1 DeborahWeinswig,CEOandFounder,CoresightResearchdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.

March 2, 2018

ChartoftheWeek StatoftheWeek

March2,2018

1) Thisweek’snote“FromtheDeskofDeborahWeinswig”discusseswherewecurrentlystandontheartificialintelligenceadoptioncurve.

2) Investmentsingrocery-anchoredshoppingcentersintheUSin2017climbed5.3%from2016,makingthesectoroneoftheonlyretailsectorstoseedealgrowthinayearoflowtransactionvolume.

3) BritishconglomerateAssociatedBritishFoods(ABF)reportedapreclosetradingupdateforthe24weeksendedMarch3,2018.ABFsaidthatitexpectsPrimark’ssalestohaverisenby7%atconstantcurrencyandby9%asreportedduringthefirsthalf,drivenbyincreasedsellingspace.

4) RumorsthatAlibabawasplanningtoacquireEle.me,oneofthemajoronlinefooddeliveryplatformsinChina,havebeenconfirmedbyaninsiderclosetothedeal.Thecurrentvaluationoftheplatformisabout$9.5billion.

• TheConferenceBoard’sConsumerConfidenceIndexstoodat130.8inFebruary,upfrom124.3inJanuary.BoththepresentsituationandexpectationsgaugesalsoroseinFebruary.

• Consumerconfidencereacheditshighestlevelsince2000,drivenbyagoodlabormarketandoptimismregardingtheoutlookforbusiness,accordingtoTheConferenceBoard.

Source:TheConferenceBoard

130.8

Source:Kantar

Deborah Weinswig CEO and Founder

Coresight Research deborahweinswig@fung1937.com

US: 917.655.6790 HK: 852.6119.1779

CN: 86.186.1420.3016

US:LeadingRetailers’2017Sales(USDBil.)

373.44115.40

93.3389.7289.2582.7779.5671.3171.31

58.9344.6939.0034.7034.3427.58

0 50 100 150 200 250 300 350 400

WalmartKroger

Amazon.comCostco

HomeDepotWalgreensBootsAlliance

CVSTargetLowe’s

AlbertsonsAholdDelhaize

ApplePublix

BestBuyRiteAid

2 DeborahWeinswig,CEOandFounder,CoresightResearchdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.

March 2, 2018

FromtheDeskofDeborahWeinswig

TheStateofArtificialIntelligence:WhereAreWeNow?Theterm“artificialintelligence”(or“AI”)isenvogueandisoftenincorrectlyusedtorefertothingsthatdonottechnicallyqualifyasAI.Processorscanaddapparent“intelligence”tomachinesbyenablingthemtoturnthermostatsonandoffatcertaintimesandmakewell-intendedrecommendationsonwhichpantsgowithwhichshirt,butthesearejustprogramsthatrunthroughamountsofdataandderiveassociations.AndwhilepredictiveanalyticscanappeartoactlikeAI,itisreallyjustapplyingtheseassociationstofuturefunctions.Here,wefocusmorenarrowlyonAIinthecontextofusingcomputerstomimic(orexceed)humanintelligence.

Therearethreemaincalibers,orlevels,ofAI.Thefirstcaliberiscalledartificialnarrowintelligence(ANI),whichreferstousingcomputerpowertoexcelinoneveryspecificarea,suchasplayingchess,optimizinghybridvehicleefficiencyormakingproductrecommendations.Practicallyeverytypeofintelligentsystemweusetodayfitsintothiscategory.

Artificialgeneralintelligence(AGI)isthesecondcaliber,anditreferstocomputersthatareroughlyasintelligentashumansandthatcanperformpracticallyanyintellectualtaskwecan.Computersatthislevelneedtobeabletoreason,planintothefuture,understandcomplexconceptsandlearn,includingfromexperience.RayKurzweil,anAmericanauthor,computerscientist,inventorandfuturist,hasestimatedthatcomputerswouldhavetoprocess10quadrillion(or1016)calculationspersecondtoequalthepowerofthehumanbrain.China’sTianhe-2supercomputeriscurrentlytheworld’sfastest,capableofoperatingat33.8petaflops(quadrillionfloating-pointoperationspersecond),anditappearstohavesufficientspeedforAGI.

