Dick’s Sporting Goods acquiring Foot Locker was unexpected, and despite management’s claim that it would be accretive to earnings, along with a preliminary fiscal Q1 results where comp-sales were above estimates (+4.1% vs expectations of +2.6%), the stock dumped -15%. Our quick thoughts and then our data. First, the near-term accretion was simple math, ahead of the news Dick’s traded at 10.1X EV / EBITDA on a NTM basis, above Foot Locker’s 8.

By Thomas Paulson, Head of Market Insights Amazon’s Q1 results and guidance for Q2 reflect what we are broadly witnessing – relatively stable demand for goods, some pull-forward effects ahead of tariffs, and a lot of uncertainty. Including Leap Year, the North American retail business slowed about -400 bps QoQ to around +8% unit growth and +6% $-volume growth, per our estimate. Average ticket fell -200 bps as: (1) Amazon and its third-party sellers have been highlighting savings and lower prices, and (2) consumables (which are generally lower-priced items) grew at +12%, which is twice the rate of general merchandise (our estimate).

By Thomas Paulson, Head of Market Insights As anticipated, March was a strong month for retail sales per the Census Bureau’s Advance Monthly Sales report, and no, it wasn’t all due to pull-forward effects and pre-buying ahead of tariffs as we showed earlier . Yes, there was pull-forward in auto, furniture, and electronics but the month was also better for other general merchandise categories and apparel as well. We attribute that improvement (beyond pull-forward) to warmer temperatures after a harsh February and early March, and an overall strong spring selling season despite Easter’s timing.

By Thomas Paulson, Head of Market Insights Dollar Tree reported an improvement in its comp-store sales trend due to an improvement in its discretionary business (as did Dollar General, Walmart, and Target). The discretionary comp increased by +0.4%, the first positive number of the year; moreover, its 2- and 3-year trend also improved. The earnings release quotes CEO Mike Creedon saying, “2024 [finished] on a high note with strong execution at Dollar Tree as growing customer acceptance of our expanded assortment drove sales momentum.

By Thomas Paulson, Head of Market Insights In the context of a market that grew by +3.2% in value and +2.1% in volume, Advan took a look at Publix’s and General Mills’ Q4 results, along with two smaller regional grocers in California – Smart & Final and Stater Bros, brands that we shop and that have been in the news. The results and data from all four reinforce one of our 2025 themes: the year is going to be a difficult one for the industry with (1) consumers increasing their loyalty to retailers that have a strong private label and produce offerings and (2) increased promotions to retain customers by those grocers on the losing side, with those promos being concentrated on the national CPG brands.

By Thomas Paulson, Head of Market Insights Ollie’s Bargain Outlet Holdings reported solid FQ4 results with adjusted sales growth of +9% to $667M (just shy of Advan’s estimate of $672M). Growth was driven by a +2.8% comp-sales increase and 47 (+9%) more stores over the past year, including locations taken over from Big Lots and 99 Cents Only. The earnings release quoted CEO Eric van der Valk saying, “With so many retailers closing stores or going bankrupt in the past year, there are a considerable number of abandoned customers, merchandise, real estate, and talent in the marketplace.

By Thomas Paulson, Head of Market Insights Over the weekend, again numerous press and blog reports declared Target’s store traffic to be down due to boycotts and upset feelings over Target’s messaging around DEI. However, those reports cite a traffic decline YoY against a week last year that included an extra day (Leap Day). We adjust for that by using 7-day and 91-day rolling periods and Advan’s data shows no unusual trend for Target vs.

By Thomas Paulson, Head of Market Insights Dollar General reported $10.2B revenue for Q4, up +5.0% YoY, and above our +3.9% estimate* (120bps Moe, 97% correlation). Comp-sales increased +1.2% driven by consumables (+2.7%). The non-consumables comp was roughly flat, the best result since early 2021. Additionally, comp-tickets increased +2.3% and comp-transactions decreased -1.1%. Advan shows traffic per average store declining -0.4%. The earnings release quotes CEO Todd Vasos saying, “As we reflect on our full fiscal 2024 year, we believe our Back to Basics work is resonating with customers, as demonstrated by higher customer satisfaction scores and healthy market share gains.

By Thomas Paulson, Head of Market Insights Casey’s General Stores, Inc reported strong quarterly results for its “inside” business with comp-sales on prepared food & dispensed beverages increasing 4.7% and grocery & general merchandise increasing 3.3%. As a reminder, the gas & convenience channel is undergoing a transformation to more fresh and prepared offerings vs. packaged food. Not only does the fresh & prepared allow retailers to create differentiation and capture market share, but the offering also has a much higher gross margin rate at nearly 60% vs.

By Thomas Paulson, Head of Market Insights Dick’s Sporting Goods, Inc. reported solid results, including an underlying sales increase of 6% based upon a 6.4% comp-sales increase and improved gross margin rate. The comp-sales increase was composed of increases of 4.4% in comp-ticket, 2.0% in comp-transactions, and a modest decrease in comp-traffic (Advan) of -1.1%. Assuming online comp-transactions were up high-single-digits and stripping that from the 2.0% increase in transactions, lowers estimated store comp-transactions to the Advan’s measure of comp-traffic, which implies a stable conversion rate.