July Equity Analyst Insights
This month features insights on: Samsung, Target, Memory, SharkNinja, Adobe, Rivian, Asos and the growing popularity of gin. Cheers!
For additional notes on Freshpet, please contact us.
Freshpet, Inc. (FRPT): NielsenIQ RMS data is well positioned to capture Freshpet sales in tracked Grocery, Mass, Club, and Pet Specialty stores. FRPT stock is currently performing well, up +52% YTD and growing as it reaches 2.5-year highs.
RMS sell-through data correlates well with FRPT reported Net Sales as key retailers for the company are included in our tracked data. Additionally, NIQ e-receipt data tracks Freshpet online purchases through merchants like Target (TGT), Walmart (WMT), and Instacart (CART). Interestingly, the first half of 2024 saw an increase in the number of FRPT items purchased online through WMT, potentially reflecting the trade-down of more affluent consumers to value retailers like Walmart.
Samsung?(005930.KS): GfK data continues to show sharp y/y declines for the brand’s low-end Galaxy A series, as Chinese vendors take share from Samsung in emerging regions and the latest generation models trail their predecessors.
Target (TGT): Target’s initiative to lower prices primarily for products in the grocery segment started late last May.
Despite sales falling in May and in Q1, the Grocery & Gourmet Food segment seems to be benefiting from the aforementioned price decreases aimed at alleviating inflationary pressures on customers. Grocery & Gourmet Food increased MoM in item quantity sold share to 44.4% (a YoY growth of +1.8%). For Item $ Total Sold share, this is the first time since April 2023 that YoY change has been positive for Grocery & Gourmet Food.
Memory (MU, 000660.KRX, 005930.KRX): Tracked smartphone DRAM and NAND bit demand trends remain ahead of industry expectations, as content growth continues to be robust in both low-end and high-end devices
Spirits Category (DEO, RI.PA): According to NielsenIQ RMS Beverage Alcohol data, gin, among the major popular spirits, is the only spirit that has been driving a positive YoY % change in Average Unit Price since March 2023.
This positive trend seems to be driven by gin brands with lower price points, such as Gordon’s London Dry Gin from Diageo (DEO) and Seagram’s Gin from Pernod Ricard (RI.PA). Gin is gaining popularity potentially due to its unique flavor profile from juniper berries. It has also gained more traction in cocktail bars, as more gin-based cocktails appear on menus.
SharkNinja (SN): GfK data showed greater-than-anticipated share gains for SharkNinja in Small Appliances across W. Europe, largely thanks to the brand’s expanding presence in new countries.
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SharkNinja’s share in the region soars to a record high in 2Q, led by Air Fryer sell-out ramping up in new geographies while sales in other product categories improve as brand awareness spreads.
ADOBE (ADBE): ADOBE (ADBE): Adobe reported a record F2Q billings high, which was consistent with the strong momentum seen in the GfK Distributor data.
GfK expects this trend to continue into F3Q, driven by Creative Cloud for Teams, which is benefiting from the incorporation of Adobe’s generative AI tool Firefly into this enterprise solution.
Rivian Automotive, Inc. (RIVN): NielsenIQ E-Receipt data shows an acceleration in R1T orders in the second half of May 2024. This follows a price reduction for inventory vehicles and certain battery pack trims.
Although the EV market has cooled in 2024, customers have been actively responding to manufacturer incentives and price cuts. With prices generally declining across the EV market, prospective buyers have been rewarded for their patience with reduced prices and often fast delivery times.?
Asos (ASC.L): Asos recently switched its reporting cadence from reporting 4 times a year to twice a year and it’s unclear whether this biannual reporting cycle will continue.
We allocated the most recent 6-month reported revenue period into Sep-Dec 2023 and Jan-Feb 2024, the historical earnings periods reported by Asos, using the NielsenIQ quarterly transaction indices. YoY % growth in Total Group Revenue continues to be negative, both in our NIQ estimate and our calculated values based on ASC.L’s 6-month reported group revenue.
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