It’s no secret the warmer weather played a large role this holiday season. The total weather impact on Apparel Specialty Stores alone was a negative $572 million from November 1 through December 31, 2015 (vs. the same period last year). This does not include apparel sold through dept. stores, discounters, online. Join Marie Driscoll, CFA, from the Fung Business Intelligence Centre and Planalytics for our Holiday Recap Webcast. The webcast will provide an analysis of the post-holiday shopping season. Topics covered on this webinar include: • A recap of initial results and trends from the holiday season. • A recap of the weather events of the past several weeks. • A review of weather’s impact on total results and specific business segments. • The impact of weather on post holiday / January sales including gift card redemption.

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2015 HOLIDAY RECAP
WEBCAST

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US 2015 HOLIDAY UPDATE
Deborah Weinswig
Executive Director – Head of Global Retail & Technology
Fung Business Intelligence Centre
2

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Agenda
• Market Insights
Nuggets from the Holiday Season
• Consumer Insights
Macro Trends and Outlook
3

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Holiday Themes
• Highly promotional holiday
– Women’s apparel bounces back, up 10%+;
while Men’s lagged
– Double digit growth in furniture sales suggest
consumers willing to spend on big ticket items
(MasterCard Advisors)
• Earlier and later shopping
– Last year, 1 in 4 shoppers bought a Christmas
gift before Halloween
– Almost half did the majority of shopping before
Cyber Monday
– December foot traffic slow until final surge in
2015’s final week
• Bifurcation of Spending
– Luxury slows with strong US$ and fewer
tourists spending
Neiman
Marcus
Saks
Nordstrom
Bloomingdale’s
Ann
Taylor
Costco
Macy’s
Dillard’s
Supervalu
JCPenney
Kohl’s
Kroger
Safeway
Drugstores
(CVS/
Walgreens)
BJ’s/Sam’s
Club
Target
Kmart/Sears
Walmart
Primark
Dollar
Stores
Aldi/Lidl

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Mixed Holiday Results Despite Healthy Consumers
Source:
NRF,
FBIC
Es2mate

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Early Holiday Data
• Holiday spending between Black Friday and Christmas Eve up 7.9%
according to MasterCard Advisors Spending Pulse
• Holiday online sales rose 20% year-over-year
• Free shipping is the “new normal” – Demandware reports 88% of US
online retail purchases qualified to free shipping on Cyber Monday
• Amazon reported a massive 2015 holiday season, adding 3 million
new Amazon Prime subscribers and shipping more than 200 million
items for free to Prime subscribers . Almost 70% of Amazon
customers shopped on a mobile device during the holiday period
• During the first 36 days of the November-December 2015 holiday
season, ComScore reported U.S. retail e-commerce spending from
desktop computers to have reached $35.4 billion, marking a 6%
increase versus the corresponding days last year

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Mixed Holiday Results ---Final Tally Still to Come
• US retail sales +2.9% week ended January 2 and
+2.2% for December, says Johnson Redbook
• RetailNext reports December US traffic drops (-5.8%), off (-6.4%) in
November/December holiday shopping period
– December sales were off (-0.4%), an improving trend as average
transaction value rose 3.6%.
– Regionally, Northeast and West sales up 2.7% and 3.0%; offset by
(-1.8%) drop in the South and (-2.3%) in the Midwest
• Mixed comps Costco, JC Penney and L Brands report positive comps
and Buckle and Macy’s report comp declines

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December Comps
• (-4.7%) combined November-December comp at Macy’s though digital
sales rose ~25%
“About 80% of our year-over-year declines in comparable sales can be attributed
to shortfalls in cold-weather goods such as coats, sweaters, boots, hats, gloves
and scarves.” CEO Terry Lundgren
• JC Penney November-December + 3.9% lapping +3.7% last year
“Despite unprecedented warm weather that significantly affected apparel sales,
our focus of private brands, omnichannel execution and a compelling gift giving
selection resulted in strong holiday sales.” CEO Marvin Ellison
• L Brands December comp + 8%%
“Best December ever.” CEO Les Wexner

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Consumer & Retailer Behavior – Holiday 2015
• Shoppers began their holiday shopping early this year – nearly half
started shopping before the Black Friday weekend
• Online has become a major channel for holiday shopping, with 6 in
10 of those surveyed saying they will shop mainly online
• 4 in 10 shoppers surveyed planned to spend more than $500 and
33% of young shoppers planned will increase their spending
compared with last year
Source: FBIC Global & Retail Tech Survey, Based on 1, 044 valid responses by US residents from December 19-22, 2015.

