Insights on US Retail Industry

Sector overview
Retail industry of United States of America (US A) has a market size of approx. USD 5.4tn (approx. 25.4%
of GDP) with 3.2mn businesses which employs over 17mn people. The companies holding the largest
market share in the USA Retail industry include a) Walmart Inc., b) Amazon.com Inc., c) The Kroger Co.,
d) The Home Depot Inc. and e) Best Buy Co. Inc. There are several categories in retail but the most
significant contributors are – Automotive (5.6% of GDP), Food and Beverage (3.1% of GDP) and General
merchandise (3.3% of GDP). The most important time of the year in retailing is the holiday shopping
season. It starts on Black Friday, the day after Thanksgiving. Almost 20 .0% of annual retail sales occur
between Black Friday and Christmas. This season includes Cyber Monday, the biggest day of the year
for online sales. It also includes Green Monday. It's the last day to order online to make sure you receive
your gifts before Christmas.

4.6%
4.2%

3.4%

2.5%

2016 2017 2018 2019

Retail industry as % of GDP

Categories -
The US Census Bureau divides retail sales into 13 categories. The largest category is auto and auto parts
stores. Since it's such a large component, the Census Bureau report also shows retail sales without auto.
Here are all 13 retail categories -
a) Auto dealers (including auto parts, new and used vehicle sales)
b) Non-store retailers, which means online retail sales
c) Department stores
d) Apparel, such as specialty clothing stores
e) Electronics and appliance stores, including big-box retailers like Best Buy
f) Food and beverage stores, including grocery and liquor stores
g) Building and garden supply stores, such as Lowes and Home Depot
h) Sporting goods/hobby stores, like Hobby Lobby and Michael's
i) Health/beauty shops, including drugstores
j) Furniture stores
k) Hospitality and leisure, including hotels, restaurants, and bars
l) Gas stations
m) Miscellaneous

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Largest retail player – Walmart
Wal-Mart was founded in 1962 by Sam Walton and his brother James “Bud” Walton. They opened the
first Wal-Mart Discount City in Rogers, Arkansas. Since then, Wal-Mart has grown to become the largest
publicly-owned retail company in the world. In the United States, the company includes Wal -Mart
discount stores, Supercenters, Neighborhood Markets, and Sam’s Club ware house membership clubs.
The company also has many international operations. Wal-Mart is considered a variety store which
focuses on low prices featuring apparel as well as hard goods, and has been committed to upholding
their basic value of customer service. Beginning in the early 1990s, Wal-Mart went to great lengths to
increase their market share. They introduced a full line of groceries into their stores, diversified their
market by appealing to certain ethnic groups through bilingual advertisements, and took steps to
promote the awareness of environmental issues. As of 2020, Wal-Mart operated 11,501 stores worldwide
and these stores generated over USD 520bn in net sales.

3.1% 4.4%
3.5% 3.4% 3.2% 3.2%
2.9% 2.5% 2.7%
1.7% 1.7% 1.8%
1.0% 0.7%

2016 2017 2018 2019 2020

-0.9%
-2.4% -0.8%
-2.0%

-5.7%

-9.6%

Walmart US Walmart international Sam's Club Total

Internet Retailing – Fastest growing segment

Internet retailing is the fastest-growing segment. By 2020, it is expected to reach USD 523bn, at a growth
rate of 9.32% each year until then. Mobile devices, especially cell phones, are becoming the biggest
source of internet traffic by 2020; 270 million shoppers will use their mobile devices to research and buy
products. That’s up from 244 million customers in 2015. Tablet use has been declining, while iPhone and
Android phone use have been growing. In 2017, people in 16 countries said that 60% of their “everyday
transactions” occurred in a digital form instead of a store. This included the United States, the United
Kingdom, and Canada.

