Wedbush Comments On Post-Christmas Hardlines Channel Checks

Wedbush commented on hardlines channel checks Monday and reported mixed results.

Analyst Joan Storms found the least amount of holiday clearance at Dollar Tree, Inc. (NASDAQ: DLTR) which “continues to be a leader in planning its Holiday buys as almost the day after Christmas, there was very little Holiday seasonal merchandise left (about 4 carts on average filled with merchandise at the front of the store, which was 50 percent off).”’

“Overall, DLTR was not a destination for Black Friday weekend, but traffic picked up closer to Holiday and the full-priced sell-through was evident with very little leftover Holiday clearance. We remain confident that the company's strategy to drive sales/comps and lever SG&A continued through the holiday season, especially against an easy comparison with last year's tough weather,” according to Storms.

Dollar Tree was rated Outperform with a $74 price target. The stock closed Monday at $70.50, up 1.34 percent.

At Tuesday Morning Corporation (NASDAQ: TUES), “the fact that there was very little Holiday clearance left (on average, a couple of tables up front) indicated good full-price sell-through. The company conducted a “12 Days Before Christmas” email campaign highlighting gift ideas as well as a markdown cadence for Holiday, which is currently at 50 percent off. We are comfortable with the comp guidance of +HSD and given good sell-through of Holiday, and believe there could be slight upside.”

Tuesday Morning was rated Outperform with a $24 price target. The stock closed at $21.62, up 1.41 percent.

Storms did find at Big Lots, Inc. (NYSE: BIG) what appeared to be more “Holiday inventory clearance that last year, but given our checks were limited to our Los Angeles home base, we cannot yet count out their ability to clear that merchandise, which we know they do every year.

“On average, we found about 6-8 half aisles of Holiday left and as such, we expect the final markdowns will come to 75 percent, which would be similar to last year. Currently, beyond the 50 percent+ off Holiday merchandise, the company is featuring a big home event throughout the store as well as its renewed focus on food and consumables. We will continue to do checks on the sell-down of the Holiday merchandise, but at this point, we remain comfortable with company guidance for Q4.”

Big Lots was rated Outperform with a $50 price target. The stock closed at $39.09, up 0.35 percent.