16 December 2025 | 8:02PM HKT Equity Research China Restaurants: FMD expert call takeaways: UE pressure; Subsidy retreat; Store expansion on white-space/favorable franchise policy On Dec 16, we hosted an expert session on China's freshly made drink (FMD) market, with a franchisee who runs multiple milk tea shops in Zhejiang/Shanghai province, including Chagee, Chapanda, Fridayeve, etc. Key takeaways: 1) Subsidy retreat and lingering UE pressure: The expert expects subsidies to retreat in the mid/long run. U ...

Core Insights - Burlington Stores, Inc. (BURL) is demonstrating confidence in its growth trajectory with an expanding pipeline of new locations, targeting 110 net new stores by 2026, an increase from the previous target of 100 [2][4] - The company opened 73 net new stores in Q3 of fiscal 2026, contributing to a total sales growth of 7% and comparable sales growth of 1% [3][7] - The retailer's strategic expansion, supported by opportunistic lease acquisitions, positions it for solid growth and market share gains into 2026 [4][7] Expansion Strategy - Burlington's new-store pipeline reflects market opportunities and the scalability of its strategy, with 45 leases secured from Joann Fabrics' bankruptcy aiding the expansion [2][4] - The company has consistently exceeded its target of 100 net new stores annually, indicating a strong likelihood of surpassing its earlier expansion pace [2][4] Financial Performance - In Q3 of fiscal 2026, Burlington's total sales grew by 7%, aligning with the high end of guidance, while comparable sales increased by 1% [3][7] - For Q4 of fiscal 2026, the company anticipates total sales growth between 7% and 9%, with comparable sales expected to be flat to up 2% [3] Market Position - Burlington's shares have gained 11.9% over the past six months, outperforming the industry average of 1.1% [5] - The company trades at a forward price-to-earnings ratio of 24.89, which is lower than the industry average of 29.92, indicating potential valuation attractiveness [6] Earnings Estimates - The Zacks Consensus Estimate for Burlington's fiscal 2026 earnings indicates a year-over-year growth of 17.6%, while the estimate for fiscal 2027 suggests a growth of 13% [13]

Core Insights - Ollie's Bargain Outlet reported third-quarter earnings of $0.75 per share, exceeding analyst expectations of $0.73, while revenue was slightly below estimates at $613.6 million compared to the forecast of $614.56 million [1] - The company experienced a year-over-year sales increase of 18.6%, driven by strong new-store growth and a 3.3% rise in comparable sales [1] Store Expansion and Loyalty Program - Ollie's opened a record 32 new stores during the quarter, bringing the total to 645 locations across 34 states, marking an 18.1% increase from the previous year [2] - The Ollie's Army loyalty program grew by 11.8%, reaching 16.6 million members [2] Financial Performance and Outlook - Operating income increased by 24.5% to $55.4 million, with an operating margin improvement of 40 basis points to 9.0% [2] - The company raised its full-year revenue outlook to between $2.648 billion and $2.655 billion, surpassing previous forecasts and market estimates [3] - Adjusted EPS guidance was also increased to a range of $3.81 to $3.87, up from the prior guidance of $3.76 to $3.84 [3] Future Plans - For fiscal 2026, Ollie's plans to open 75 new stores, primarily in the first half of the year [3]

Core Insights - Dollar General plans to open 450 new stores in 2026, a decrease from the 575 planned for 2025, indicating a more measured expansion strategy [1] - The company has identified approximately 11,000 potential locations in the continental US for future store openings, particularly in areas where competitors are closing [2][3] - Dollar General's executives express confidence in future growth due to the availability of store locations and a lack of competition in new store openings [3] Company Performance - Dollar General opened its 20,000th store early last year and operates various formats, including those focused on fresh groceries and decor for suburban shoppers [4] - The company's third-quarter earnings exceeded analysts' expectations, leading to an increase in profit forecasts for 2025 [4] - Dollar General's stock has risen by 49% year-to-date, reflecting strong market performance [4]

