscal third-quarter earnings that fell short of expectations and slashed its full-year adjusted profit outlook, citing a “challenging” environment for pharmacies and U.S. consumers. The retail pharmacy giant now expects fiscal 2024 adjusted earnings of $2.80 to $2.95 per share. That compares with the company’s previous outlook of between $3.20 and $3.35 per share. ″’We assumed … in the second half that the consumer would get somewhat stronger” but “that is not the case,” Walgreens CEO Tim Wentworth told CNBC.

Consumers splurge on cosmetics online despite inflation: report

While inflation-sensitive consumers are trading down on certain online purchases, they are splurging in the cosmetics category, per a new report from Adobe Analytics. Online shopping data covering the first five months of 2024 reveal that consumers are trading down in categories like groceries, electronics and apparel, but are trading up to buy such luxury beauty items as fragrances and lipsticks. During the period, consumers spent $16.3 billion online on cosmetics, up 8.8% year over year. That compares with a 3.2% year-over-year increase for electronics and 2.9% rise in apparel.

Herbivore Botanicals hires Supergoop marketing chief as CEO

Herbivore Botanicals has named Britany LeBlanc as Chief Executive Officer. LeBlanc joins the company from Supergoop where she held the role of Chief Marketing Officer. Co-founder Alexander Kummerow is also stepping up his daily responsibilities at the brand. According to a report published by WWD, LeBlanc is charged with growing her team to support marketing and growth strategies. WWD reveals that the brand has made these leadership appointments in anticipation of its next phase of growth.


Discounters & Department Stores

Walmart Deals Event to Compete With Amazon Prime Day

Walmart has announced a deals event that will rival and debut ahead of Amazon Prime Day. Walmart Deals will feature deep discounts on thousands of items for back-to-school, tech, toys, outdoor, travel, and other categories. Beginning Monday, July 8, at 5 p.m. EST through Thursday, July 11, at 11:59 p.m. ET, customers can shop thousands of deals and save hundreds of dollars. Walmart+ members will have early access to shop the best deals of the season beginning at noon EST on July 8, allowing them to browse and buy five hours before anyone else. Unlike Prime Day, this Walmart sales event will be open to all shoppers, not just those with a paid membership. Prime Day caters to those who purchase an Amazon Prime membership.


Walmart going digital with shelf price tags

Walmart is going digital with how it displays prices on in-store products at some locations. Walmart said 2,300 stores across the U.S. will be saying goodbye to paper shelf price tags and making the switch to digital ones. The transition at those stores, which the Arkansas-based retailer announced this month, will occur within the next two years. The technology enables workers to make price changes “with a few clicks” and do other things, according to Walmart.



Emerging Consumer Companies

Away expands into soft-side luggage

Away is making a major category expansion to target the travel market as a whole. The nine-year-old travel company debuted its Softside luggage collection, a pivotal category expansion for Away after establishing its roots in hard-shell luggage. According to Away’s chief executive officer, Jen Rubio, the category expansion is meant to target the roughly 50 percent of travelers who prefer soft-side luggage versus a hard-shell style. Away’s Softside collection offers four styles: The Softside Large, The Softside Medium, The Softside Bigger Carry-on and The Softside Carry-on, which is based on Away’s bestselling and original style. The luggage is offered in four colorways — jet black, coast blue, cloud gray and clay pink — and ranges in price from $225 to $325. The collection will be available at Away stores and website starting July 9.

Hero Bread Raises $21 Million

Hero Bread, a California brand producing an artisanal line of low-carb and high nutrition baked goods, has raised $21 million to fuel their product innovation and retail expansion. This funding round, co-led by Cleveland Avenue, DNS Capital, and Composite Ventures with additional participation from existing investor Greatpoint Ventures, is set to accelerate the company’s mission of delivering nutrient-rich bread to a wider audience. Founded in 2021, Hero Bread first entered the market at select Subway restaurants. It quickly went viral with early backing from athletes Tom Brady and Kevin Durant, as well as recording artists, including The Weekend.

Heyday Health Raises $12.5M

Heyday Health, the nation’s first virtual-forward value-based care provider focused on Medicare and dual-eligible patients, announced today that it has raised $12.5 million from Gradient Ventures – Google’s early stage fund, Lionbird, a large national payor, Great Oaks Capital, and Kate Ryder, CEO of Maven Clinic. The funding will enable Heyday to expand its mission to provide Medicare and dual-eligible patients with high-quality, accessible, and compassionate care from the comfort of their homes. Heyday’s virtual-forward model starts with a comprehensive physical, behavioral, and social assessment conducted in patients’ homes, or wherever they call home. Every patient enjoys 24/7 access to a personalized care team comprised of a physician, a nurse practitioner, and a Health Ally that works with them to design and manage care plans that strive to keep them happy, healthy, and at home.



