Well, Starbucks’ US comp-sales were not down -1% as investors feared, but flat for the quarter, which was a +200bps QoQ improvement. Additionally, the comp was not driven by more pricing as average check decelerated -100bps QoQ to only contribute +100bps YoY. Comp-traffic/transaction was the driver, improving from -4% to -1%, or around +300bps QoQ. That 300bps increase was ahead of observed traffic (Advan), which strengthened by +80bps. (Others were suggesting a -160bps QoQ deterioration.

O’Reilly once again outperformed the competition and grew meaningful market share, especially in commercial (the DIFM business). Overall comp-sales increased +5.6% in an industry that grew around +1.0% (CB MRTS ) and ahead of NAPA (+2.2%). O’Reilly’s 2- and 3-year comp CAGRs, and new store productivity all strengthened. Commercial comp-sales were around +10.3%, whereas DIY lagged at +1.2%. The more sluggish DIY figure likely reflects the economic and societal pressures facing the non-affluent .

Tractor Supply (TSCO) reported solid top- and bottom-line results for Q3. (TSCO’s Q3 ended on September 27th.) Comp-sales increased +3.9%, driven by comp-transactions +2.7%. Adding in the contribution from new stores, sales increased +7.2%. That increase, plus slightly higher margins, lifted gross profits by +7.7%. The mid-point of guidance puts the Q4 comp in the range of +3.0%. In terms of the quarter cadence, CEO Hal Lawton shared, “We saw a strong start to the quarter with spending trends moderating into September.

Last week, we had the opportunity to present our views and data on the US consumer at the National Association for Business Economics’ Annual Meeting (the Chair Jerome Powell event). We shared that the “right upward arm” of our K-shaped economy had picked up sharply since early August (presentation here ) and we expected that to continue through year-end should the stock market carry on strongly. (Our loyal readers will know that the high-end is why we believe that September retail sales were stronger as well.

Two developments of importance this week to the eating / food industry that we wanted to weigh in on, Albertsons’ quarterly results and General Mills’ investor day. The net-net is that the underlying cyclical and secular headwinds are intensifying for both the grocery and the limited-service restaurant industries. Albertsons Companies delivered a +2.3% comp-sales increase for all its banners. However, excluding inflation and GLP drugs (weight loss), grocery sales on a “real” basis fell -2.

As we previewed last week, high-end consumer spending in the US accelerated during Q3, which drove better retail sales for September and which we see in LVMH’s much better organic revenue growth for the quarter. Moreover, we also take Dollar Tree’s reiteration of its guidance and **Domino’**s very strong Q3 US Comps (+5.2%) as added evidence that there has not been a material degradation in spending by the less-affluent (despite market fears that there was and some data pointing to degradation).

The Census Bureau was to release its report of September retail sales on October 16th. That is on pause now given the shutdown; as a result, folks will have to look at alternative data to understand how the US consumer is doing – a popular concern these days given the weakish new hiring and net job growth. With that, we are pleased to report that we believe retail spending (as defined by the Census’ report ) during September accelerated from August’s healthy pace, with the incremental driver being stronger spending by affluent households and continued improvement in housing-related demand.

Turnarounds are messy and non-linear, and that’s clear in Nike’s store foot traffic, as shown. A lot of the traffic decline is centered on weaker consumer spending by the non-affluent, which especially hits Nike’s classic styles (Air Force 1, Air Jordan 1, and Dunk), and Nike’s ongoing challenges in athleisure sportswear, in what is a weaker category overall vs. its post-pandemic upsurge. However, in the foot traffic pattern we see a firming up occurring given the moderating volatility and the favorable direction of the “swoosh.

Given our recent analysis on how extended store hours were driving additional visits to **Sam’s **and Costco, we were interested in what Costco had to say about it on yesterday’s earnings call. CEO Ron Vachris said, “We estimate these incremental hours have added about 1% to weekly U.S. sales since implementation. This has been very well received by our members.” CFO Gary Millerchip shared, “Excluding the membership fee increase and FX, membership income grew 7% year-over-year.

Yesterday we took time to visit our nearby Apple store to check on the new iPhone Air (yes, it’s a very nice device) and was surprised by the high bustle of activity at the store despite it being 2:00 on a Wednesday afternoon. We were also struck by the number of folks saying to the salesperson, “We’re here to get new phones.” There were also numerous visitors trying on Apple Watches.