What's Trending with TickerTrends #10

Your regular monitor for interesting social arbitrage ideas.

Dec 09, 2024

TickerTrend’s Monday Monitor is our overview of interesting social arbitrage event-driven trades and companies that could potentially benefit from these. We aim to find the best ideas driven by social arb. If you have any interesting ideas, feel free to contact us on X or join our Discord.

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Disclaimer. This newsletter is provided for informative purposes only. No significant due diligence has (yet) been performed on the names on this list. This overview does not constitute advice; always do your own due diligence.

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Earnings Recap:

You can get the transcripts for all earnings calls here: https://www.tickertrends.io/transcripts. This week the most prominent companies to report were the following and these are the highlights from the calls:

1. Lululemon Athletica Inc ($LULU):

Lululemon delivered a solid performance in Q3 2024, exceeding expectations and highlighting the strength of its global growth strategies. Total revenue increased by 9% (8% in constant currency) to $2.4 billion, with growth fueled by strong international momentum and steady North American performance. Comparable sales rose 3% on a constant dollar basis, with international markets driving the results. Adjusted earnings per share (EPS) grew 13% year-over-year to $2.87.

The company’s international business was a standout, with China Mainland revenue surging 39% (36% in constant currency) and the rest of the world growing 27% (23% in constant currency). In North America, revenue increased 2%, with strong growth in Canada offsetting flat U.S. performance. Key categories such as men’s apparel grew by 9%, while women’s apparel and accessories each increased 8%. Gross margin expanded by 40 basis points to 58.5%, driven by improved product margins and disciplined inventory management. Inventory growth was limited to 8%, reflecting strategic controls and alignment with demand.

Lululemon continued to execute on its Power of Three x2 growth plan, aiming for $12.5 billion in revenue by 2026. The company repurchased $409 million of stock during the quarter and expanded its share repurchase program by $1 billion, reflecting confidence in its long-term outlook. Management is optimistic about sequential improvements in its U.S. business, driven by increased newness in product assortments and an updated organizational structure within its product and brand teams. The goal is to return to historical levels of newness by Q1 2025.

International expansion remains a key growth driver, with the company planning to enter new markets, including Italy as a company-operated market and Denmark, Belgium, Turkey, and the Czech Republic through franchise partnerships. Additionally, Lululemon is optimizing its store portfolio, with larger store formats such as its Emporium Mall flagship in Melbourne contributing to higher productivity and customer engagement.

Management expressed confidence in the holiday season, citing strong Black Friday performance, with record visits to its e-commerce channels and robust full-price sales. The company plans to leverage its holiday traffic to clear through end-of-season inventory while focusing on full-price performance. Despite a shorter holiday shopping season, Lululemon remains confident in its ability to execute effectively.

Looking ahead, Lululemon raised its full-year 2024 revenue guidance to $10.45-$10.49 billion, representing 9% growth. The company also reaffirmed its commitment to modest operating margin expansion over the long term while balancing investments in marketing, technology, and international growth. Although macroeconomic uncertainties and foreign exchange headwinds pose challenges, management remains optimistic about its ability to deliver strong performance through its differentiated product offerings, premium brand positioning, and expanding global footprint.

2. Ulta Beauty Inc. ($ULTA):

Ulta Beauty reported improved results for Q3 2024, with net sales rising 1.7% to $2.5 billion and comparable sales up 0.6%. Diluted EPS increased 1.4% to $5.14, reflecting better-than-expected sales and profitability amid ongoing challenges, including heightened competition, normalization in the beauty category, and a dynamic consumer environment. Fragrance emerged as the strongest-performing category, delivering high single-digit comp growth fueled by new launches and exclusives from brands like Armani, Billie Eilish, and NOYZ. Skin care saw mid-single-digit comp growth, driven by body care brands such as Sol de Janeiro, offset by softness in prestige skin care. Makeup experienced a low single-digit comp decline, with flat performance in prestige makeup supported by new brands like Charlotte Tilbury and DIBS Beauty. Hair care and services achieved modest growth, supported by innovative offerings from brands like Dyson and new salon initiatives.

The company continued to expand its loyalty program, which now boasts 44.4 million active members, a 5% increase year-over-year. Member retention, lapsed member reactivation, and engagement among Platinum and Diamond members contributed to the program’s success. Strategic promotions, including 21 Days of Beauty and a new Glossy Hair Event, effectively drove traffic and sales. Exclusive collaborations, such as a "Wicked"-themed collection and a Mini Brands partnership, resonated with Gen Z and millennial audiences, driving engagement and sales.