The Future of Brick and Mortar Stores – Online retailing is killing the store sales
The popularity of online retailing is destroying shopping malls. In 2018, former J.C. Penney CEO Mike
Ullman said that only 25.0% of America's 1,200 shopping malls will survive over the next five years. Those
that survive will have enough financing to transition to a new style of retail. They must also be in a
location that serves the highest-earning 20%. He added that malls that can attract an Apple or Tesla
store will probably survive. In 2018, retailers filed for bankruptcy at record-high rates. Well-known brands
such as Nine West, Claire's, and Toys R Us announced bankruptcy in the first four months of the year.
An emerging online trend may become even more devastating for the industry. Websites such as
Wish.com, AliExpress, and LightintheBox allow U.S. consumers to purchase directly from Chinese
manufacturers. This eliminates the retailer completely. It also allows consumers to purchase goods at a
deep discount.

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Supreme Court aided the Brick and Mortar Stores
But the U.S. Supreme Court removed a competitive advantage for some online retailers. On June 21,
2018, it ruled that states have the right to collect sales taxes on online retail sales. Some retailers, such
as Wayfair.com and Overstock.com, did not pay state sales taxes. Amazon did for its own products,
but not for smaller online retailers that use its site. States will now be able to collect up to USD 33.9bn
annually in uncollected sales taxes. It also removes a disadvantage previously imposed on brick -and-
mortar stores.

The impact of COVID-19 – retail industry to experience severe downfall

The National Retail Federation predicted 2020 retail sales would grow between 3.5% -4.1%. However,
that was in February before most states issued shelter-in-place orders. In March, it predicted that the
industry will lose USD 430bn in revenues in 3Q’20. At least 630,000 non-essential retail outlets have
closed. Simon, the largest U.S. mall operator, closed over 200 shopping centers. Jan Rogers Kniffen, a
retail industry consultant, estimated that 30 well-known brands might be forced to file for bankruptcy
protection. Many retailers will have trouble meeting loan obligations. Apparel retailers will have a hard
time selling out-of-season apparel. They may have to cancel orders with manufacturers. Most retailers
will recover once the shelter-in-place orders are lifted. That will happen gradually, so as not to
overwhelm hospitals with too many new COVID-19 cases. A real recovery won't occur until a safe and
effective vaccine is developed. In this pandemic, the future of retail depends on a virus.

COVID-19 wreaked havoc in the retail industry of USA – March, 2020

U.S. retail sales plummeted 8.7% in March 2020. Non-essential retailers were closed to keep people safe
during the coronavirus pandemic. Clothing stores were hit the hardest, as sales dropped 50.5% in March.
Furniture store sales were next, falling 26.8%, followed closely by auto dealers, down 27.1%. Restaurant
and bar sales dropped 26.5%. On a brighter side, Grocery stores, an essential service, saw their sales
increased by 26.9%. Drug stores, another essential service, experienced a 4.3% rise in sales. Online sales
increased by 3.1% as people shopped from home. Building material and garden supply store sales rose
by 1.3%. People who were sheltering in place continued home improvement projects. YoY retail sales
were down 6.2% which is a far cry from the 3.0% retail sales growth generated by a healthy economy.
The Retail sector revenue is anticipated to decrease 3.3% in 2020 alone as temporary sto re closures
due to the COVID-19 are anticipated to limit demand for industry products. Brick-and-mortar operators
that do not have online platforms will likely experience a decline in revenue and profit as consumers
turn to online shopping and stay at home to practice social distancing. The spike in the unemployment
rate in 2020 will cause a decrease in consumer spending, harming the sector as a whole.

Retail food industry

The food retail industry comprises foods sold at food retailers such as grocery stores, mass
merchandisers, drug stores, convenience stores and foodservice facilities. The American retail
landscape is characterized by leading food retailers such as Walmart, Kroger and Costco. Shoppers in
the US made about 1.6 trips to grocery stores on average per week in 2018. Surveys have shown that
U.S. consumers tend to spend the most on groceries at warehouse clubs such as Costco, with an
average of about USD 89/shopping trip. Even though online grocery shopping has existed for years, the
vast majority of consumers still prefer to buy groceries in stores.

