JaguarConsumer Weekly Callouts – April 28 (CHWY, DKS, GOLF, MODG, PENN, YETI)
Chewy (CHWY) – Piper Sandler analyst Peter Keith would cite the company’s 4th semi-annual vet survey that was completed in conjunction with Piper Sandler’s Animal Health analyst, David Westenberg. This survey included 99 vets to gauge sentiment on Chewy’s vet platform, PracticeHub. Per Spring 2024 survey results, 15% of respondents have adopted Chewy’s PracticeHub. This would be a decrease from 20% in the Spring 2023 survey. This also contrasts with Chewy management commentary that PracticeHub adoption rates are ~45% of total vet industry – likely because ‘signing up’ doesn’t necessarily equate to active usage of the platform. As for platform preference, vets tend to prefer Vets First Choice over Chewy (12% preference for Chewy vs. 40% for VFC) and Chewy over PetMeds (29% preference for Chewy vs. 9% for PetMeds) — although preference for Chewy has deteriorated relative to each vs. Fall 2023.
Dick’s Sporting Goods (DKS) – Though its sales momentum modestly decelerated in early-April (likely due to timing/ comparisons to a later Easer in 2023), Truist Card Data suggests Q1 sales are trending well above their comp/revenue forecasts of +2.5%/~$2.98B. Besides referencing card data, Truist analyst Scot Ciccarelli would focus on a number of other topics for DKS, one being that it owns GameChanger. This is an app that supports video streaming & automatic highlight clips for youth sports in addition to score & stat-keeping plus other team management tools. The business has grown at a 35% revenue CAGR from 2017 to 2023 and management is expecting it to deliver $100M in net sales this year.
-7M games were covered on GameChanger in FY23, up from 5.7M in FY22.
-As per management, a GameChanger customer who also has a SCORECARD typically spends over 2x more per year at Dick’s than a typical SCORECARD member
“In addition to the revenue opportunity from the software itself, users are visiting the app 13x a month on average. We think this provides DKS and its brand partners substantial opportunities to connect with this highly engaged group of customers. Youth sports are an especially important market because brands try to establish relationships with young athletes, hoping that they will remain brand loyal through their athletic journeys (into high school etc).”
Penn Entertainment (PENN) – The company recently announced that Aaron LaBerge, the Chief Technology Officer for Disney Entertainment and ESPN, is coming in to lead the online division at PENN under the ESPN Bet brand. He has 20 years of experience at The Walt Disney Company, in two stints separated by five and a half years as a technology entrepreneur. As JMP Securities analyst Jordan Bender explains, Mr. LaBerge will start in the position during the summer and will be tasked with product enhancements after the business scaled back promotions into Q1, resulting in U.S. sports betting market share declining to 2.5% in March and iGaming declining to 2%. “The integration between ESPN and PENN will be pivotal over the summer months and into the NFL season in the fall as it launches in New York. We believe investors are looking to this period (the start of the NFL) as the catalyst to determine if the venture will work between the two companies and if PENN can start to rebuild its market share into 2025.”
Yeti Holdings (YETI) – YETI commonly benefits from large displays in Dick’s Sporting Goods (DKS) stores, though over the past few months, B. Riley analyst Anna Glaessgen noticed greater willingness from the retailer to co-locate competitors within YETI’s display. In recent weeks, they’ve noticed this escalating to former YETI shelf space being donated to Stanley. Now, the good news for YETI here is that there has been significantly less organic social media content referencing the brand, and GoogleTrends search interest for Stanley has fallen since the holiday period. In addition, the brand’s launch of neon colorways and expansion into soft coolers signals that it needs to broaden customer and/or product category reach in order to maintain momentum. Separately, on February 1, SharkNinja (SN) announced they were coming out with the Ninja FrostVault Cooler, thereby entering the premium cooler market. The 30-quart, most comparable to the Tundra 35, has greater storage capacity (48 cans vs. 39 cans) at a discount (MSRP of $200 vs. $275). The 30-quart is now available on DKS’ website, and the 50-quart was available, but sold out between 4/23 and 4/24. B. Riley notes SharkNinja has historically been successful gaining share as a lower-price option against premium branded players.
Golf (GOLF, MODG) – Golf Datatech LLC released March on/off-course reports, aggregating POS data from key golf retailers. Industry hardgood retail dollars were up +2.3% Y/Y, Hardgood units were +5.3% Y/Y. Balls posted a strong increase, +8.0% Y/Y. Club trends (+0.5% Y/Y) were driven by growth in Wedges (+14.6% Y/Y), Irons (+0.9% Y/Y), and Putters (+3.5% Y/Y), partially offset by a decline in Woods (-3.4% Y/Y).
KeyBanc analyst Noah Zatskin would comment, “Solid trends in golf ball unit sales in March (+6.5% Y/Y), as well as gloves (+5.0% Y/Y), give us confidence in the continuation of the relative strength/excitement of the sport. We also remain confident in the sport’s heat, and note that the NGF recently cited that more than 123M Americans consumed golf in some form LY (incl. on course and off-course play, streaming, watching live), 14% higher reach than in 2019. All in, we continue to prefer golf’s durability and see various factors (off-course, Full Swing, etc.) and golf’s larger base helping to drive democratization of the sport and keeping engagement elevated MT/LT.”
Separately, Truist analyst Michael Swartz commented how this recent data “foots with the findings of our recent off-course golf retailer survey and gives us greater comfort that both MODG (Buy) and GOLF (Hold) can at least reiterate guidance when they report 1Q24 results in the coming weeks.”