Core Thesis - The bullish thesis on Sprouts Farmers Market, Inc. (SFM) highlights its strong fundamentals and growth potential despite recent stock price declines [1][6]. Company Overview - Sprouts Farmers Market, Inc., founded in 1943 and headquartered in Phoenix, Arizona, is a specialty food retailer focused on fresh, natural, and organic products, catering to health-conscious consumers [2]. - The company offers a wide range of perishable and non-perishable items, including produce, meat, seafood, deli, bakery, grocery, dairy, vitamins, supplements, frozen foods, and natural body care products [2]. Market Positioning - SFM's product offerings have only an 11% overlap with major chains like Walmart and Kroger, emphasizing attribute-driven products such as organic, vegan, plant-based, and non-GMO, which prioritize wellness over price competition [3]. - The customer base is characterized as affluent, environmentally conscious, and loyal to health-focused lifestyles, providing resilience even during economic downturns [3]. Financial Performance - In Q2 2025, SFM reported revenues of $2.2 billion, a 17.3% year-over-year increase, driven by perishable (+16.7%) and non-perishable (+18.3%) categories [4]. - Operating cash flow was reported at $111.2 million, and free cash flow was $32 million, reflecting ongoing investments in store expansion [4]. Growth Strategy - The company added 15 stores in the quarter, maintaining a long-term compound annual growth rate (CAGR) of 9.4% in store growth, bringing the total to 455 locations [5]. - Comparable store sales grew by 10.2%, with strong performance in e-commerce and Sprouts-branded products [5]. - Management plans to open 35 new stores in 2025 and anticipates further double-digit sales growth despite a normalizing slowdown in same-store sales [5]. Stock Performance - Despite solid fundamentals, SFM's stock has fallen over 36% in the past three months due to market concerns regarding slowing same-store growth, competition, and perceived consumer weakness [6]. - The current stock price around $105 is viewed as an attractive entry point, with potential opportunities to add on weakness toward $90 [6][7]. - SFM continues to generate strong free cash flow and shareholder returns through share buybacks, indicating a compelling risk-reward profile [7].

Core Insights - Burlington Stores, Inc. (BURL) aims to achieve approximately $1.6 billion in operating income by fiscal 2028, with management expressing confidence in current progress and results [1][8] Financial Performance and Projections - For fiscal 2025, Burlington anticipates adjusted EBIT margin expansion of 60-70 basis points, exceeding initial forecasts, and achieving 170 basis points of the previously identified 400-basis-point expansion opportunity [2] - The Zacks Consensus Estimate for Burlington's current fiscal-year sales and earnings per share indicates year-over-year growth of 7.8% and 16.5%, respectively, with recent upward revisions in earnings estimates for fiscal 2025 and 2026 [9] Growth Strategy - Burlington plans to open at least 110 net new stores in fiscal 2026, leveraging strong performance from recently opened locations and attractive real estate opportunities, including leases from the Joann Fabrics bankruptcy [3] - The company expects this expansion to support high single-digit total sales growth and provide significant scale benefits [3] Market Conditions - Short-term sales performance has faced challenges, with a noted decline in store traffic during the fiscal third quarter, despite stronger conversion rates and higher basket sizes [4] - The company's reliance on seasonal merchandise and weather-driven demand increases exposure to potential consumer spending weaknesses, particularly among lower-income shoppers [4] Operational Discipline - Despite short-term fluctuations, Burlington's consistent margin growth, robust new-store pipeline, and resilient off-price demand create a solid foundation for achieving its fiscal 2028 operating income target [5]

Core Insights - Urban Outfitters' brands experienced a successful Q3 with full-price selling, and the company anticipates a strong holiday season despite customers waiting for deeper discounts [2][4] - The company exceeded expectations due to the turnaround of its teen-focused brand and overall sales strength, with notable contributions from the FP Movement activewear brand [3][4] - Urban Outfitters is focusing on private labels, marketing campaigns, and store expansion to drive growth and gain market share [4][6] Financial Performance - Q3 net sales increased over 12% year-over-year to a record $1.5 billion, with retail net sales rising 9.6% and comparable sales (comps) increasing by 8% [8] - Comps rose 12.5% at Urban Outfitters, 7.6% at Anthropologie, and 4.1% at Free People, while Nuuly subscription net sales surged 48.7% [8] - Gross margin expanded by 31 basis points to 36.8%, although tariffs impacted margins, which are expected to worsen in Q4 [8] Strategic Initiatives - The company plans to close about 17 stores while opening nearly 70 new locations, including 25 FP Movement stores, 18 Free People stores, and 16 Anthropologie stores [5] - The increase in traffic both online and in stores is expected to continue into Q4, contributing to anticipated sales growth during the holiday season [4][6] - The diversified brand portfolio is viewed as a major strength, providing confidence in market share growth regardless of the operating environment [7]

