A Look at What’s Driving Consumer Markets: FL, LOW, BLMN, and EWCZ
In today’s rapidly evolving market, investors seek actionable data and insights to guide them through critical sectors. Consumer Edge, ranked #1 on Maiden Century, provides deep analysis into the industries shaping consumer markets. This blog dives into a few of the main players in the Apparel, Home Furnishings/Decor, Restaurants, and Beauty industries—sectors at the heart of shifting consumer preferences. Here’s a closer look at these companies and the trends driving their success.
Apparel: Foot Locker (FL), Youth Culture and E-commerce Growth
In 2024Q2, FL (US) reported sales up +4.1%, below CE Implied Reported Growth of +6.2%. This overstatement of growth seems to have stemmed largely from increased digital penetration. Specifically, online sales correspond highly with credit/debit card purchases, while in-person transactions can include cash. Additionally, company management noted digital sales were up year-over-year and remain a key focus as the company aims for 25% digital penetration by 2026.
Foot Locker (FL) is a significant player in the evolving apparel retail landscape. Known for its strength in athletic footwear, Foot Locker has tapped into younger consumers and sneaker enthusiasts. Consumer Edge data shows FL’s success in engaging this group through exclusive sneaker drops, strong e-commerce, and partnerships, thriving in a dynamic retail space.
Home Furnishings/Decor: Lowe’s (LOW), DIY and Home Improvement Boom
In 2024Q2, LOW (US) reported sales down -5.5%, close to CE Implied Reported Growth of -5.1% and below consensus of -4.7%. The company highlighted its broad customer base as a potential source of strength, with CE data suggesting it derived the same percent of revenue from its lowest and highest income customers in Q2.
For the home furnishings sub-industry, CE Data shows that the decline moderated to -8% in Q2 2024, a 250 basis points improvement from Q4 2023. This could be due to easing inflation putting less pressure on consumer wallets, enabling them to spend on discretionary items to improve their living spaces. The home-improvement sub-industry, meanwhile, continued its recent trend of low single digit declines, contracting -3% in 2024Q2. The stability in the home improvement sector may be attributed to a saturation point reached following the pandemic-era surge in renovations. As a result, the immediate need for large-scale home improvements has waned.
Restaurants: Bloomin’ Brands (BLMN), Adapting to Shifts in Consumer Dining Preferences
In 2024Q2, BLMN (US) reported sales down -3.2%, close to CE Implied Reported Growth of -3.3%. The company discussed softer than expected trends across the industry, but strength in its value offerings, particularly at Outback Steakhouse. CE data showed Outback Steakhouse outperformed industry trends in spend and traffic. The middle-income demographic ($40K-$100K) spent more year-over-year than other cohorts, aligning with the company’s focus on value-seeking diners.
In the competitive restaurant sector, Bloomin’ Brands (BLMN) has stood out by adapting quickly to changing consumer preferences. For instance, menu innovation, along with a focus on takeout and delivery services, has kept brands like Outback Steakhouse relevant. This comes in an industry facing pressures from rising costs and shifting consumer habits.
Bloomin’ Brands is addressing these needs by enhancing its digital presence and modernizing its menus, making it a standout in the evolving dining landscape.
Beauty: European Wax Center (EWCZ), Self-Care Trends and Subscription-Based Services
In 2024Q2, EWCZ (US) reported sales up +2.3%, close to CE Implied Reported Growth of +3.5% but below consensus estimates of +4.9%. The company attributed the sales miss to a challenging economic environment affecting all income cohorts and a drop in frequency from non-core customers. Furthermore, management noted that about 75% of revenue comes from high-income core guests. CE data showed that high-income spending was slowing down, aligning with the company’s quarterly performance.
European Wax Center (EWCZ) is a key player in the beauty industry, capitalizing on the self-care movement. With consumers increasingly prioritizing self-care routines, EWCZ has positioned itself as a go-to destination for personal care. CE data highlights EWCZ’s success in leveraging subscription-based services, offering customers membership packages that drive recurring visits and loyalty.
Value and Digital Strategies Key to Navigating Shifting Consumer Preferences
CE’s Q2 2024 transaction data shows mixed performance across sectors. Value-driven offerings and digital strategies were key to success. These insights reflect shifting consumer preferences and the growing need for companies to adapt to a value-conscious, digitally engaged market.
Consumer Edge is the leading provider of alternative data for consumer spending and the sole source of global revenue signals. Reach out today to gain insights into market intelligence, consumer spending behavior, and retail trends.