Thethirdcaliber,artificialsuperintelligence(ASI),referstosupercomputerswhoseintelligenceexceedsthatofhumansinjustabouteveryarea,includingcreativity,wisdomandsocialintelligence.Thiscategoryisthefocusofscience-fictionwriterswhoimaginehorrificscenariosinwhichthemachinescometorealizethathumansaretheproblemanddecidetoeradicateallofhumanity.

Today,itappearsthatwearestuckattheANIlevelandthatthesecondandthirdlevelsofAIarestillincrediblyfaroff.Whatisdifferentforthoseofuscurrentlyaliveisthatwehavealwayslivedintimesofcontinuingtechnologyimprovements,therateofwhichcontinuestoaccelerate.Thinkoftheslowrateoftechnologyimprovementduringthefirsthalfofthe20thcenturycomparedwiththesecondhalf,whichsawmilestonessuchastheinventionandimprovementofthetransistorinthelate1940sandearly1950s,thelaunchoftheIBMPCin1981andthelaunchofthesmartphoneabout10yearsago.OnedriveroftechnologicalchangeisMoore’slaw,namedforIntelcofounderGordonMoore’sobservationthatthenumberoftransistorsthatcouldbeincorporatedinasiliconwafer(whichdrivescomputingpower)appearedtodoubleevery18months(theratewassubsequentlymodifiedtoevery24months).Computingpowerisfollowingthiscurveandwillsoonpushcomputationspeedstohigherandhighernumbersofpetaflops.

Thefigurebelowshowsavailablecomputingpower,byyear(whichfollowsMoore’slaw).Wearelivinginthetimedepictedontherightside,wheregrowthisincreasingexponentially.

EstimatedComputingPower,byYear(ComputationsperSecond)

Source:MotherJones/CoresightResearch

Wearelikelytocontinuetoseeanacceleratingrateoftechnologicalchange,fueledbyever-increasingcomputingpowerthatis(hopefully)propellingustowardafutureinwhichintelligentmachinescanhelpussolveproblems,curediseasesandgenerallybenefitsociety.

0

1E+17

2E+17

3E+17

4E+17

40 46 52 58 64 70 76 82 88 94 00 06 12 18 24

Slowrateofchange

Rapidrateofchange

3 DeborahWeinswig,CEOandFounder,CoresightResearchdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.

March 2, 2018

USRETAILEARNINGS

Company

Revenues(USDMil.)YoY%Change GrossMargin(%)

Change(bps)

NetIncome(USDMil.)

YoY%Change StoreFleetEOP

Period TY LY

TY LY

TY LY

TY LY

Carter’s 4Q17 1,027 934 10.0 44.8 43.9 85 110 88 24.3 1,050 956

Dillard’s 4Q18 2,109 1,984 6.3 32.1 31.7 40 84 61 38.1 292 293

HomeDepot 4Q17 23,883 22,207 7.5 33.9 34.0 (15) 1,906 1,744 9.3 2,284 2,278

Macy’s 4Q17 8,666 8,515 1.8 38.2 38.3 (15) 719 635 13.2 851 829

SteveMadden 4Q17 364 336 8.3 38.4 38.7 (35) 28 29 (4.3) 206 189

Walmart 4Q18 136,267 130,936 4.1 24.7 25.4 (70) 3,962 4,003 (1.0) 11,718 11,695

Wayfair 4Q17 1,439 985 46.2 23.1 24.2 (115) (73) (44) NM N/A N/A

Source:Companyreports/CoresightResearch

USRETAIL&TECHHEADLINES

AmazonWasn’tAloneinInvestinginGroceryStoresLastYear(February27)CNBC.com

• Grocerystoreopeningsdeclinedby29%lastyearasexpansionplanscooledandsomesupermarketspreparedtofileforbankruptcyintheyearAmazonacquiredWholeFoods,accordingtoanewreportfromJonesLangLaSalle(JLL).