Food & Beverage

Engelman’s Baking buys bread and rolls maker

Engleman’s Baking Co., a wholesale baking company offering a line of fresh and frozen bread products, has acquired St. Armands Baking Co. from Hyde Park Capital. Financial terms of the transaction were not disclosed. Headquartered in Bradenton, Fla., St. Armands began as a retail cake and pastry shop in St. Armands Key, which is in central Florida. The company was acquired by the Vroom family in 1981, at which point its focus shifted to production of bread and rolls and it transformed into a wholesale baking operation. St. Armands’ distribution gradually expanded to include restaurants, hospitals, nursing homes, schools, office buildings, sports arenas and ball parks.

Lassonde to acquire Summer Garden Foods for $235 million

Canadian food and beverage company Lassonde Industries Inc. plans to acquire Summer Garden Food Manufacturing, a US-based specialty food manufacturer and distributor, for $235 million in cash. Based in Boardman, Ohio, and operated by The Zidian Group, Summer Garden develops, manufactures and markets sauces and condiments, including tomato and cream-based pasta sauces, as well as barbecue sauces, dipping sauces and dressings under the Gia Russa, Little Italy in the Bronx and G Hughes (sugar-free barbecue sauce) brands. Its roughly 250 products are sold in more than 20,000 locations. Rougemon-based Lassonde noted that Summer Garden also serves as a co-packer for “well-known brands.”

Rise Baking Company Acquires US Peer Table Talk Pies

Private-equity backed Rise Baking Company has acquired fellow US business Table Talk Pies. The deal gives Minneapolis, Minnesota-based Rise Baking access to an additional three manufacturing facilities, taking the group’s total to 20 across the US and Canada. Family-owned Table Talk Pies in Worcester, Massachusetts, produces freshly made snack and dessert pies supplied across the US, as well as exported to Canada, Mexico and Puerto Rico. The business was set up in 1924. Backed by private-equity investor Olympus Partners since 2018, Rise Baking did not reveal the price it has paid for the peer business, which employs more than 300 staff.

UK plant-based meat startup THIS has raised £20M ($25.4M) in a Series C funding round

THIS, the London-based producer of meat analogues, has closed a £20M Series C round led by European impact investor Planet First Partners. The financing involved a combination of primary and secondary equity financing, and brings total investment into the startup to £35M ($44.5M). Its previous investors include BGF, Backed VC, FiveSeasons Ventures, Idinvest Partners, Manta RayVentures, Seedcamp, ITV and footballer Chris Smalling (among others).



Grocery & Restaurants

Jim Pattison Group acquires Save Mart

The Jim Pattison Group, a Canadian conglomerate operating multiple businesses in Canada and the U.S., has acquired Save Mart Cos. from the private equity firm that has owned the retailer since 2022. The current management team of Save Mart, including Executive Chairman Shane Sampson, will remain in place, a spokesperson for Save Mart told Supermarket News. Modesto, Calif.-based Save Mart operates nearly 200 supermarkets under the Save Mart, Lucky, FoodMaxx, and Maxx Value banners in California and Nevada. The retailer had been owned by private equity firm Kingswood Capital Management since 2022. Save Mart was founded by Nick Tocco and Mike Piccinini in 1952 and operated by the Piccinini family as California’s largest family-owned grocer up until its acquisition by Kingswood Capital Management.

Home & Road

Natuzzi returns to profitability in Q1, with strong showing for retail

Luxury Italian furniture supplier and retailer Natuzzi reported €84.5 million in invoiced first quarter sales, just slightly lower than the €86.1 million reported the same time last year. The company returned to profitability, recording a €600,000 gain compared with a €2.1 million loss last quarter and a €900,000 loss the same time last year. Gross margin improved slightly, growing to 36.9% from last year’s 35.6%. Gross margin has been consistently improving for the company since 2019. The company continued with its long-term restructuring efforts, reducing headcount by 94 for the quarter “to increase competitiveness and enhance margin generation.” Its total headcount is now 18% lower than it was in 2021. Retail is a continued focus, with sales climbing 13.6% from last year and 10% from 2022. In North America, directly-operated store sales grew 29.8% from last year. The company’s branded invoiced sales amounted to €76 million, compared to €77.5 million last year. Unbranded sales came in at €6.4 million, a slight dip from last year’s €6.5 million.

