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After the market on 3/20/19, WSM reported a $0.14 beat, composed of a sales, SGA and buyback beat, offset by a GM miss. WSM reported in-line comps of +2.4% vs. Cons of +2.4%, with strong e-commerce growth offset by brick-and-mortar comps. We remain concerned about intense price competition in the home furnishings space and mid-teen online category growth that will continue to deleverage the brick-and-mortar footprint. While WSM’s brands remain strong, we believe that consumer buying behavior will continue to migrate online and the demands for free and rapid shipping will continue to increase the cost of doing business to satisfy the customer. Remain cautious of long-term margin erosion and therefore reiterate Peer Perform. Stock was up 3% in after-market trading fading to up 1% pre-market open. 

An Iconic Platform Launch. We recently visited the NYC Kate Spade flagship with TPR management, including EVP, President of Kate Spade North America and Head of Global Merchandising Emilia Fabricant; Interim CFO Andrea Resnick; VP Investor Relations Christina Colone; as well as members of the Kate Spade field and store organization. We came away with renewed conviction in the new Kate Spade platform launch (rather than simply a new product launch). Platform launches reposition a brand for the long-term. In this note, we showcase photos of the new product, which was made available in stores in early February. The story is about the forward merchandise under new creative director Nicola Glass. We estimate that by the end of March ~50% of the product will be new (accounting for ~25% of FY3Q19 sales) and will build to 100% new product by the end of June (accounting for ~75% of FY4Q19 sales). 

In FY2Q19, two critical key metrics delivered surprise upside and are drivers of future growth: 1) active clients of ~3M (Cons 2.95M) up 18% YoY and 2) RevPAC of $463 (Cons $467) up 6.1% YoY. Retained customer drove 88% of revenues and the strength of this customer segment resulted in the ability to push an incremental $15 million in brand spending into FY3Q19. After market on 3/11/19, SFIX reported FY2Q19 EPS of $0.12 vs Cons of $0.05. Shares surged 25% during the trading session.

ANF continues to defy expectations. BMO on 3/6/19, ANF delivered another solid quarter on higher than expected comps and better than expected gross margin. Hollister remains on track with a 6% comp on top of an 11% comp last year, while A&F brand's comp inflected negatively due to weakness in women's tops and dresses. In addition, brick-and-mortar comps remained negative this quarter. As such, our long-term Underperform thesis remains unchanged, as we are hard pressed to see the company inflect back to positive brick-and-mortar comps across the chain without the reliance of discounting over the next few years. In addition, with fixed costs for the sector on the rise, we see future risk to margins and note Teen competitors (both online and offline) continue to pressure pricing. Reiterate Underperform as we believe Teen space remains highly competitive and will continue to lack substantial pricing power. ANF is up 21% since reporting 4Q18 earnings BMO on 3/6/19.