• Butinvestmentsingrocery-anchoredshoppingcentersin2017climbed5.3%from2016,makingthesectoroneoftheonlyretailsectorstoseedealgrowthinayearoflowtransactionvolume.“Groceryisconsideredtohaveamoataroundittodefendagainste-commerce,andbecauseofthat,these[assets]areseenbyretailpropertyinvestorsasasafeinvestment,”JamesCook,JLL’sdirectorofretailresearchintheAmericas,toldCNBC.

ManhattanLandlordsCutDealstoStaveOffVacantStorefronts(February27)Bloomberg.com

• Afteradroughtin2017,moredealsaregettingdoneaslandlordsbegintoacceptthenewreality.RetaillandlordsthroughouttheUSarefacingacontractinguniverseoftenantsasmerchantscutbackonbrick-and-mortarlocationsandshoppingshiftsonline.

• InManhattan,hometosomeofthemostvaluableretailrealestateintheworld,asharpriseinrentsfollowingtherecessionexacerbatedtheproblem,withpropertyownersclingingtounrealisticincomeexpectations.Today,theglutofemptyspaceistakingatoll,pushinglandlordstomakeconcessionstoplugholes.

StarbucksOpensItsFirstReserveStoreandSaidItSeesRetailRentsEasing(February27)CNBC.com

• OnTuesday,Starbucksopenedthefirstof1,000planned,upscaleStarbucksReservestoresaspartofabroadstrategytodefendagainsthigh-endcoffeerivalssuchasIntelligentsiaCoffee&TeaandBlueBottleCoffee.

• ThenewReservestoreislocatedinStarbucks’Seattleheadquartersbuildingandwillexpandonthecompany’sshowcaseSeattleReserveRoasterydrinkmenuwithnewitemssuchasnitrodraftlattes.ItalsowillservefoodfromPrinciItalianbakeryandalcoholicdrinksfroma“mixology”bar.

WEINSWIG’SWATCHING

Thisweek,theCoresightResearchteamattendedtwoevents,aTrendSeederInnovationSeriespanelcalled“NewRetailFormats,”hostedbyTrendSeeder,24SevenandDavis&Gilbert,and“TheMakingofaBeautyEntrepreneur,”hostedbyTheFashionGroupInternational.

4 DeborahWeinswig,CEOandFounder,CoresightResearchdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.

March 2, 2018

Hawaii’s2nd-LargestRetailCompanyBuys3ShoppingCenters(February27)USNews.com

• Hawaii’ssecond-largestretailpropertyowner,Alexander&Baldwin,announcedthatitboughtthreeshoppingcentersondifferentislandsfor$254million.ThethreecentersareLaulaniVillageonOahu,Pu’uneneShoppingCenteronMauiandHokuleiVillageonKauai.

• Alexander&BaldwinboughtthepropertiesaspartofastrategytoaccumulateretailpropertythroughoutHawaiiwhilesellingitsmainlandrealestateholdings,theHonoluluStar-AdvertiserreportedMonday.

TargetCEOSaysMajorityofUSRetailSalesWillContinuetoBeinStores(February22)BizJournals.com

• InaninterviewonCNBC,TargetCEOBrianCornellsaidthatthemajorityofUSretailsaleswillcontinuetotakeplaceatstores.Whilehesaidthate-commercesalesaregrowing,storeswillholdanintegralrolefortheforeseeablefuture.

• Cornellsaidthewinningretailersofthefuturewillbetheonesthatareable“tocombinegreatphysicalassets”withdigitalinteraction.Targetiscomingoffasuccessfulholidayseason,withsame-storesalesupmorethan3%duringNovemberandDecember.

EUROPERETAILEARNINGS

Company

Revenues(USDMil.)

ChangeinUSD(%)

ChangeinReportingCurrency

(%) GrossMargin(%)Change(bps)

NetIncome(USDMil.)

YoY%Change StoreFleetEOY

Period TY LY

TY LY

TY LY

TY LY

DIA FYEDec31 9,742 9,593 1.6 (0.6) 22.4 23.2 (80) 123.9 192.5 (35.7) 7,388 7,420

AholdDelhaize FYEDec31 71,069 54,990 29.2 26.6 26.7 26.9 (26) 2,053.3 918.4 123.6 6,637 6,556

Source:Companyreports/CoresightResearch

EUROPERETAIL&TECHHEADLINESPrimark’sFirst-HalfSalesGrowthDentedbyWarmOctober(February26)Companypressrelease

• BritishconglomerateAssociatedBritishFoods(ABF)reportedapreclosetradingupdateforthe24weeksendedMarch3,2018.ABFsaidthatitexpectsPrimark’ssalestohaverisenby7%atconstantcurrencyandby9%asreportedduringthefirsthalf,drivenbyincreasedsellingspace.