Design house Thibaut acquires assets of high-end designer

Design house Thibaut has acquired the assets of Rosemary Hallgarten, a designer and supplier of exclusive luxury rugs, fabrics, and accessories with an established reputation in the interior design community, for an undisclosed sum. Hallgarten will remain with the company as its chief creative officer. “Rosemary Hallgarten is one of the most compelling luxury brands in the design industry,” said Rick Kilmer, Thibaut CEO. “The opportunity to not only expand the current business but also work with Rosemary to unlock even more experiential creativity is an opportunity that rarely comes along.” Kilmer said Thibaut is excited to partner with Rosemary and her entire team to leverage the company’s recent investments in infrastructure and talent.

Sales fall for MillerKnoll in Q4, but increased orders boost outlook

Office and contract furniture giant MillerKnoll reported $888.9 million in fourth quarter net sales, a 7.1% decline from the same time last year. The company has reported several declines in a row, including an 11% dip last quarter and an 11.4% decline in the second quarter. Sales fell in two of the company’s three segments – Americas Contract (-12.2%) and Global Retail (-7.2%) – while rising in International Contract (+3.2%). Last quarter, sales fell in all three. There were some positives. Orders rose 1.1% for the quarter overall, while rising more prominently in Americas Contract, climbing 5.7% year-over-year and 14.3% from last quarter. Gross margin also improved, rising 250 base points to 39.6%. Margin gains were attributed to the realization of price and channel optimization strategies, cost synergies and continued reduction in freight and distribution costs. Last quarter, gross margin improved 450 basis points to 38.6%. For the full year, net sales fell 8.4%.

British luxury furnishings retailer exiting U.S. business

British luxury home furnishings brand Oka has ceased operations in the U.S., and its Oka USA subsidiary and certain of its affiliates filed for Chapter 7 protection in the U.S. Bankruptcy Court for the Northern District of Texas on June 11. The filing is part of the London-based company’s restructuring plan, organized as a company voluntary arrangement, put in place to reconfigure and reduce its cost base and restructure its balance sheet. The CVA was approved by Oka’s creditors on June 27. With the CVA now approved, Investindustrial, the company’s shareholder, has agreed to provide further funding to the company totaling £4 million to support the restructuring.

Jewelry & Luxury

De Beers’ Rough Diamond Sales Sink 31%

Rough diamond sales remained slow in the fifth sales cycle of the year for De Beers Group, with the company’s CEO saying he expects the recovery in demand to take time. The diamond miner and marketer reported Wednesday that rough diamond sales in its fifth sales cycle of 2024 totaled $315 million, down 31 percent from $456 million in cycle 5 2023, and down 18 percent from the previous sales cycle ($383 million). De Beers’ 2024 rough diamond sales are now about 20 percent behind where they were at this time last year. Year-to-date, the company has sold $1.95 billion in rough, compared with $2.43 billion following the fifth sales cycle of 2023. In the company’s statement on its latest rough diamond sales, CEO Al Cook noted that sales generally slow down when it is summer in the Northern Hemisphere.

Jewelry a Top Performer in ‘Stalled’ Luxury Market, Says Bain & Co.

Bain & Company’s “Luxury Goods Worldwide Market Study,” released last week in collaboration with Altagamma, shines a light on the state of the luxury industry. The global luxury market had a record-breaking performance in 2023 in spite of geopolitical and economic issues, reaching more than €1.5 trillion ($1.6 trillion) in sales. The growth was spurred by the resurgence of luxury travel as well as a strong U.S. holiday season in Q4. However, macroeconomic pressures have led to a slowdown across most regions in the first quarter of 2024, said the study. The “stalled” luxury goods market is facing a dilemma of catering to its big spenders versus reaching new audiences, it said.


Office & Leisure

Chewy stock pops 34% after Roaring Kitty posts a dog picture, then gives it all back

Chewy shares rallied dramatically after meme stock leader Roaring Kitty posted a picture on social media platform X that resembled the logo of the online pet food retailer, but the gains were quickly erased later in the session. Roaring Kitty, whose legal name is Keith Gill, has stirred up trading in speculative names such as GameStop by posting cryptic images and memes online. A picture of a cartoon dog appeared on his X feed, briefly driving up Chewy shares as much as 34% to $39.10. The stock later fell into negative territory again in the session, closing the day down 0.3%.

