Planalytics Q2 2016 Recap

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Upcoming Events
Hooklogic Ecommerce Media Forum
May 12, NYC
Shoptalk
May 16-18, Las Vegas
Onestop Retail + Technology Executive Conference
May 31, Manhattan Beach, CA
Women in STEM Summit
June 8-9, San Francisco
RMS: “ The Future of Retail: It Ain’t What it Used to
Be”
June 9, NYC

Q1
Q2 2016
RECAP
August 11, 2016
WEBCAST
Evan Gold
EVP – Global Services
Planalytics
Marie Driscoll, CFA
Senior Analyst
Fung Global Retail & Technology

Q1
@FungRetailTech

Q1
– Q2 2016 Business Trends & Results
– Q2 2016 Weather Insights
– Back-To-School Outlook
Agenda

6
Designed by Freepik
2016 Quarterly Retail Update
& Spring Preview
Marie Driscoll
Senior Analyst– Fung Global Retail & Technology

Q1 2016 and Spring Retail Trends
1. Selected April Sales
2. Selected Latest Quarter Earnings
3. Mixed Luxury Results
4. Online: Amazon Spotlight
5. Retail Stores Closings: New Developments
6. Store Traffic and Sales: A Month’s Change
7. Tax Season Wrap-up: Refund Spending Intentions
8. Calendar Impact: Negative Q1 2016 Sales
9. Funding for On-Demand Concepts Slow
10. USD Appreciation Affects Global Retailers

1. Selected April Sales
• 6 companies that reported monthly comps
in April posted results below expectations
• Biggest surprise coming from L Brands
– Weakness in the core lingerie
category drove a negative comp at
Victoria’s Secret for the month.
• •California was the weakest region for
Costco in April and weighed on traffic by
about 100bps
– Negatively impacted by gas
deflation and foreign exchange
Same-Store Sales (%)
April 2016
Actual April 2015
April 2016
Est.
MASS MERCHANTS
Costco Wholesale 0.0 0.0 0.5
Costco US 0.0 2.0
Costco Canada 2.0 N/A
Costco International (3.0) (4.0)
Costco Wholesale (ex fuel) 3.0 7.0
Costco US (ex fuel) 2.0 7.0
Costco Canada (ex fuel) 7.0 N/A
Costco International (ex fuel) 1.0 9.0
Fred’s 0.3 0.7 2.3
SPECIALTY APPAREL STORES
Buckle (13.2) (3.8) (6.9)
Cato (3.0) (14.0) N/A
L Brands 1.0 (1.0) 5.1
Victoria’s Secret (1.0) 0.0
Bath & Body Works 5.0 (2.0)
Zumiez (6.0) (4.0) (3.7)
Source: Company Reports

Sports Brands UA YoY Change NKE YoY Change
Revenue (Millions) $1,047.7 30.2% $8,032 7.7%
EPS $0.04 17% $0.55 23.6%
Same Store Sales N/A - 10% -
Luxury COH YoY Change KATE YoY Change
Revenue (Millions) $1,033 11.2% $274 7.5%
EPS $0.44 21.6% $0.08 -
Same Store Sales 0% - 19% -

Beauty SBH YoY Change EL YoY Change
Revenue (Millions) $980.1 4.5% $2,656.5 2.9%
EPS $0.35 5.5% $0.76 11.4%
Same Store Sales 4% - N/A -

3. Monetary & Geopolitical Uncertainties Impact Luxury
• Currency exchange rates, attacks in Brussels and Paris and a slowdown in
international tourism hurt high-end luxury goods
• Hermès: +6.2% Q1 sales below 8% medium term goal and 2016 may track at
this lower pace
• Kering: +2.6% Q1 sales reflect mixed performance with Gucci rebounding
• LVMH: Flat sales at fashion and luxury goods segment
• Global Blue reports Chinese shopping abroad fell for the first time since 2010

4. Online: Amazon Spotlight
• Amazon sales grew 28% YoY in
Q1
• Amazon is growing about 10X as
fast as total US retail sales growth
and about 3X as fast as US e-com
growth
• Amazon focusing on food and
apparel for next leg of
merchandise growth
(10%)
5%
20%
35%
50%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Amazon Sales Growth US Total Retail Sales Growth
Amazon Annual Sales Growth

5. Retail Stores Closings: New Developments
• Sears
– Has been suffering declining sales numbers
– Will shutter 68 Kmart locations and 10 Sears stores
• Aéropostale
– Filed for bankruptcy on May 4
– Will close 113 US stores and 41 in Canada
• Sports Authority
– Failed to reorganize under bankruptcy
– May soon close 450 locations