• ABFexpectstoreportthatPrimark’scomparablesalesfellby1%duringtheperiod,asgrowthwashinderedbyanunusuallywarmOctober—amonthwhencompssawa“significantdecline.”However,ABFexpectsPrimark’sUKcompstobeup4%forthefirsthalf.ThecompanyexpectsPrimark’soperatingmargintobesimilartothatreportedfortheyear-agoperiodanditplanstoopen1.2millionsquarefeetofsellingspaceoverfiscalyear2018.

SirPhilipGreenSoughtArcadiaBuyer,SaysLeakedEmail(February25)TheTimes.co.uk

• SirPhilipGreenaskedHSBCtohelphimfindabuyerforArcadiaGroup,accordingtoaleakedemailobtainedbyTheSundayTimes.ThisnewscomesbarelyaweekafterGreenissuedadenialofareportthathewasplanningtosellallorpartofthegrouptoChinesebuyers.

• TheemailindicatesthatGreenmetwithIanStuart,HSBCUK’schiefexecutive,andDavidBarraclough,amanagingdirectoratthebank,inFebruary2016.BarracloughsaidthatGreenwasconcernedbythegrowingpensiondeficitatArcadiaandfeltthatheneededtosellsomepartofthegrouptoplugthegap.HesoughtStuart’sandBarraclough’s“assistanceandofferedtomeetanyChineseprospectivepartner[they]consider[ed]appropriate.”

5 DeborahWeinswig,CEOandFounder,CoresightResearchdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.

March 2, 2018

PaversRescuesJonesBootmaker(February26)RetailGazette.co.uk

• BritishfootwearretailerJonesBootmakerhasbeensoldtocompetitorPaversthroughapre-packadministrationdeal.ThismovecomeslessthanayearafterprivateequityfirmEndlessacquiredJonesBootmakerandputitupforsalefollowingtoughtrading.

• Pavershasnowgainedcontrolof42ofJonesBootmaker’s47storesaswellasitswebsiteandbranding.Thefivestoresthatdidnotformpartofthepre-packdealwillbeshut,resultingin86redundancies.Thedealincludes389employeesretainingtheirjobs.

MonclerForecastsFurtherGrowthAfterSalesRiseby15%in2017(February26)CompanypressreleaseandReuters.com

• ItalianlifestylebrandMonclerpostedsalesgrowthof15%atconstantcurrency,to€1,194million($1,468million),intheyearendedDecember31,2017.Comparablesaleswereup14%,whileEBITgrewby15%andnetincomejumped27%.

• Thegroupforecastfurthergrowthin2018andplanstoexpandselectedproductcategoriesanddoawaywithcatwalkshows.Monclerintendstolaunchproductsmonthlyinordertocatertoshiftingtrendsamongyoungshoppers.

SpartoTrialContactlessandCashRegister–FreePayments(February22)RetailDetail.eu

• InBelgium,supermarketgroupSparissettotrialAmazonGo–likecontactlessandcashregister–freepaymentsincollaborationwithRetailPartnersColruytGroup(RPCG).

• Spar’sBelgianstoresarepartofRPCG,whichhasdevelopedasmartphoneappthatcustomerscanusetoscanandpayforgroceries.ThetrialwillbeconductedinselectedSparstoresinspringthisyear.

ASIARETAIL&TECHHEADLINESAlibabatoBuyMajorFoodDeliveryAppEle.me(February27)ATimes.com• RumorsthatAlibabawasplanningtoacquireEle.me,oneofthemajoronlinefooddelivery

platformsinChina,havebeenconfirmedbyaninsiderclosetothedeal,Yicai.comreported.Alibabawillbuythecompanyasawhole,andthefinalpurchasepriceisstillunderdiscussion.