MGM Acquiring Tipico’s US Sportsbook Operations

MGM Resorts International announced that it’s acquiring the US iGaming and sportsbook operations of Tipico Group. Financial terms of the transaction weren’t revealed. The Las Vegas-based casino giant said its LeoVegas Group unit is the entity acquiring the aforementioned Tipico assets. MGM acquired LeoVegas in 2022 for more than $600 million. “This acquisition is the second major investment by LeoVegas, following the acquisition of game developer Push Gaming in 2023. The acquisition will allow LeoVegas to operate a purpose-built proprietary sportsbook across all international markets and brands, with the exception of those exclusive to the BetMGM JV, with a focus on a clean, fast consumer experience with top-class product, pricing and functionality,” according to a statement issued by MGM.

Chewy to Repurchase $500 Million of Shares from BC Partners

Chewy, Inc. has agreed to repurchase an aggregate of 17,550,000 shares of its Class A common stock, par value $0.01 per share, at a price per share of $28.49, resulting in an aggregate repurchase price of approximately $500 million from Buddy Chester Sub LLC, which is an entity affiliated with funds advised by BC Partners Advisors LP, Chewy’s largest shareholder. The repurchased shares will be cancelled and retired upon completion of the Repurchase. Chewy believes the Repurchase is an accretive use of capital and provides an efficient mechanism to repurchase shares at a discount to the current market price, while further reducing the ownership position of the Company’s largest shareholder.

Technology & Internet

Amazon plans discount store in bid to fend off Temu and Shein

Amazon plans to launch a new section on its site dedicated to low-priced fashion and lifestyle items that will allow Chinese sellers to ship directly to U.S. consumers. The storefront, announced at an invite-only conference for Chinese sellers on Wednesday, would mark Amazon’s most aggressive attempt yet to fend off growing competition from e-commerce upstarts Temu and Shein, which both have ties to China, the world’s second-largest economy. Temu and Shein have expanded their presence in the U.S. in recent years, luring an increasing share of American shoppers with their rock-bottom prices on clothing, electronics, home goods and other products. Amazon’s storefront will feature a range of unbranded items, many priced under $20, according to a presentation to Amazon sellers. Amazon will ship the products directly from China to the U.S., with the goal of delivering them to shoppers within nine to 11 days.


TikTok to compete with Amazon Prime Day through its own July sale

TikTok on Thursday announced it will launch a U.S. summer sale dubbed “Deals for You Days,” which is positioned to compete with Amazon’s annual Prime Day. Starting July 9, TikTok Shop will be offering sales on thousands of items, including clothing, beauty products, books and decor. The announcement comes just two days after Amazon revealed that its annual Prime Day mega sale will take place on July 16-17 this year. The success of Prime Day, which Amazon introduced in 2015, has pushed several other retailers to hold competing sales. Companies that have recently announced July sales include Walmart, Target and Best Buy. The social media platform first introduced the TikTok Shop in September 2023 as an in-app shopping experience, capitalizing on the #TikTokMadeMeBuyIt trend. Content creators can sell products through the shop, and TikTok users can make purchases directly through the app.


Finance & Economy

US inflation cools in May; consumer spending rises moderately

U.S. prices were unchanged in May while consumer spending rose moderately, a trend that could draw the Federal Reserve closer to start cutting interest rates this year.  The flat reading in the personal consumption expenditures (PCE) price index last month followed an unrevised 0.3% gain in April, the Commerce Department’s Bureau of Economic Analysis said. In the 12 months through May, the PCE price index increased 2.6% after advancing 2.7% in April.  Inflation is receding after spiking in the first quarter as 525 basis points worth of rate hikes from the U.S. central bank since 2022 cool domestic demand. Inflation, however, continues to run above the Fed’s 2% target.

Home prices begin to cool as active listings jump 35%

Some of the heat is coming out of home prices, even though they’re still higher than they were a year ago.  Several new reports show that price gains are shrinking and home sellers are starting to give in after a stagnant spring market.  For the first time since the start of the Covid-19 pandemic, when home sales ground to a halt, the typical house sold for slightly less than its asking price — 0.3% lower — during the four weeks ended June 23, according to real estate brokerage Redfin. A year ago at that time the typical home was selling at list price. Two years ago it was selling at about 2% above list price.