Welcome to another edition of TSOH Weekly Roundup.
Each update features a Chart of the Week, along with a brief discussion on three news items relevant to companies in the TSOH investable universe.
Chart Of The Week (from “Roblox: Accepting Uncertainty”)
Three Notable Items
“Walmart Reports Q2 2027 Quarterly Results”
Walmart reported relatively soft quarterly results, most notably their weakest U.S. same store sales growth in more than six years; that was despite >500 basis points of e-commerce comp contribution, with expedited deliveries (in <3 hours) accounting for nearly 40% of store-fulfilled orders. I’ll have more to say on this in the coming weeks when Dollar General and Dollar Tree report.
CEO John Furner: “Our price gaps to conventional U.S. grocers are strong, and they continue to widen. The share gains we see from this channel have persisted, alongside the drug and dollar formats... Fast delivery in the U.S. grew 48% in Q2. Speed matters, and we have a significant competitive advantage. Our physical footprint, fulfillment infrastructure, and local delivery capabilities allow us to move closer to customers while maintaining an attractive cost structure. We’ve now expanded under 30-minute delivery into 38 U.S. markets... Ecommerce sales now represent more than 23% of our sales mix in Walmart U.S., which is double the level from five years ago.”
“How a pesky Jordan copycat dribbled around Nike in China”
A story in the FT about Qiaodan, a relatively small Chinese sportswear company whose name translates to “Jordan” (as in Michael Jordan). In addition to the company’s interesting history, the story speaks more broadly to the competitive threat that Nike and its peers face from China’s domestic sports brands (something I’ve been talking about at TSOH for many years).
“Since its founding 26 years ago, Qiaodan has spent a significant chunk of that time embroiled in a legal dispute with Michael Jordan, who appears to have inspired its branding. However, in 2020, Qiaodan was ultimately found only to have infringed an element of Jordan’s prior name rights. The sportswear company — which has expanded into running trainers and yoga gear — is now a fully fledged nationwide retailer, with about 6,000 stores, most of them under franchise arrangements. In a store in the lower-tier city of Yueyang, its Air Jordan-style high-top trainers sell for Rmb339 (~$50).”
“AI Music Startup Suno Bets Anyone Can Be a Rock Star”
A Bloomberg profile about Suno, the company who’s mission is to build “The AI Music App”. My interest here is less about Suno specifically, and more about the growing importance of UGC and AI-generated content across various forms of entertainment (video, music, gaming, etc.). I suspect the changes that we’ve seen in recent years are just the tip of the iceberg.
“Paying users can train Suno on their voices, so their creations can sound like they’re singing them. More than 100 million people have used the product since 2023, and over 2 million people shell out as much as $30 a month for it. Co-founder Mikey Shulman says Suno will do for music what Instagram did for photography… This led to huge increases in downloads, making Suno the most popular music app in Apple’s store for a few weeks, surpassing Spotify.”
TSOH Updates
Here’s the updated TSOH research list for the past six months:
Monday’s research report will be an update on Portillo’s (PTLO).
Have a great weekend!
NOTE - This is not investment advice. Do your own due diligence.
I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.