Ulta enhanced its digital capabilities with tools like GLAMlab 2.0, digital buying guides, and the UB Community platform, which saw significant early adoption. The company’s retail media network, UB Media, delivered strong results, leveraging partnerships with Roblox and introducing non-endemic advertising to enhance vendor relationships and incremental revenue.

The company’s gross margin declined 20 basis points to 39.7%, reflecting deleverage of fixed costs and brand mix, offset by lower e-commerce shipping costs and improved inventory shrink trends. SG&A expenses grew 3.2% due to higher payroll and strategic investments but were partially offset by disciplined expense management. The company returned $267 million to shareholders through share repurchases in Q3.

Ulta narrowed its full-year 2024 guidance, expecting net sales of $11.1-$11.2 billion and flat-to-negative 1% comparable sales growth, with EPS between $23.20 and $23.75. For the holiday season, management is optimistic about strong plans to attract value-focused consumers through new product launches, festive in-store experiences, and omnichannel convenience. Looking ahead to 2025, Ulta remains focused on long-term growth, supported by investments in assortment innovation, loyalty engagement, and operational efficiencies, while navigating ongoing competitive and macroeconomic challenges.

Trends this week:

1. Intuit ($SEB):

Intuit has unveiled a comprehensive suite of AI-driven tax solutions designed to streamline tax filing for personal and small business filers, positioning itself as a leader in financial technology. The centerpiece of these innovations is a “done-for-you” tax preparation service that connects customers with a nationwide network of 12,000 experts, including CPAs, EAs, and tax attorneys, enabling taxes to be prepared in as little as two hours. Powered by AI, TurboTax now offers advanced auto-fill capabilities that import and organize data from over 350 financial institutions, minimizing manual input, reducing errors, and ensuring real-time accuracy checks. Seamless integrations with Credit Karma and QuickBooks further enhance the ecosystem, providing users with year-round personalized financial insights and tax optimization tools. Credit Karma members gain access to early refunds (up to 5 days sooner) and Refund Advance loans of up to $4,000 within minutes of IRS acceptance, addressing liquidity needs efficiently.

For small businesses, TurboTax has expanded offerings tailored to the complexities of S-corps, LLCs, and partnerships, integrating with QuickBooks to streamline tax workflows. Intuit has also introduced a generative AI-powered assistant in QuickBooks to automate tasks like generating invoices and estimates, further solidifying its commitment to AI-led innovation. These advancements align with broader trends, as research shows 96% of SMBs find AI tools effective, highlighting strong potential adoption rates.

These initiatives address multiple strategic goals. By simplifying the tax filing process and integrating tools across platforms, Intuit enhances customer retention and cross-selling opportunities, driving revenue growth. Automation reduces operational costs, which could improve margins as adoption scales. The addition of year-round services mitigates the seasonality of tax-related revenues, providing greater stability to earnings. Furthermore, the focus on faster, more transparent refunds and tailored business solutions positions Intuit to capture a larger share of the market in both consumer and small business segments.

These innovations not only cater to the needs of current users but are likely to attract new customers, particularly during the critical 2024 tax season. While the success of these initiatives will depend on adoption rates and execution, Intuit’s ability to combine AI with human expertise positions the company for sustainable long-term growth.

2. Skims x North Face ($VFC):

SKIMS, co-founded by Kim Kardashian, is entering the winter wear market with a groundbreaking collaboration with The North Face, blending SKIMS’ renowned body-sculpting designs with The North Face’s expertise in technical outerwear. This limited-edition collection, available starting December 10, reimagines The North Face’s archival styles through SKIMS’ lens of form-flattering fits and neutral color palettes. Featuring a range of apparel and accessories, the collection includes compressive base layers, cropped puffer jackets, sculpting one-pieces, fleece jackets, waterproof shell pants, adaptive bodysuits, and insulated accessories such as gloves, beanies, and mules. Sizes will range from XXS to 3X, with prices spanning $60 to $1,200, ensuring inclusivity across body types and budgets.