5. Retail Stores: Closings Continue
Selected Announced Store Closings, 2015
Retailer Segment
# of Announced
Store Closings
RadioShack Home Entertainment 1,784
Wet Seal Apparel 338
Deb Shops Apparel 287
Anna's Linens Home Furnishings 260
Body Central Apparel 256
Simply Fashion Apparel 243
Walgreens Drug Stores 200
The Gap Apparel 175
Fresh & Easy Grocery Stores 161
Cache Apparel 153
Jones NY Apparel 127
The Children's Place Apparel 125
Chico's Apparel 120
Izod Apparel 120
Pier 1 Imports Home Furnishings 100
Frederick's of Hollywood Apparel 93
Stage Stores Department Stores 90
Coach Apparel 70
Macy's Department Stores 50
JC Penney Department Stores 40
Rite Aid Drug Stores 40
Sears Hometown Department Stores 40
Source: ICSC Research and PNC Research
2015
• There was a 7% increase
YoY in store closure
announcements.
• There was 29% less square
footage associated with
announced store closures in
2015 versus 2014.
2016
• Closings include:
• Wal-Mart: 269 stores
(154 in US)
• Macy’s: 40 stores
• Kohl’s: 18 stores

6. Store Traffic and Sales: A March Dip
• March store traffic dropped by 9.7% year over year
• Surpassing a 7.8% decline in sales at retail stores
• The traffic decrease is the largest in the past five months
Source: RetailNext
Monthly Sales and Traffic YoY%
Sales Traffic Conv. ATV SPS Tran. % Return
March -7.8% -9.7% 0.4% -0.7% 2.2% -7.0% -0.1%
February -6.9% -6.6% 0.2% -2.0% -0.3% -4.9% 0.1%
January 2016 -4.6% -4.3% 0.0% 0.1% -0.1% -4.4% 0.4%
December -0.4% -5.8% 0.4% 3.6% 5.7% -3.8% -0.3%
November -5.6% -7.6% 0.0% 3.2% 2.3% -8.3% 0.1%

7. Tax Season Wrap-up: Refund Spending Intentions
• As of April 22, the IRS had received 136 million tax returns up 1.7% yoy
• One in five Americans planned to spend income tax refund money
• Millennial splurging intent double that of other demographics
– likely benefiting food and drinking establishments
Source: GoBankingRates
What Do You Plan to Spend Your Refund On?
30%
32%
30%
29%
24%
18%
25%
27%
25%
24%
26%
27%
11%
10%
10%
9%
7%
6%
7%
6%
5%
5%
2%
2%
7%
6%
3%
3%
2%
2%
21%
19%
27%
31%
40%
46%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
18-24
25-34
35-44
45-54
55-64
65+
AgeofRespondent
Pay off debt Put in savings Put towards vacation Make a major purchase Splurge I do not receive a refund

8. Calendar Impact: Negative Q1 2016 Sales
• A slightly earlier Easter likely hurt spring category sales
APRIL 2015
Passover: April 3 – 11
Easter: April 5
MARCH-APRIL 2016
Easter: March 27
Passover: April 22-30
March / April 2016
Su M Tu W Th F Sa
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
April 2015
Su M Tu W Th F Sa
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30

9. Funding For On-Demand Concepts Slow
• Funding for Startups has been slowing down
• “Uber for X” Startups have been falling out of favor for investors
• Down 36% sequentially and 75% YoY
Source: CB Insights
Global On-Demand Quarterly Financing History

10. USD Appreciation Affects Global Retailers
Currency Exchange Appreciation/Depreciation Against USD
Source: Bloomberg
-70
-60
-50
-40
-30
-20
-10
0
10
May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16
Euro
Great Britain Pound
Brazilian Real
YoY % Change
GBP: -11%
Euro: -20%
BRL: -55%

Macro Trends and Outlook
1. GDP Slows
2. Retail Sales Lost Momentum in March
3. Gasoline Price YoY Decline Attenuated
4. Consumers Are Less Optimistic
5. Unemployment Rate Stabilized
6. Disposable Income Growth Increased Slightly
7. Stable Growth in Personal Expenditures
8. Personal Savings Rate: Little Changed

Overview: Favorable Macro Backdrop
Source: Energy Information Agency
Bureau of Economic Analysis
Bureau of Labor Statistics
McGraw Hill Financial
University of Michigan Survey of Consumers
Indicator Period 2016 2015 YoY change
Impact on
Consumption
Gas Price ($ per gallon) Apr. $2.22 $2.55 (12.9%) +
Per Capita Disposable Personal Income Mar. $38,595 $37,708 +2.4% +
Savings rate Mar. 5.4% 4.9% 50 bps -
The S&P/Case-Shiller 20-City Composite
Home Price Index
Feb. 182.8 173.5 +5.4% +
Unemployment rate* Mar. 5.0% 5.5% (50) bps +
University of Michigan Consumer Sentiment Apr. 89.0 95.9 (7.2%) -
GDP Growth Q1 0.5% 0.6% (10) bps -