• Thecurrentvaluationoftheplatformisabout$9.5billion.ThereportsaiditishighlypossiblethatthefirmwillbeplacedundertheleadershipofDanielZhang,Alibaba’sCEO,andserveastheinfrastructureofAlibaba’s“newretail”strategy.

Toys“R”UsPlanningtoCloseMoreStores(February27)HRMAsia.com• AmidstiffcompetitionfromonlineretailersandbiggertoystoressuchasHamleys,UStoy

retailchainToys“R”Usisreportedlysettoscalebackonitsglobaloperations.TheWallStreetJournalhasreportedthatthecompany,whichoperatesmorethan500storesinAsiaalone,isplanningtoclosedowndozensofstores,thoughtheirlocationswereunspecified.

• Thisfollowsanofficialupdateatthestartofthisyear,whenthecompanyannounceditwouldshutdown182storesbyApril,potentiallyaffectingsome4,500workers.Thetoygiantfiledforbankruptcylastyear,rightbeforetheholidayseason.Tomakemattersworse,theretailerregisteredless-than-stellarsalesduringthe2017holidayperiod.

OnlineBuyingPoisedforHKExpansion(February26)TheStandard.com.hk• AlthoughHongKonghasadensephysicalretailenvironment,itsrevenueinthee-commerce

marketisforecasttogrowatanannualrateof9.8%until2022,saysPascalMartin,apartneratOC&CStrategyConsultants.Currently,theaveragerevenueperuserinthecityisUS$928,slightlylowerthantheUS$1,114inSingapore,theUS$1,250inJapanandtheHK$1,495inSouthKorea.

• E-commercepenetrationisexpectedtoreachalmost50%oftheworld’spopulationthisyear,datafrommarketingcompanyStatistashow.OneoftheareaswiththemostgrowthpotentialgloballyistheAsia-Pacificregion,Martinsays.

6 DeborahWeinswig,CEOandFounder,CoresightResearchdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.

March 2, 2018

TencentandJD.comExpand“RetailKingdom”(February26)ATimes.com• InternetgiantTencentandleadinge-commercesiteJD.commovedtosecureatotal11%

stakeofBBKCommercialChain,alarge,domesticchainenterprise,aimingtofurtherexpandtheirstrategyof“newretail”touprootmorebrickstores,ThePaperreported.

• InsidersthinkChina’sretailindustryhasgraduallyformedapatternof“Tencent&JD”against“Alibaba&Suning.”Bothsidesareconstantlybuildinguptheirretailkingdomsviabuyingupofflineretailers.

RetailAIStartupCapillaryTechnologiesRaises$20Million(February21)TheHindu.com• CapillaryTechnologiesannouncedthatithasraisedapproximately$20millionoverthepast

yearfromitsexistinginvestors,includingWarburgPincusandSequoiaCapital.Thecloud-basedsoftwaresolutionsstartupusesartificialintelligence(AI)toenabletopretailerssuchasWalmart,StarbucksandDubai-basedAl-Futtaimtoengagewiththeircustomers.

• Withthesefunds,Capillaryexpectstostrengthenitsnewproductdevelopment,poweredbyAIandmachinelearning,tocatertoAsiaandotherupcomingemergingmarkets.Thecompanysaiditalsoplanstoinvestinitsnewlylaunchedconsumergoodsvertical.

LATAMRETAIL&TECHHEADLINESHowThisHotIPOIsOutfoxingBrazil’sPaymentIndustryPlayers(February27)Investors.com

• Brazil’seconomyisbouncingback,whichisgoodnewsformicromerchantssuchastaxidrivers,physicaltherapistsandfoodtruckoperators.It’salsogoodnewsforPagSeguro,apaymentprocessorthatcaterstothoseindividualentrepreneursandsmallbusinesses.

• PagSeguro,whichprovidesonlineandmobileservices,sellslow-costpaymentdevicesthatenablemicromerchantstoacceptcreditordebitcardsratherthancash.SomeanalystscomparePagSegurotoUS-basedSquare,whichalsofocusesonsmallmerchants.