10. © 2015 Planalytics, Inc. All Rights Reserved. Proprietary and Confidential.
Home and Apparel Top Preforming E-commerce Categories this
Holiday
Absolute
Dollar Rank Product Category
Season To Date*Y/Y
Growth Rate
8
7
1
4
9
14
3
18
Home & Garden
Furniture, Appliances, & Equipment
Apparel & Accessories
Consumer Packaged Goods
Event & Movie Tickets
Sports & Fitness
Consumer Electronics
Video Games
Very Strong
Strong
Strong
Strong
Strong
Moderate
Moderate
Moderate
Source:
comScore
e-­‐Commerce
Measurement
*
Based
on
corresponding
shopping
days
in
2014

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Macro Backdrop Favorable
1. Lower gas prices continue to provide a silver lining for US consumers
2. Residential Heating Oil Price decreases, down 29% from year ago
3. November retail sales growth rose modestly from October’s pace
4. According to estimates by Bloomberg the US unemployment rate is expected to hold
at November’s 7-year low of 5%, down from 5.6% in December 2014
5. Total housing starts above 1 million units, longest stretch since 2007
6. Real personal disposable income increased by 3.5% and wages rose 4.5% in
November YoY
7. Savings rate drops modestly in November
8. Consumer confidence rebounded to 91.3 in November
9. Inflation/Deflation
a) Apparel prices remain deflationary
b) Food prices fell into deflationary range in November
10. Small Business optimism dropped due to uncertainty about interest rates

12. © 2015 Planalytics, Inc. All Rights Reserved. Proprietary and Confidential.
Macro Backdrop Cheatsheet
Indicator
Period
2015
2014
YoY
change
Gas
Price
($
per
gallon)
Avg
(Nov./Dec.)
$2.1
$2.7
-­‐22%
Per
Capita
Disposable
Personal
Income
Nov.
$42,274
$40,996
3.1%
Savings
rate
Nov.
5.5%
4.6%
90
bps
The
S&P/Case-­‐Shiller
20-­‐City
Composite
Home
Price
Index
Oct.
182.8
173.2
5.6%
Unemployment
rate*
Q4
5.0%
5.7%
(70)
bps
University
of
Michigan
Consumer
SenMment
Avg
(Nov./Dec.)
92.0
91.2
0.8%
Source:
Haver
Analy2cs
*Bloomberg
Es2mate

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1) At The Pump Gas Prices Hit 11-month Low
• Gas prices were $2.03 per gallon on January 4, 2016, down 8.4% from
a year ago
• Consumers are saving an average of $18 per tank compared to two
years ago, freeing funds for gifts, entertaining and travel
Sources:
Energy
Informa2on
Agency,
Interna2onal
Monetary
Fund
and
Rhodium
Group
$2.00
$2.50
$3.00
$3.50
$4.00
Nov-­‐1
Nov-­‐1
Dec-­‐1
Dec-­‐1
Dec-­‐1
Jan-­‐15
Jan-­‐15
Feb-­‐15
Feb-­‐15
Mar-­‐1
Mar-­‐1
Apr-­‐15
Apr-­‐15
May-­‐1
May-­‐1
Jun-­‐15
Jun-­‐15
Jun-­‐15
Jul-­‐15
Jul-­‐15
Aug-­‐1
Aug-­‐1
Sep-­‐15
Sep-­‐15
Oct-­‐15
Oct-­‐15
Nov-­‐1
Nov-­‐1
Nov-­‐1
Retail
Gasoline
Price
($/Gallon)
This
Year
Last
Year

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2) Residential Heating Oil & Propane
• US Residential Heating Oil Price averaged $2.24 per gallon in December,
29% lower than one year ago
• US Residential Propane Prices averaged $1.98 per gallon in December,
17% lower than one year ago
Sources:
Energy
Informa2on
Agency,
Interna2onal
Monetary
Fund
and
Rhodium
Group
$2.36
$1.96
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
Nov-­‐14
Dec-­‐14
Dec-­‐14
Jan-­‐15
Jan-­‐15
Feb-­‐15
Feb-­‐15
Mar-­‐15
Mar-­‐15
Mar-­‐15
Apr-­‐15
Apr-­‐15
May-­‐15
May-­‐15
Jun-­‐15
Jun-­‐15
Jul-­‐15
Jul-­‐15
Aug-­‐15
Aug-­‐15
Aug-­‐15
Sep-­‐15
Sep-­‐15
Oct-­‐15
Oct-­‐15
Nov-­‐15
Nov-­‐15
Dec-­‐15
Dec-­‐15
US
Residen`al
Hea`ng
Oil
&
Propane
Price
($/Gallon)
ResidenMal
HeaMng
Oil
ResidenMal
Propane

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3) November Retail Sales rose 0.7% year-over-year;
versus a 3.8% year-over-year pace in November 2014.
Through
November
30,
2015,
Seasonally
adjusted
annual
rate
Source:
US
Census
Bureau/Haver
Analy2cs
(10)
(5)
0
5
10
15
03
04
05
06
07
08
09
10
11
12
13
14
15
Total
Retail
Sales
Ex
Autos