1. GDP Slows
• GDP growth slowed to 0.5% in Q1, down from 1.4% in Q4 2015
• GDP was up 0.6% within the Euro area, down from 1.6% the year ago quarter
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
US GDP Growth Rate
Source: BEA

Through March 31, 2016
Source: US Census Bureau
1.8
-10.0
-5.0
0.0
5.0
10.0
15.0
Mar-04
Sep-04
Mar-05
Sep-05
Mar-06
Sep-06
Mar-07
Sep-07
Mar-08
Sep-08
Mar-09
Sep-09
Mar-10
Sep-10
Mar-11
Sep-11
Mar-12
Sep-12
Mar-13
Sep-13
Mar-14
Sep-14
Mar-15
Sep-15
Mar-16

• Spending on health and personal
care rose 1% MoM and 6% YoY
• Consumers spent less dining out
during the month than they did in
the previous month
• In the meantime, sales for
building materials & garden rose
by 1.4%, responding to changes
in the housing market
Source: U.S. Census Bureau
US Monthly Retail Sales by Category YoY%
-0.1%
-0.8%
1.0%
0.2%
0.0%
0.1%
0.3%
1.4%
-0.9%
0.0%
7%
5%
6%
6%
3%
-2%
3%
11%
0%
1%
-5.0% 0.0% 5.0% 10.0% 15.0%
Nonstore retailers
Restaurants and Bars
Health & personal care
Sporting goods, book & music
General merchandise
Electronics & appliance
Furniture & home goods
Building material & garden
Clothing & accessories
Food & beverage stores
YoY%
MoM%

3. Gasoline Prices YoY Decline Attenuated
• Gas prices averaged $2.22 per gallon in April, down 12.9 % from a year ago,
up from February’s low of $1.64
• Consumers are increasingly spending their extra income on services and experiences, less
on goods
Sources: Energy Information Agency
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
Retail Gasoline Price ($/Gallon)

4. Consumers Are Less Optimistic
• The Conference Board Consumer Confidence Index slowed down to 94.2 in
April from March’s 96.1
• In April the University of Michigan Consumer Sentiment Index slowed down to
89.0 from March’s 91.0, down 7.2% year-over-year
Monthly Consumer Sentiment and Confidence
Through April 30, 2016
Source: University of Michigan and the Conference Board
89
94.2
0
20
40
60
80
100
120
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Consumer Sentiment Consumer Confidence

5. The Unemployment Rate Stabilized
• Unemployment rate unchanged in April, up from 4.9% in February
• Job gains were led by retail trade, food services and drinking places, health
care, and manufacturing
Through January 31, 2016
Seasonally adjusted
Source: Bureau of Labor Statistics
5.0%
4
5
6
7
8
9
10
04 05 06 07 08 09 10 11 12 13 14 15
US Unemployment Rate %

6. Disposable Income Growth Increased Slightly
• Real disposable income increased by 3.1% YoY in March, up from February ‘s
2.6%.
• Wages & salaries rose 4.7% YoY in March, up from 4.3% in February
Through March, 2016
Source: Bureau of Economic Analysis
Real Disposable Income & Wages and Salaries YoY %
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
Through March, 2016
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
04 05 06 07 08 09 10 11 12 13 14 15 16
Real Disposable Income Wages and Salaries

7. Personal Expenditure: Stable Growth
• US PCE grew at a 3.5% YoY rate in March, slightly lower than February’s 3.9%.
• Durables gained at a rate of 1.3% YoY in March, down from February’s 3.8%.
• Nondurables has underperformed since the beginning of 2015, grew 0.4%, down from February’s 1.1%
increase.
Through March, 2016
Seasonally adjusted annual rate
Monthly Personal Expenditure by Channel YoY%
Total PCE Non Durable Goods

8. Personal Savings Rate: Little Changed
• The personal savings rate rose to 5.4% in March after decreasing from 5.2 % in
January to 5.1% in February
Seasonally Adjusted as of March, 2016
Source: Federal Reserve Bank of St. Louis
5.4%
0%
2%
4%
6%
8%
10%
12%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Personal Savings Rate %

Upcoming Events
Hooklogic Ecommerce Media Forum
May 12, NYC
Shoptalk
May 16-18, Las Vegas
Onestop Retail + Technology Executive Conference
May 31, Manhattan Beach, CA
Women in STEM Summit
June 8-9, San Francisco
RMS: “ The Future of Retail: It Ain’t What it Used to
Be”
June 9, NYC