ThisDeliveryAppPutsaCourieronEveryCorner(February27)Bloomberg.com

• Rappi,atwo-year-olddeliverystartup,isamashupofUberEats,InstacartandTaskRabbit.Summonedviasmartphone,Rappi’scouriersdeliverpokebowls,groceriesandevencash,andrunerrandsthatincludepayingbills.Regularcustomersaveragemorethanfourordersaweek.

• Rappi,whichchargescustomersabout$1anorderoraflat$7amonth,hasbecomesuchahitinBogotáandMexicoCitythatthecompanyhasraised$185million—anearrecordinLatinAmerica—tosetupshopineachoftheregion’smajorcities.

MexicoRetailSalesFallforSecondMonthinDecember(February26)Reuters.com

• MexicanretailsalesfellforthesecondmonthinarowinDecember,dropping0.5%fromNovember,thenationalstatisticsagencysaidonMonday.Salesslid2.0%inDecemberfromthesamemonthayearearlier,thefifthsuchdeclineinfivemonths.ThefigurerepresentsthebiggestannualizeddropinsalesforanymonthsinceMarch2013.

• EarlierinFebruary,Mexico’sretailassociation,ANTAD,saidthatsalesatstoresopenforatleastayearroseby3.9%inJanuaryfromthesamemonthayearearlier.

MercadoLibreIsOpeningFulfillmentCentersinMexicotoFuelGrowth(February26)Tamebay.com

• MercadoLibre,amajorLatinAmericanmarketplaceande-commercefirm,hassaidthatitwillopentwolargedistributioncentersinMexicoaspartofanefforttoimproveitslogisticsinthecountryandfuelitsdevelopmentandgrowth.

• Thedistributioncenterswillencompassatotalof1.4millionsquarefeetandbelocatedinthestateofMexico,closetoMexicoCity.MercadoLibreishopingtoimproveefficiencybecausetheareaisvast,withmanygeographicalproblemsintermsoffulfillment.

7 DeborahWeinswig,CEOandFounder,CoresightResearchdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.

March 2, 2018

MWC2018:TelefónicaRollsOutAuraVoiceAssistantinChile(February26)SantiagoTimes.cl

• AllyingwithtechgiantsFacebook,GoogleandMicrosoft,TelefónicahaslaunchedAura,anartificialintelligence–powereddigitalassistant,insixcountries.Thecompanyhasalsoannouncedanewinitiativetobring100millionpeopleinLatinAmericaonlinebyusingmobilenetworkingtechnologyforthefirsttime.

• Firstannouncedatlastyear’sMobileWorldCongress,AuraworksmuchlikeAmazon’sAlexa,Apple’sSiriandMicrosoft’sCortana,allowingcustomerstorequestinformationandcontroldevicesthroughvoicecommands.

MACROUPDATE

KeypointsfromglobalmacroindicatorsreleasedFebruary21–28,2018:

1) US:TheMarkitUSManufacturing,ServicesandCompositePurchasingManagers’Indexes(PMIs)remainedabovetheexpansionthresholdof50.0inFebruary.Existinghomesalesdecreasedby3.2%monthovermonthinJanuary.

2) Europe:Intheeurozone,theMarkitEurozoneManufacturing,ServicesandCompositePMIsstayedabovetheexpansionthresholdinFebruary.IntheUK,thenumberofpeopleclaimingtobeunemployedandtherateofpeopleclaimingbenefitsbothfellinJanuaryfromDecember.TheUKunemploymentratetickedupslightlyinDecember,to4.4%.

3) Asia-Pacific:InJapan,supermarketsaleswereup0.6%yearoveryearinJanuary,whilenationwidedepartmentstoresalesweredown1.2%andTokyodepartmentstoresalesweredown0.2%.TheConsumerPriceIndex(CPI)inJapanroseby1.4%yearoveryearinJanuary,increasingbymorethanitdidinthepriormonth.TheCPIexcludingfoodpricesincreasedby0.9%yearoveryearinJanuary,whiletheCPIexcludingfoodandenergypricesincreasedby0.4%yearoveryear.

4) LatinAmerica:InBrazil,consumerconfidenceweakenedto87.4inFebruary.Constructioncostsinthecountryincreasedby0.1%,slightlylessthanthepriormonth’sincrease.InflationinBrazil,asmeasuredbytheIBGEIPCA-15,edgedupby0.4%monthovermonthandroseby2.9%yearoveryearinFebruary.