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 4.1%

2.9%
2.5%

1.7%

2016 2017 2018 2019

Retail food industry as % of GDP

Supermarkets – generates revenue over USD 2mn per year

According to the Food Marketing Institute, supermarkets fall under the traditional grocery segment .
They are defined as full-line, self-service grocery stores with generated sales of USD 2mn or more/year.
Within the category, conventional supermarkets accounted for the largest share of dollar sales. A
conventional supermarket is defined as a store format offering a full-line of groceries, meat, and other
products. This store format typically carries about 15,000 product items, provides a service deli and
frequently offers a service bakery. In addition, up to 15.0% of sales stem from general
merchandise/health & beauty care. The total number of supermarkets amounted to 38,307 in 2018. In
2018, U.S. supermarkets offering natural and/or gourmet foods generated about USD 46.3bn in sales.
USA supermarket sales in 2018 were worth USD 701.2bn.

Leading player in Supermarket – The Kroger Co.

Kroger was the leading supermarket in the United States in 2018, by a wide margin. It had nearly double
the retail sales of the next chain, Albertsons. Founded in 1883 in Cincinnati, Ohio, The Kroger Co. has
become the largest supermarket chain in the United States and the second largest overall retailer, only
behind the retailing giant, Walmart. In 2018, nearly 30.0% of US consumers shopped at Kroger on a
regular basis and the company had by far the most locations of any supermarket in the country.
Another aspect that may contribute to Kroger’s success is the fact that it is more than just a grocery
store. In 2017, the company had revenues of nearly 11 billion dollars from filling prescriptions in its
pharmacies. Some of Kroger’s locations also include fuel stations. Revenue from its fuel segment
exceeded 13 billion dollars in the same year.

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Financial Metrics:
List of selected food retail companies
Financial metrics (latest annual report in US $mn)
Operating Net Profit Total Total
Name Revenue Profit Net Profit margin Assets Cash liabilities Equity Debt D/E

WMT 523,964 20,116 14,881 2.8% 236,495 9,465 154,943 81,552 72,433 88.8%

GRUB 1,312 (6) (19) -1.4% 2,375 425 881 1,494 493 33.0%

TGT 78,112 4,658 3,269 4.2% 42,779 2,577 30,946 11,833 11,499 97.2%

COST 152,703 4,737 3,659 2.4% 45,400 8,384 30,157 15,243 6,823 44.8%

KR 122,286 2,251 1,659 1.4% 45,256 399 36,683 8,602 13,256 154.1%
-
DNKN 1,370 434 242 17.7% 3,920 708 4,508 (588) 3,452 587.0%
-
YUM 5,597 1,897 1,294 23.1% 5,231 605 13,247 (8,016) 10,485 130.8%
-
SBUX 26,509 3,916 3,599 13.6% 19,220 2,757 25,451 (6,232) 11,167 179.2%

MCD 21,077 8,886 6,025 28.6% 47,511 899 55,721 (8,210) 34,177 0.0%

Retail drug industry

The retail drug industry is comprised of pharmacies or drugstores, as they are known in North America.
US drug retailers’ revenues valued at over USD 296bn in 2019. With an aging population and greater
prevalence of chronic diseases, the need for safe, legal pharmaceutical drugs is constantly rising. While
the sector has consistently posted revenue gains, the pace of growth is projected to decelerate in light
of continued channel-shifting and a consumer preference toward generic drugs versus name brands.

3.9%

3.2%

2.7%

2.2%

2016 2017 2018 2019

Retail drug industry as % of GDP

Drug stores are focused on retention while at the same time trying to evolve to modernize store formats,
expand product offerings and services within and beyond the pharmacy, and build ecommerce.
Digitization and a fresh, fearless approach to new partnerships are important undercurrents in this
evolution.

Prescription drugs
The total number of prescription drugs dispensed in the U.S. has declined in the last few years, reaching
around 4.2 billion medical prescriptions in 2018. Prescription drug expenditures have been increasing
in value while the share related to total U.S. health expenditures has remained stable in recent years.
On the other hand, the pharmacy market recently saw some significant changes, especially with the
growing impact of online pharmacies worldwide.