Designed to transition seamlessly from the slopes to cozy après-ski settings, the collection pairs SKIMS’ focus on modern, sculptural silhouettes with The North Face’s performance-driven materials and construction. Key pieces like the Down One Piece and Seam Taped Pants showcase this balance of style and functionality, making them suitable for outdoor activities like skiing and ice skating, as well as casual winter outings. The collaboration has been visually brought to life with a campaign shot by Vanessa Beecroft in the snow-capped mountains of Chile, with a second campaign featuring Kardashian herself set to launch soon.

Kim Kardashian expressed her excitement, calling the collection a milestone for SKIMS as it marks the brand’s first foray into winter apparel. “This collaboration allowed us to combine SKIMS’ solutions-oriented design with The North Face’s heritage and expertise in outerwear. I’ve spent a lot of time on the slopes, and these pieces are inspired by my experiences,” she said. Jens Grede, SKIMS’ CEO, added that the brand continues to innovate by exploring new categories and finding creative solutions for its customers. Similarly, David Whetstone, The North Face’s director of collaborations, highlighted the mutual admiration between the brands and the shared commitment to best-in-class materials and craftsmanship.

The partnership represents a strategic expansion for both brands, with SKIMS branching into technical and functional winter wear and The North Face appealing to a broader, fashion-conscious audience. By merging practicality with chic design, this collaboration is poised to capitalize on the growing popularity of stylish winter fashion and après-ski culture. Fans can shop the collection online and at select retail locations starting December 10, making it a must-have for winter enthusiasts seeking a blend of performance and aesthetic appeal. This collaboration underscores SKIMS’ continued evolution as a solutions-oriented lifestyle brand while reinforcing The North Face’s position as a leader in technical innovation, creating an exciting opportunity for both brands to capture new market segments.

3. McDonald’s Corp ($MCD):

McDonald’s has officially announced the highly anticipated return of its beloved Snack Wrap, set to rejoin the menu in 2025 after an eight-year hiatus. Originally introduced in 2006, the Snack Wrap quickly became a favorite among customers for its convenient size and versatile flavor options, featuring crispy or grilled chicken, shredded lettuce, cheese, and a choice of sauces like Ranch, Honey Mustard, and Chipotle BBQ, all wrapped in a soft flour tortilla. Despite its popularity, McDonald’s discontinued the item in 2016, citing operational challenges, leaving fans clamoring for its return. Over the years, the Snack Wrap developed a near cult-like following, with petitions and social media campaigns urging McDonald’s to bring it back. The news was finally confirmed by McDonald’s USA President Joe Erlinger during an appearance on Good Morning America, where he acknowledged the item’s enduring popularity and teased its 2025 comeback, though he stopped short of revealing a specific launch date.

The return of the Snack Wrap is a strategic move for McDonald’s as it continues to evolve its menu and rebuild customer engagement. The announcement comes alongside plans to introduce a new “McValue” menu in early 2025, which will include expanded value offerings such as a $5 meal deal extended through the summer and a "Buy One, Add One for $1" promotion. Additionally, McDonald’s continues to scale its McCrispy brand globally, with the McCrispy Chicken Sandwich on track to reach over 70 markets by the end of 2024. These efforts are part of the fast-food giant’s broader strategy to modernize its offerings, appeal to nostalgia, and address growing consumer demand for value and innovation.

The reintroduction of the Snack Wrap is not just a nostalgic gesture but a calculated effort to leverage the brand’s legacy items to reignite customer loyalty. Social media has already erupted with excitement, with fans eagerly reminiscing about their favorite flavors and voicing hopes for the return of original recipes, such as the wraps made with full chicken tenders rather than shredded or processed chicken. Some are even calling for the inclusion of new international variations, like sweet chili chicken or spicy veggie wraps, which have become popular in other global markets. McDonald’s, however, has remained tight-lipped about specific details, leaving fans speculating on what the revived Snack Wrap lineup will look like.

The timing of the announcement also underscores McDonald’s efforts to distance itself from recent challenges, such as the E. coli outbreak linked to a raw onion supplier, which has since been resolved. The chain has since redoubled its focus on safety, customer trust, and menu innovation. By bringing back an item as iconic as the Snack Wrap, McDonald’s is tapping into a proven winner that bridges nostalgia with practicality, catering to a wide range of customers from busy professionals to younger fans who grew up enjoying the wraps after school or sports.

