Retail Analyst Oliver Chen on ELF, Tapestry, and Consumer Trends

ELF Beauty's Growth Deceleration

• 💡 ELF Beauty is implementing a price increase of about a dollar per product, which caused a slight disruption as retailers took time to adjust.
• ⚠️ Deliveries were temporarily halted to retailers who hadn't raised prices, impacting core ELF brand growth to an estimated 2-5% in the second half, a deceleration from its previous 20% growth rate.
• 🚀 Despite the slowdown, ELF is considered a very good company with a long-term buy recommendation, noted for its innovation and speed in reacting to market changes.

Tapestry's Strong Performance and Gen Z Appeal

• 🎯 Tapestry, the parent company of Coach and Kate Spade, is recommended with strong performance, particularly Coach, which saw 21% growth.
• 💰 Coach is successfully capturing the Gen Z customer by offering value with handbags priced around $300-$500, compared to luxury brands costing thousands.
• 📈 The business is performing well globally due to strong product, excellent store experiences, and Gen Z-relevant offerings, though Kate Spade remains a work in progress.

Consumer Trends and Holiday Outlook

• 📊 The consumer landscape shows a bifurcation, with higher-income spenders becoming increasingly important, while middle-income positioning is challenging for department stores.
• 🛒 Retailers like Costco, Revolve, and Tapestry are favored, along with Walmart's digital and AI initiatives.
• ⚠️ Consumers continue to prioritize value, making retailers that execute on low price points and promotions crucial, especially heading into the holiday season.

Canada Goose and Marketing Expenses

• 🇨🇦 Canada Goose maintains a buy rating, despite a recent dip due to higher-than-expected marketing expenses.
• 📈 Direct-to-consumer sales are up 10%, supported by a new creative director and a focus on non-parka products, though EBIT was lower than anticipated due to SG&A.