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 2.7%
2.1%
1.6%
0.7%

2014 2015 2016 2017 2018

-7.5%

Total number of retail prescriptions filled annually YoY growth

The number of prescriptions dispensed in the U.S. has increased between 2009 and 2018. In 2009 the
number of prescriptions dispensed was near 3.95bn, while in 2018 the number of prescriptions dispensed
was around 4.21 bn. The increase in the number of prescriptions dispensed has a multi factorial origin
that includes health care sources, health insurance and prescription drug benefits. However, the
increase in prescription drug usage comes with a price tag as the price of drugs in the U.S. is also on
the rise.

Competitive landscape –
The top U.S. pharmacy in 2019 by market share based on prescription drug revenue was CVS Health
Corporation, followed by Walgreens Boots Alliance. CVS Health held over 24 percent of the prescription
drug market revenue at that time. A significant increase in market share was reported for Cigna
achieved through the acquisition of pharmacy benefit manager Express Scripts in August 2018. Before
that, Cigna was mainly active in the insurance business and related products and services.

24.50%

18.90%

10.30%

5.80%
4.70%

CVS health Wallgreens Cigna UnitedHealth Walmart

Market share of leading retail drugs stores

CVS pharmacies – the market leader

The CVS Health Corporation is a health service company with location all over the United States, Puerto
Rico and Brazil. CVS health comprises pharmacies, clinics and retail locations. According to recent
estimates the number of CVS pharmacies has increased dramatically since 2005. In 2018, CVS Health
was also the top specialty drug pharmacy in the United States based on market share.

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 23.1%

2.1%
0.7% 1.0% 1.2%

2014 2015 2016 2017 2018

CVS Health's number of stores YoY growth

Medication usage
The total number of retail prescriptions filled annually in the United States is expected to also rise
significantly by the year 2024. Medication usage varies depending on the population, for example,
some data shows that prescription usage increases with age. Likewise, gender has an influence on
prescription drug use. Females have a higher rate of prescription drug us

Prescription drug costs

The U.S. has some of the highest per capita drug spending in the world. That is largely because the
prices of drugs in the U.S. are based solely on what the market can bear, rather than what the actual
costs of production are. Personal health care expenditures in the U.S. have more than doubled since
2000. Estimates suggest that the cost of drugs will continue to increase.

1.9% 2.1% 1.9%

1.0%

2013 2014 2015 2016 2017 2018

-0.5%

-4.9%

Total number of medical prescriptions dispensed YoY growth

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Financial Metrics:
List of selected drug retail companies
Financial metrics (latest annual report in US $mn)
Operating Net Net Profit Total Total
Name Revenue Profit Profit margin Assets Cash liabilities Equity Debt D/E

WBA 136,866 4,834 3,982 2.9% 68,124 1,207 42,117 26,007 16,840 64.8%

CLCGY 31,352 3,001 1,703 5.4% 11,564 1,524 7,136 4,428 193 4.4%

PETS 283 46 38 13.3% 154 101 20 81 - 0.0%

CI 153,743 6,570 5,104 3.3% 155,774 5,411 110,430 45,344 37,407 82.5%

WMT 523,964 20,116 14,881 2.8% 236,495 9,465 154,943 81,552 72,433 88.8%

ANTM 104,213 5,985 4,807 4.6% 77,453 4,937 45,725 31,728 20,085 63.3%

HUM 64,888 3,456 2,707 4.2% 29,074 4,054 17,037 12,037 5,891 48.9%

UNH 240,269 17,799 13,839 5.8% 173,889 14,245 113,453 60,436 40,678 67.3%

SDGR 86 (39) (25) -28.7% 155 86 249 (93) - 0.0%

CVS 256,776 11,987 6,634 2.6% 222,449 5,954 158,585 63,864 68,480 107.2%

Retail Industry – Apparel

Apparel industry is mainly comprising of companies that design and sell clothing, footwear and accessories.
This industry offers a wide array of products ranging from basic necessities to luxury items. Retail segment of
apparel industry cater to the end users of the products. Building retail chain helps a company leverage its
brand name and exert a significant control on the buying behavior of the consumers. However, this industry
is fragmented and extremely competitive.