As McDonald’s looks ahead to 2025, the return of the Snack Wrap positions the company to drive sales and foot traffic while strengthening its connection with its loyal customer base. With the added momentum of new value menu strategies and global expansion plans for other successful products, the fast-food giant is poised to maintain its market leadership and continue its mission to innovate while staying true to its brand heritage. Although the exact launch date of the Snack Wrap remains unknown, fans are already marking their calendars for 2025, ready to rediscover this fan-favorite item.

4. Bath & Body Works Inc ($BBWI):

Bath & Body Works’ highly anticipated annual Candle Day Sale is here, offering a prime opportunity for candle enthusiasts to stock up on their favorite three-wick candles at the lowest prices of the year. This year, the sale kicks off early for Loyalty Rewards members on Friday, December 6, at 6 a.m. EST, both in stores and online, while general shoppers can join in starting Saturday, December 7, with the sale running through Sunday, December 8. For three days, shoppers can snag these iconic candles, typically priced between $24.95 and $29.95, for just $9.95, making this the perfect time to replenish your personal candle stash or purchase holiday gifts.

The 13th edition of Candle Day features an expansive selection of over 180 candle varieties and a record-breaking 58 Candle Day exclusives, ensuring something for every fragrance preference. Seasonal favorites such as Vanilla Balsam, Cranberry Pear Bellini, and Merry Mimosa are returning alongside classics like Winter Candy Apple (celebrating its 25th anniversary) and Fresh Balsam. The event also debuts exciting new scents, including Fresh Cinnamon Rolls, Cranberry & Pomegranate, and even a Bridgerton-inspired collection featuring Penelope’s First Kiss and Diamond of the Season. Additionally, spring and summer favorites like Bergamot Waters, Tiki Beach, and Island Margarita will be available, ensuring options for every season.

Bath & Body Works is pulling out all the stops for this year's event, kicking off Candle Day celebrations with a special torch relay in New York City, featuring Olympians Tara Davis-Woodhall, Hunter Woodall, and Jordan Chiles, culminating in the lighting of a 12-foot Bath & Body Works candle in Hudson Yards. The sale is not only about savings but also about celebrating the brand's iconic candles, with exclusive designs for fan-favorite scents such as Black Cherry Merlot and Peach Bellini.

While the sale limits purchases to 24 candles per shopper, this is more than enough for those looking to stock up for the year ahead. With more than 60% in savings, this event is the perfect opportunity to grab nostalgic holiday scents, versatile year-round fragrances, or even new launches at unbeatable prices. As inventory is expected to sell out quickly, savvy shoppers are encouraged to take advantage of this limited-time sale before their favorites are gone. Whether you’re gifting loved ones or simply indulging in your candle obsession, Candle Day 2024 promises to fill your home with cozy, festive cheer all year round.

5. Kontoor Brands, Inc. ($KTB):

The National Finals Rodeo (NFR) is seeing a dramatic surge in popularity this year, particularly on platforms like TikTok, where videos showcasing rodeo events, Western fashion, and cowboy culture are going viral. Google search trends also reveal a significant uptick in interest around the event, suggesting that the NFR is not just a sporting spectacle but a cultural phenomenon resonating with a broader audience. This increased visibility has positioned the NFR as a focal point for the growing mainstream appeal of Western lifestyles, creating ripple effects across fashion, social media, and consumer markets.

One of the companies that stands to benefit significantly from this trend is Kontoor Brands, the parent company of Wrangler and Lee. Wrangler, in particular, has long been associated with the rodeo and Western culture, and its connection to the NFR provides a natural entry point into this cultural wave. The heightened interest in the NFR aligns with a broader resurgence of Western-inspired fashion, which is being embraced by younger, trend-focused consumers on social media. TikTok users are showcasing Wrangler denim as both functional rodeo wear and a stylish statement, blending traditional Western elements with modern aesthetics. This could drive a renewed interest in Wrangler’s products, positioning it as both an authentic heritage brand and a fashion-forward choice.

The surge in attention also presents an opportunity for Kontoor Brands to expand Wrangler’s reach beyond its traditional customer base. As the NFR’s visibility grows internationally, fueled by social media and global curiosity about American culture, Wrangler’s iconic Western wear could find new audiences in international markets. Additionally, the brand can capitalize on this momentum by doubling down on influencer partnerships, creating TikTok-friendly content, and aligning its marketing with the NFR’s increasing cultural significance.