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4) Bloomberg Estimates Another Strong Job
Report for Q4 2015
• Bloomberg estimates Q4 holding steady with October and
November rates of 5.0%
• Compares with 5.6% for 2014 YE
4
6
8
10
12
04
05
06
07
08
09
10
11
12
13
14
15
US
Unemployment
Rate
%
Source:
Bureau
of
Labor
Sta2s2cs

17. © 2015 Planalytics, Inc. All Rights Reserved. Proprietary and Confidential.
5) Total Housing Starts Above 1 Million Units,
Longest Stretch Since 2007
• Privately-owned housing starts in November were at a seasonally adjusted annual rate of
1,173,000. This is 10.5% above the revised October estimate and 16.5% above November
2014.
• Single-family housing starts in October were at a rate of 768,000; this is 7.6% above the
October figure of 714,000.
Through
November
30,
2015,
Seasonally
adjusted
annual
rate
Source:
US
Census
Bureau
Released
on
December
16,
2015
Through
November
30,
2015,
Seasonally
adjusted
annual
rate
Source:
US
Census
Bureau
Released
on
December
16,
2015
(60)
(40)
(20)
0
20
40
60
(100)
(50)
0
50
100
150
200
04
05
06
07
08
09
10
11
12
13
14
15
Monthly
Housing
Starts
YoY%
MulMfamily-­‐Le]
Axis
Single
Family-­‐Right
Axis
21.3
14.6
(10)
0
10
20
30
(20)
(10)
0
10
20
30
40
50
60
70
Monthly
Housing
Starts
YoY%,
last
12
months
MulMfamily-­‐Le]
Axis
Single
Family-­‐Right
Axis

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6) Real Personal Disposable Income and Wages
Continued to Improve
• Real disposable income increased by 3.5% in November YoY, down
from October’s revised 3.8%
• Wages & salaries rose 4.5% in November YoY, slightly lower than
October’s 4.9%
Through
November
30,
2015
Source:
Bureau
of
Economic
Analysis
Released
on
December
23,
2015
(8)
(6)
(4)
(2)
0
2
4
6
8
10
04
05
06
07
08
09
10
11
12
13
14
15
Real
Disposable
Income
&
Wages
and
Salaries
YoY
%
Wages
&
Salaries
Disposable
Personal
Income
3.5
4.5
0
1
2
3
4
5
6
Real
Disposable
Income
&
Wages
and
Salaries
YoY
%
Wages
&
Salaries
Disposable
Personal
Income
Through
November
30,
2015
Source:
Bureau
of
Economic
Analysis
Released
on
December
23,
2015

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7) November’s Personal Saving Rate drops
modestly to 5.5%
Sources:
Bureau
of
Economic
Analysis
Seasonally
Adjusted
Annual
Rate
4.0
4.5
5.0
5.5
6.0
Oct-­‐2013
Feb-­‐2014
Jun-­‐2014
Oct-­‐2014
Feb-­‐2015
Jun-­‐2015
Oct-­‐2015
Personal
Savings
Rate
(%)

20. © 2015 Planalytics, Inc. All Rights Reserved. Proprietary and Confidential.
8) Consumer Confidence and Sentiment Increases
92.6
96.5
40
60
80
100
120
Dec-­‐10
Dec-­‐11
Dec-­‐12
Dec-­‐13
Dec-­‐14
Dec-­‐15
University
of
Michigan
The
Conference
Board
20
Through
December
2015
Source:
The
Conference
Board/University
of
Michigan
• The University of Michigan’s Index of Consumer Sentiment reached 92.6 in December
2015, up from 91.3 in November
• The Conference Board’s Consumer Confidence Index also improved in December,
reaching 96.5, up from 92.6 in November
• Higher readings could be a positive heading into 2016

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9a) Inflation/Deflation (Apparel Prices)
• Apparel CPI off 1.5% YOY in November reflecting continued US
apparel price deflation
-­‐1.50
-­‐1.00
-­‐0.50
0.00
0.50
1.00
1.50
2.00
All
Urban
Consumer
(CPI-­‐U)
Apparels
Through
November
2015
Source:
Federal
Reserve
Economic
Research
Seasonally
Adjusted

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9b) Inflation/Deflation (Food Prices)
• Food prices fell into deflationary range in November, though still 1.3%
higher than November 2014
-­‐0.40
-­‐0.20
0.00
0.20
0.40
0.60
0.80
1.00
1.20
All
Urban
Consumer
(CPI-­‐U)
Food
Through
November
2015
Source:
Federal
Reserve
Economic
Research
Seasonally
Adjusted

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10) Small Business Optimism Dropped In November
• NFIB Small business optimism index dropped 1.3 points to 94.8, pointing to
continued uncertainty from the Federal Reserve on interest rates
Source:
Advisor
Perspec2ves

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