Industry overview:
The US apparel retail industry generated total revenues of $360.0bn in 2017. This industry has grown at a 2.6%
compound annual growth rate during the period of 2015-19. The US is the world largest apparel retail industry,
contributing 23.6% of the global value in 2017. Online retail companies’ generated roughly 20% of the total
sales generated in 2019. This number is increasing each year as consumers are opting for online shopping
over going to brick and mortar stores. The US apparel is expected to grow at a CAGR of 2.4% to reach
$416.7bn by 2025. Online retail shops are expected to take up 29% of total sales by 2023.

Chart: Sales projection of apparel-retail (Statista)

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Chart: online and offline sales composition projection (Statista)

Market dynamics:
Companies in the apparel industry use different business models for customer acquisition and retention. In a
single brand strategy, companies sell only one brand to its customers. A Multi - brand strategy involves selling
multiple brands belonging to various manufactures under the same roof. Private label apparel brands
typically outsource their products from countries like China and Bangladesh and sell under their own brand
name.

According to a survey of US census bureau data of 2015, multi-brand retail chain Macy’s held the highest
market share of 9%. General merchandise retailers like Wal-Mart (over 7.0%), Target (5.4%) and JCPenney
(3.3%) also had significant market share. GAP had a market share of 5%. American Eagle Outfitters,
Aerospace, and Abercrombie together accounted for 2% of total US apparel sales. The rest of the market
was served by numerous specialty and private label brands, fast-fashion players, department stores, and
pure - play online retailers. `

Source: US Census Bureau

Sales of clothing and clothing accessories stood at $266.8bn in 2019 and grown at an annual rate of 2.5%
during last ten years according US census data.

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The US has the largest footwear market in the world. The total market size of the footwear industry was
$79.86bn (contributing ~24% of the overall sales of the apparel industry) in 2017. This figure rose to $91.1bn in
2019. The footwear market is comprised of shoes, sneakers, luxury footwear, athletic footwear, sporting shoes,
and other related goods. Footwear products are commonly made of leather, textile and a range of synthetic
materials, and companies depend on outsourcing for most of the raw materials.

The athletic footwear market captures about 60% of the overall revenue generated. Women’s footwear
accounts for around 25% of the total share. The rest is captured by children shoes and other specialty
products. Nike serves almost half the markets with its flagship brands such as Nike, Jordan, and Converse. The
rest of the market share is scattered among Adidas, Puma, New Balance, Reebok, Under Armor, and
Skechers.

Source: US Census Bureau

Sales of footwear and related goods stood at $39.2bn in 2019 and grew at an annual rate of 4.2% during the
last ten years according to US census data.

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Problems and prospects for the industry:
The apparel industry is dynamic and consumers’ demands are constantly changing. People are increasingly
using online platforms for their shopping needs. This has led to offline apparel retailers offer generous pricing
and cut on their profits to remain competitive. This also led to companies being nimble with their inventory
management. With the rising environmental movement, sourcing products at a competitive price is
becoming increasingly difficult. Rising labor cost in China compelled many companies to outsource their
products from countries like Bangladesh, which in turn increased lead time. Moreover, trade tension with
China in the recent time has escalated the situation further.

Recent quarter performance and impact of COVID 19:

Sales of apparel took a major hit due to the outbreak of coronavirus. Sales dropped 17.9% YoY in the first
quarter of 2020. The apparel industry clocked a revenue of $46.5bn during the first three months of 2020 which
was $51.3bn last year. March saw the worst during which sales went down by 52%. US registered its first
coronavirus case in January and declared a nationwide emergency in March. All shops except food and
drugs were ordered to be closed down. Brick and mortar retail stores impacted severely with little to no sales
during this period. Usually apparel products come behind the necessity list and people tend to cut back on
their purchase in the time financial uncertainty. About 30 million people have already claimed
unemployment benefits and economists predict that the unemployment rate in the US could touch 20%.
Moreover, the apparel industry largely depends on countries like China, Italy, and France for its raw materials
and end products. These countries are also impacted by this virus and yet to resume on business to the full
scale. Companies in the apparel industry are coping with this trying situation by pushing online sales, giving
discounts, and spending on promotions. These activities are expected to eat up some margins apart from
the low volume of sales in the following two quarters.