Core Insights - Sprouts Farmers Market, Inc. (SFM) is pursuing an aggressive store expansion plan with a target of 10% unit growth by 2027, supported by a strong real estate pipeline and new store performance [1][8] Expansion Plans - In the financial year 2025, SFM plans to open 37 new stores, an increase from the initial target of 35, bringing the total to 464 stores across 24 states [2] - The company aims to accelerate its expansion in 2026, with a significant pipeline of 140 approved locations, focusing on new territories in the Midwest and Northeast [3] Capital Expenditures - To support the expansion, SFM anticipates capital expenditures of $230 million to $250 million, targeting high-demand markets and engaging with local communities [4][8] Financial Performance - SFM's shares have decreased by 44.7% over the past year, while the industry has seen a decline of 19.1% [5] - The forward 12-month price-to-sales ratio for SFM is 0.83, higher than the industry average of 0.24, indicating a valuation premium over Target but a discount compared to Walmart [6] Sales and Earnings Estimates - The Zacks Consensus Estimate indicates a year-over-year sales growth of 14.2% and earnings per share growth of 40.5% for the current financial year [9] - Current quarter sales are estimated at $2.16 billion, with a year-over-year growth estimate of 8.14% [10] - Earnings per share for the current year are projected at $5.27, reflecting a year-over-year growth of 40.53% [11]

PesoRama Announces Grand Opening of Stores #29, #30, and #31November 17, 2025 7:30 AM EST | Source: PesoRama Inc.A live stream of the ribbon cutting and new store opening celebration of store 29 will be held on Friday, November 21 at 3:00 PM CDMX / 4:00 PM EST on JOi's Instagram page: @joi.dollar.plusToronto, Ontario--(Newsfile Corp. - November 17, 2025) - PesoRama Inc. (TSXV: PESO) ("PesoRama" or the "Company"), a Canadian company operating dollar stores in Mexico under the JOi Dollar Plus br ...

Core Insights - Tractor Supply Company (TSCO) is experiencing consistent market share gains and favorable customer trends, driven by its effective everyday low-price strategy and strong pet business [1][2] - The company's Life Out Here lifestyle assortment and convenient shopping formats are attracting new customers and enhancing its market position [1] Store Growth Initiatives - TSCO opened 29 new stores in Q3 2025 and plans to open approximately 100 additional stores in 2026, indicating a solid expansion pipeline [2][10] - About 55% of TSCO's locations now feature the Project Fusion layout, with nearly 700 garden centers across its network, showcasing the effectiveness of its growth strategy [2][10] Life Out Here 2030 Strategy - The strategy focuses on deepening community engagement, driving store traffic, and enhancing customer satisfaction through improved store accessibility and local relevance [3] - Store expansion is a core pillar of this strategy, supporting sustainable growth in both urban-edge and rural markets [3] Neighbor's Club Loyalty Program - The Neighbor's Club loyalty program is performing well, accounting for over 80% of sales in the reported quarter, with significant expansions in offerings to reward members faster [4][10] - Gains in member retention and spending per member highlight the program's effectiveness in capturing new customers [4][5] Customer Engagement and Value Proposition - TSCO leverages its loyal customer base to provide added value through personalized offers and seamless access to in-store and online experiences [5] - The Neighbor's Club serves as a major tool for driving repeat visits and deepening brand loyalty, aligning with the rural lifestyle needs of its members [5] Price Performance and Valuation - TSCO shares have gained 4.3% year to date, outperforming the industry's growth of 2.4% [8] - The company trades at a forward price-to-earnings ratio of 24.33X, compared to the industry's average of 17.4X, indicating a premium valuation [9] Earnings Estimates - The Zacks Consensus Estimate for TSCO's EPS indicates year-over-year growth of 3.4% for 2025 and 10.2% for 2026, with estimates remaining intact over the past 30 days [11]