This year’s spike in NFR-related interest could signal a turning point for Kontoor Brands, where the alignment of a cultural moment with its product portfolio could drive both brand relevance and financial performance. The challenge will be maintaining this momentum beyond the event itself, ensuring that Wrangler remains a staple in consumers’ wardrobes year-round. If Kontoor Brands can effectively harness the NFR’s growing popularity and its resonance with younger, social media-savvy audiences, it could mark a significant boost in Wrangler’s market positioning and Kontoor Brands’ overall growth trajectory.

6. Amazon.com Inc ($AMZN):

Amazon has launched Amazon Nova, a groundbreaking suite of foundation models available exclusively through Amazon Bedrock, offering state-of-the-art AI capabilities with unmatched cost and performance advantages. Designed to address a broad spectrum of enterprise needs, Nova includes text-only and multimodal models—Nova Micro, Lite, Pro, and the upcoming Nova Premier—tailored for tasks like document and video analysis, interactive chat, and complex reasoning. These models deliver high accuracy and responsiveness while being up to 75% more cost-effective than competing solutions.

Nova’s lineup also includes creative tools like Nova Canvas for generating studio-quality images and Nova Reel for creating professional-grade video content. These tools empower businesses to enhance marketing, advertising, and content creation, enabling faster production cycles and superior creative control. Integration with Amazon Bedrock ensures seamless deployment, offering features like fine-tuning, Retrieval-Augmented Generation (RAG), and agentic applications, making the models highly adaptable to proprietary enterprise data and workflows.

Amazon’s investment in AI doesn’t stop here. In 2025, it plans to release advanced speech-to-speech and multimodal-to-multimodal models, expanding Nova’s potential to handle natural language, images, audio, and video as both inputs and outputs. These innovations aim to simplify complex applications like multimodal translation and interactive AI agents.

From marketing and retail to enterprise automation, Nova has already been adopted by leading companies such as SAP, Palantir, and Shutterstock to power transformative solutions. Amazon’s commitment to responsible AI is reflected in built-in safety features, watermarking, and content moderation, ensuring ethical use. The launch of Nova represents a significant milestone in Amazon’s efforts to make advanced AI accessible, affordable, and scalable for businesses worldwide.

7. Eli Lilly and Company ($LLY) & Novo Nordisk A/S ADR ($NVO):

Eli Lilly’s Zepbound (tirzepatide) demonstrated superior weight loss compared to Novo Nordisk’s Wegovy (semaglutide) in the SURMOUNT-5 clinical trial, a critical head-to-head comparison in the competitive obesity treatment market. The trial results showed that participants taking Zepbound lost an average of 20.2% of their body weight over 72 weeks, compared to 13.7% for those on Wegovy. This translates to a 47% greater relative weight loss—50.3 pounds on Zepbound versus 33.1 pounds on Wegovy.

Notably, 31.6% of Zepbound users achieved at least 25% weight loss, compared to 16.1% of Wegovy users.

Zepbound, a dual GIP and GLP-1 receptor agonist, leverages a two-hormone mechanism to suppress appetite and improve metabolic regulation, while Wegovy targets only the GLP-1 receptor. This dual action is thought to account for Zepbound’s enhanced efficacy and fewer nausea-related side effects. Both treatments primarily caused mild to moderate gastrointestinal side effects, such as nausea and diarrhea.

Lilly’s findings bolster Zepbound’s competitive positioning as demand for weight loss drugs continues to surge. “Zepbound is in a class of its own as the only FDA-approved dual GIP and GLP-1 receptor agonist obesity medication, changing how millions manage this chronic disease,” said Dr. Leonard Glass, Lilly’s Senior VP of Global Medical Affairs.

Novo Nordisk highlighted Wegovy’s established cardiovascular benefits, including its FDA approval for reducing the risk of heart attacks and strokes in people with obesity. Meanwhile, Lilly is advancing tirzepatide research for additional indications, including sleep apnea, heart failure, and diabetes prevention.

While the trial’s results are expected to influence prescribing decisions, factors such as cost, insurance coverage, and ongoing supply constraints remain pivotal in patient access. The SURMOUNT-5 findings underscore the potential for dual-action treatments like Zepbound to set a new standard in obesity care, as the market for these drugs is projected to exceed $100 billion annually.

These results will be published in a peer-reviewed journal and presented at a medical conference in 2025, adding to the growing body of evidence supporting Zepbound’s transformative impact on obesity management.

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