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 Key Financial indicators:
List of selected clothing and clothing accessories companies
Financial metrics (latest annual report in US $mn)
Name of the Operating Net Total Total
SL comapany Revenue profit profit Net profit margin assets Cash liabilities D/E

1 The Gap Inc 16,383 574 351 2.1% 13,679 1,364 10,363 0.76
American Eagle
2 Outfitters, Inc. 4,308 314 191 4.4% 3,329 362 2,081 0.63
Abercrombie &
3 Fitch Co. 3,623 89 39 1.1% 3,550 671 2,478 0.70

4 JCPenny 11,167 31 (268) -2.4% 7,989 386 7,160 0.90

5 Ralph Lauren Corp 6,313 718 431 6.8% 5,943 584 2,656 0.45

6 Levi Strauss & Co. 5,763 542 395 6.8% 4,232 934 2,661 0.63

7 Capri Holdings 5,238 880 543 10.4% 6,650 172 4,218 0.63

8 Tapestry 6,027 814 643 10.7% 6,877 969 3,364 0.49

9 GOOS 831 197 144 17.3% 725 89 326 0.36

Urban Outfitters,
10 Inc. 3,984 246 168 4.2% 3,316 222 1,860 0.56

List of selected footwear companies

Financial metrics (latest annual report in US $mn)
Net profit Total
SL Name of the company Revenue Operating profit Net profit margin Total assets Cash liabilities D/E

1 NIKE, Inc. 39,117 4,772 4,029 10.3% 23,717 4,466 14,677 0.62

2 Adidas AG 23,640 2,673 1,976 8.4% 20,680 2,220 13,623 0.66

3 PUMA SE 5,502 436 262 4.8% 4,378 518 2,458 0.56

4 Skechers U.S.A., Inc. 5,220 518 347 6.6% 4,893 825 2,357 0.48

5 Steven Madden, Ltd. 1,787 181 141 7.9% 1,279 264 437 0.34

6 Under Armour 5,267 237 92 1.7% 4,844 788 2,693 0.56

7 ASICS Corporation 378 11 7 1.9% 316 39 164 0.52

8 Foot Locker, Inc. 8,005 710 491 6.1% 6,589 907 4,116 0.62

9 Crocs, Inc. 1,231 488 119 9.7% 739 108 607 0.82

10 Rocky Brands, Inc. 270 22 17 6.4% 206 16 41 0.20

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Retail Industry – Home Improvement
Industry Overview:
The concept of home improvement, home renovation, or remodeling is the process of renovating or making
additions to one's home. Home improvement can consist of projects that upgrade an existing home interior
(such as electrical and plumbing), exterior (masonry, concrete, siding, roofing), or other improvements to the
property (i.e. garden work or garage maintenance/additions). The total home improvement market size was
estimated to be around $94n in 2018. The average annual home improvement expenditure per homeowner
amounted to $7560 US dollar in 2018 from $6650 a year before. The home improvement retail industry has
been growing at a rate of 5% during the last five years and has outperformed other retail categories. Home
improvement market is expected to grow at an annual rate of ~3% over the next five years and would cross
$450bn US dollar by 2023. The online platforms generate ~10% of sales and are growing at a rate of over 20%
which is much higher than the overall industry growth.

Market Dynamics:
In 2018, home center stores generated a revenue of $245.5bn in US. This figure is expected to reach $270bn
in the next five years. Home Depot and Lowe’s dominate the market with a combine market share of ~85%.
Ace hardware had twice the number of stores of either the Home Depot or Lowe’s in 2018. However, Ace
Hardware falls into the hardware store category and thus has a much smaller store size than home centers.
Other major players in the industry are Meards Stores and Stores of the Do It Best Corporation.