32
Designed by Freepik
Thank You
Marie Driscoll
Senior Analyst– Fung Global Retail & Technology

Q1
BUSINESS WEATHER RECAP
Q2 2016

Q1
Q1 2016 (Feb-Apr)| Warmer and Wetter Than LY
34
• U.S. warmer Q1 than LY
– 50% fewer days with below freezing temps vs LY
• Canada warmest Q1 since 2012
– Above normal
• U.S. wettest Q1 since 2011
– Snowfall below LY, least since 2012
• Canada wettest Q1 in 20+ years
– Snowfall below LY but above normal

Q1
• U.S. warmest since 1999, Canada 2012
– West North Central region warmest since 1999
• U.S. wettest in 2 years, Canada wettest since 1965
– Mid-Atlantic region wettest since 1981
– Montreal wettest since 1981, Quebec City and Ottawa since 1997
• Mountain region least snowfall in 55+ years
February 2016:
Warmer and Wetter Than LY
35

Q1
Retail Traffic: +3.9% Business Impacts
• Bicycles
• Sports Drinks
• Short Sleeve Shirts
• Fleece
• Ice Melt
• Heaters
Valentine’s Day
Sunday, February 14th
Temperature vs Normal Precipitation vs Normal
February 2016:
Early Start to Spring Purchasing
President‘s Day
Monday, February 15th
• U.S. coldest since 2007; below normal rain & above normal snow
• Canada colder than normal but warmer than LY; least snowfall in
55+ years
• Warmest since 2005
• Most precipitation since 1998
WDD

Q1
March 2016:
Warmer and Wetter Than LY
• U.S. and Canada warmest since 2012
– The Mid-Atlantic, South Atlantic, and West South Central regions had their
2nd warmest March in 55+ years
– Calgary, Vancouver and Edmonton warmest since 1992
• U.S. wettest since 2011, Canada wettest since 1972
– West South Central region wettest since 1997
• U.S. snowfall was the least since 1961
37

Q1
Retail Traffic: +2.3% Business Impacts
• Lawn Fertilizer
• Wiper Blades
• Fans
• Indoor Entertainment
Foot Traffic
• Soup
March 2016:
Spring Purchasing Strongest in the East
St. Patrick’s Day
Thursday, March 17th
Easter
Sunday, March 27th
• Warmer than normal in the U.S. & Canada, driven by eastern
markets
• U.S. near normal temperatures; wettest since 2009
• Canada slightly colder than normal; wettest since 2012
WDD

Q1
April 2016:
Cooler and Wetter Than LY
• U.S. coolest in 3 years, Canada since 1997
– New England region coolest since 1995; Mid-Atlantic & East North Central since 2000
– Pacific region warmest April in 55+ years
– Quebec City coolest in 55+ years, Toronto and Montreal since 1995
• U.S. rainfall above normal; Canada least rainfall since 2010 but most snowfall since 2000
– West South Central region wettest since 1991, Mountain region since 2005
– Mid-Atlantic and South Atlantic regions driest since 2001
• Toronto most April snowfall in 55+ years, Halifax since 1999 and Ottawa since 2007
39

Q1
Business Impacts
• Rainwear
• Shorts
• Sunglasses
• Frozen Treats
• Grass Seed
April 2016:
Spring Purchasing Slowed Down While
Severe Weather Ramped Up
Retail Traffic: -0.1%WDD
• Flooding in Houston
– Over 9 inches of rain fell on April
18th, the second most rainfall
recorded on any day in city history
– Up to 20 inches fell in select
locations around the city

Q1
Drought Update
Now: May 3, 2016Then: Jan 26, 2016

Q1Suncare
+4% WDD
Jacksonville
Grilling and
Propane
+15% WDD
Chicago
Tees
+12% WDD
Dallas
Sandals
-5% WDD
San Francisco
Fans
+24% WDD
Seattle
National Retail Apparel Store Traffic: +1.3% WDD
National Home Center Store Traffic: +1.0% WDD
Capris
+5% WDD
Toronto
Air Conditioners
+8% WDD
Edmonton
Lawn Care
-14% WDD
Winnipeg
Shorts
+26% WDD
Vancouver
Bicycles
+7% WDD
Boston
Q1 2016| Weather Driven Demand Actuals vs. LY
42

Q1
Mother’s Day 2016

Q1
May Week 2 & 3 vs. LY
Warmth Returns for Most
May Week 2
5/8/2-2016 - 5/14/2016
May Week 3
5/15/2016 – 5/21/2016

Q1
1.Overall Business Conditions Softened in Q1 For Various Reasons
• There were exceptions to this rule
2.Early Quarter Store Traffic Benefitted from Warmer Conditions
• Above normal rain and record flooding drove need-based purchasing
3.Demand for Spring Products Increased with Warmer Temps to LY
• Weather sensitive categories in February and March drove margins
Q1 2016| Key Takeaways

Planalytics Q2 2016 Recap

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