Country/Region

Indicator Period Actual Survey Prior ImpactonEconomy*

US MarkitUSManufacturingPMI(Prelim.) Feb 55.9 55.5 55.5 +

US MarkitUSServicesPMI(Prelim.) Feb 55.9 53.7 53.3 +

US MarkitUSCompositePMI(Prelim.) Feb 55.9 – 53.8 +

US ExistingHomeSales(Mil.) Jan 5.4 5.6 5.6 –

US ExistingHomeSales(MoM) Jan (3.2)% 0.5% (2.8)% –

EZMarkitEurozoneManufacturingPMI(Prelim.) Feb 58.5 59.2 59.6 +

EZ MarkitEurozoneServicesPMI(Prelim.) Feb 56.7 57.6 58.0 +

EZ MarkitEurozoneCompositePMI(Prelim.) Feb 57.5 58.4 58.8 +

UK JoblessClaimsChange(Thous.) Jan (7.2) – 6.2 +

UK ClaimantCountRate Jan 2.3% – 2.4% +

UK AverageWeeklyEarnings(3Mos.,YoY) Dec 2.5% 2.5% 2.5% =

UK WeeklyEarningsexBonus(3Mos.,YoY) Dec 2.5% 2.4% 2.3% +

UK ILOUnemploymentRate(3Mos.) Dec 4.4% 4.3% 4.3% –

JP SupermarketSales(YoY) Jan 0.6% – 0.9% –

JP NationwideDepartmentStoreSales(YoY) Jan (1.2)% – (0.6)% –

JP TokyoDepartmentStoreSales(YoY) Jan (0.2)% – 0.9% –

8 DeborahWeinswig,CEOandFounder,CoresightResearchdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.

March 2, 2018

*CoresightResearch’sevaluationoftheactualfigure’simpactontheeconomyrelativetohistoricalbenchmarksandthecurrentmacroeconomicenvironment:+indicatesapositivesignalforthecountry’seconomy,–indicatesanegativesignaland=indicatesanegligibleormixedimpact.Source:Markit/NationalAssociationofRealtors/UKOfficeforNationalStatistics/JapanChainStoresAssociation/JapanDepartmentStoreAssociation/MinistryofInternalAffairsandCommunicationsJapan/FundaçãoGetulioVargas/InstitutoBrasileirodeGeografiaeEstatística/CoresightResearch

