Monday, September 21, 2020

Calcbench has been taking a deep look at the retail sector lately, and how firms in that line of business have weathered coronavirus and recession. We reviewed the filings of 45 large, well-known retailers to see what they’ve been disclosing, how their financial performance has fared, and more.

For a quick summary of what we reviewed, see below:

  • Part I: A Tale of Two Segments. When physical stores closed around the world earlier this year, deft retailers rushed to expand their e-commerce operations. This post looks at how well Lululemon Athletica ($LULU) did just that, and the surprising lack of disclosure about e-commerce segments among other firms.
  • Part II: Inventory Turnover. One useful metric of business performance and liquidity is inventory turnover. We charted quarterly inventory turnover across the last two years. Averaged across the whole group, the trend isn’t that alarming — but firm by firm, you do find individual firms that saw big slowdowns in their ability to turn items on the shelves into cash.
  • Part III: Impairments. Yep, impairments saw a gigantic spike in the first part of 2020. Those write-downs still didn’t cut the value of total assets too much, but again, several individual retailers saw some eye-popping cuts. (Lookin’ at you, Macy’s ($M) and Walgreens Boots Alliance ($WBA).

Overall, the picture for retailers this year is mixed. Some, such as Apple ($AAPL), Walmart ($WMT), and Lululemon have performed deftly and admirably. Others, less so. We’ll revisit major players in this sector from time to time, especially next spring as annual reports for 2021 start hitting the streets.

Meanwhile, we’re always eager to hear from you about what else we should examine: other sectors to review, or specific disclosure items (supply chain finance, accounts receivable, cash from operations) regardless of industry. Drop us a line at any time.

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