Industry Problems and Prospects:

The home improvement industry had a good run in recent years due to a strong US economy and low
unemployment rate. Fed cutting interest rate decreased adjustable-rate mortgage payment. Total
homeowner equity doubled in the last five years. People who owned their own home felt richer and was
ready to put more money for home renovation. Another thing that helped the growth was the relative age
of the US’s housings. Approximately 80% of the nation’s 137 million homes are at least 20 years old and about
40% of them are more than 50 years old. Millennials entering into the job market and owning their own home
also contributed to the sales of home improvement products.
The home improvement industry is also facing some problems lately. The industry witnessed a shortage of
skilled labor to keeping up with growth and marketing and administrative costs in recent years damaging
the margins. Most of the raw materials and some end products are outsourced from China. Recent trade
war with China has resulted in a 25% tariff imposition on construction material items such as blocks, wall, and
floor tiles and other cement additives. This has caused the gross margin to shrink for the business.

Recent performance and impact of COVID 19

Building materials and garden equipment store sales stood at $33.6bn in the first quarter of 2020 but witness
a YoY growth of 1%. Sales figure in 2019 was $89.0bn within the same period. On the other hand, furniture
and home furnishing store sales rose 0.4% in the first three months of 2020. Total sales of furniture and home
furnishing products were 25.6bn in the first three months of 2020 compared to 25.5bn for the same time a
year earlier. Although in most regions, home improvement stores were deemed as an essential business and
were allowed to remain open, coronavirus had significantly reduced the foot traffics and thus sales in brick
and mortar stores. Consumers at this moment would look to hold cash and not spend on anything except
necessities. Moreover, hardware and home improvement stores exhibit strong seasonality and bulk of its sale
(about ~30%) is generated between April and July. So the lookdown is likely to have a major impact on sales
in 2020. Companies would have to offer discounts to get rid of their seasonal products and to manage their
inventory. The industry however, is expected to recover swiftly as the economy opens. With the current low
mortgage rate and fed rate standing at 0%, demand for commercial and residential properties is likely to
rise.

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 Key Financial indicators:
List of selected home improvement retail companies
Financial metrics (latest annual report in US $mn)
Operating Net profit Total
SL Name of the comapany Revenue profit Net profit margin Total assets Cash liabilities D/E

1 The Home Depot, Inc. 110,225 15,843 11,242 10.2% 51,236 2,133 54,352 1.06

2 Lowe's Companies, Inc. 72,148 6,314 4,281 5.9% 39,471 716 37,499 0.95

3 Wesfarmers Limited 27,818 2,404 5,510 19.8% 18,333 795 8,362 0.46

4 Floor & Decor Holdings, Inc. 2,045 159 151 7.4% 2,324 27 1,560 0.67

5 Fiskars Oyj Abp 1,090 60 52 4.7% 1,364 9 600 0.44

Haverty Furniture
6 Companies 802 27 22 2.7% 560 76 300 0.53

7 Lumber Liquidators Holdings 1,093 17 10 0.9% 596 9 435 0.73

8 Calloway's Nursery, Inc. 57 6 4 7.6% 37 7 17 0.47

9 Kingfisher plc 11,685 578 218 1.9% 10,000 229 3,343 0.33

10 Grow Generation Corp. 80 2 2 2.3% 72 13 18 0.25

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Disclosure
VintValley does not recommend any individual to buy / hold / sell any investment instruments reflected
within this document or throughout its site. Our research have been compressed into a single document
by collecting information from multiple sources on the internet. All investment involves risk. VintValley
does not guarantee future results or returns. Past performance is not indicative of future results. There is
no guarantee of any specific outcome or profit. You should be aware of the real risk of loss in following
any strategy. Investors may get back less than invested. Investments or strategies mentioned in this
material may not be suitable for you. This material does not take into account your particular investment
objectives, financial situation or needs and is not intended as recommendations appropriate for you.
You must make an independent decision regarding investments or strategies mentioned in this material.
Before acting on information in this material you should consider whether it is suitable for your particular
circumstances and strongly consider seeking advice from your own financial or investment adviser.

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