JP CPI(YoY) Jan 1.4% 1.3% 1.0% +

JP CPIexFreshFood(YoY) Jan 0.9% 0.8% 0.9% +

JP CPIexFreshFoodandEnergy(YoY) Jan 0.4% 0.3% 0.3% +

BZ FGVConsumerConfidence Feb 87.4 – 88.8 –

BZ FGVConstructionCosts(MoM) Feb 0.1% 0.3% 0.3% +

BZ IBGEInflationIPCA-15(MoM) Feb 0.4% 0.4% 0.4% +

BZ IBGEInflationIPCA-15(YoY) Feb 2.9% 2.8% 3.0% +

9 DeborahWeinswig,CEOandFounder,CoresightResearchdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.

March 2, 2018

EARNINGSCALENDAR

Sales(Mil.) EPS

Company

EarningsReleasePeriod Date

ConsensusTY LYActual

ConsensusTY LYActual Currency

FootLocker(FL) 4Q17 Mar2 2,207 2,113 1.25 1.37 USD

JCPenney(JCP) 4Q17 Mar2 4,035 3,961 0.47 0.64 USD

Revlon(REV) 4Q17 Mar2 785 801 (1.25) 0.48 USD

BigLots(BIG) 4Q17 Mar2(E) 1,656 1,579 2.43 2.26 USD

AscenaRetailGroup(ASNA) 2Q18 Mar5 1,642 1,748 (0.09) (0.06) USD

Target(TGT) 4Q17 Mar6 20,691 20,623 1.37 1.45 USD

RossStores(ROST) 4Q17 Mar6 4,052 3,693 0.93 0.75 USD

UrbanOutfitters(URBN) 4Q18 Mar6 1,087 1,030 0.64 0.58 USD

DollarTree(DLTR) 4Q17 Mar7 6,397 5,635 1.93 1.39 USD

Abercrombie&Fitch(ANF) 4Q17 Mar7 1,567 1,036 1.10 0.74 USD

Costco(COST) 2Q18 Mar7 32,686 29,766 1.48 1.17 USD

TheChildren’sPlace(PLCE) 4Q17 Mar7(E) 1,872 1,893 2.45 1.59 USD

IconixBrandGroup(ICON) 4Q17 Mar7(E) 51.5 87.1 (0.01) 0.36 USD

SalvatoreFerragamo(SFER.MI) FY17 Mar8 1,398 1,438 0.78 0.93 EUR

AmericanEagleOutfitters(AEO) 4Q17 Mar8 1,209 1,097 0.44 0.39 USD

Kroger(KR) 4Q17 Mar8 30,726 27,611 0.63 0.54 USD

GroupeCasino(CO.PA) FY17 Mar8(E) 38,160 36,030 2.72 7.91 EUR

Sears(SHLD) 4Q17 Mar8(E) 3,861 6,052 1.16 (1.31) USD

Prada(1913.HK) FY17 Mar8(E) 3,023 3,552 0.10 0.18 EUR

Dick’sSportingGoods(DKS) 4Q17 Mar13 2,732 2,483 1.21 1.07 USD

DSW(DSW) 4Q17 Mar13 725 675 0.27 0.19 USD

10 DeborahWeinswig,CEOandFounder,CoresightResearchdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.

March 2, 2018

EVENTCALENDAR

Event Location Date(s)

CoresightResearch

Presenting/Attending

ICSCREConEurope London,UK Mar6

NACSConvenienceSummit–Asia HongKong Mar12–14

UJAi3:ASummitforWomen NewYork,NY Mar13

SPECSShow2018:TheForefrontofPhysicalRetail Dallas,TX Mar18–20

Shoptalk2018 LasVegas,NV Mar18–21 √

DigitalFashion&LuxuryMasterclass London,UK Mar20

IsraelDealmakersSummit2018 RedwoodCity,CA Mar20–21

WWDMen’sWearSummit NewYork,NY Mar27

RISE LosAngeles,CA Apr6–7

PIApparel HongKong Apr10–11

WorldRetailCongress Madrid,Spain Apr17–19 √

FEI Boston,MA Apr23–26

WWDRetail20/20Forum London,UK Apr24

RetailRobotics&AIConference SanFrancisco,CA Apr26

Collision NewOrleans,LA Apr30–May3

RetailDesignExpo London,UK May2–3

RetailBusinessTechnologyExpo London,UK May2–3

VRLA2018 LosAngeles,CA May4–5

InnovationEnterpriseChiefStrategyOfficerSummit SanFrancisco,CA May7–8

BrandInnovatorsFutureofConsumerExperience&Retail Dallas,TX May10

D3RetailSupplyChainSummit NewYork,NY May10–11

DigiMarConEast2018 NewYork,NY May10–11

2018WWDBeautyCEOSummit PalmBeach,FL May14–16

EventforIn-StoreExperienceInnovators London,UK May16–17

ICSCRECon:TheGlobalRetailRealEstateConvention LasVegas,NV May20–23 √

3rdAnnualVRWorld London,UK May22–23

RetailCouncilofCanada:Store2018 Toronto,ON,CA May29–30

PIApparel NewYork,NY Jun22–23

CosmoprofNorthAmerica LasVegas,NV Jul29–31 √

11 DeborahWeinswig,CEOandFounder,CoresightResearchdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.

March 2, 2018

DeborahWeinswig,CPACEOandFounderCoresightResearchNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.com

JohnMercerSeniorAnalyst

JohnHarmon,CFASeniorAnalyst

StevenWinnickResearchAssociate

CharliePoonResearchAssociate

HongKong:2ndFloor,HongKongSpinnersIndustrialBuildingPhase1&2800CheungShaWanRoad,KowloonHongKongLondon:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomNewYork:1359Broadway,18thFloorNewYork,NY10018

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