REI Earnings Report

[SpiderLegs]

Not to take this too far off course, but traffic is down on Old Baldy this summer as well. Finished up my hike this morning around 10 AM and you could still find a handful of parking spots. 4-5 years ago at 10 AM you'd be circling around in hopes of finding an elusive spot. Saw an earnings report from REI and it wasn't pretty, their CEO said the two demographics that bought outdoor gear in the past have stopped shopping there the past two years. Baby Boomers are aging out and Millennials are buying houses & baby clothes, not outdoor gear according to REI.

[Grimey]

traffic is down on Old Baldy this summer as well. Finished up my hike this morning around 10 AM and you could still find a handful of parking spots. 4-5 years ago at 10 AM you'd be circling around in hopes of finding an elusive spot

We can see if Chumley agrees but that looks like what is called an "anecdote" to me. FWIW, I rode up to the rim this morning and it was packed and busy as I've ever seen it.

Their CEO said the two demographics that bought outdoor gear in the past have stopped shopping there

Was this private information or are you able to provide a public link that confirms this? REI's official statement regarding their last earning report says "That loss was largely driven by three factors: REI's commitment to continue investing in hourly employee pay, commitment to providing a member reward, and a $169 million non-cash valuation allowance against its deferred tax assets." Would be interesting if the CEO is saying something different, possibly even criminal.

[SpiderLegs]

@Grimey - It was a comment I saw online a month or two ago. Don't have the time nor desire to cough up a link. Just thought it was interesting.

[chumley]

Not to take this too far off course

Oh, sign me up! Hijacking a HAZ forum thread on some unrelated tangent is my specialty!

We can see if Chumley agrees

I haven't looked into the numbers, nor do I particularly care to right now, but I think that if we are comparing anything to the anomalies of covid/2020, it will be difficult to make any logical analyses or draw accurate conclusions. Undeveloped USFS visitation flourished during a time when people were restricted from doing things indoors, while developed sites saw less visitation. Businesses such as Home Depot and Lowes are seeing lower revenues now after setting records during Covid when people were stuck at home and had time to do home improvement projects there (odd if millennials are busy buying houses now, you'd think they'd be doing improvements too?)
https://www.fs.usda.gov/sites/default/f ... Report.pdf

Friends of Madera keeps accurate vehicle counts, but I can't find numbers beyond 2020. You could probably send an email and get the exact answer.
https://friendsofmaderacanyon.org/wp-co ... 20_v2a.pdf

National park visitation crashed in 2020 due to covid travel restrictions and closures. 2021-2023 have seen steady increases that have returned to pre-pandemic totals, with a number of parks reporting all-time record visitation numbers last year. Perhaps there are fewer boomers and millennials amongst them?
https://www.nps.gov/subjects/socialscie ... hboard.htm
(I wonder if the 14er graphs looks similar to the ones NPS publishes here?)

There are, of course, big differences between national parks; local recreation areas such as Madera and Sabino Canyons; and 14ers in Colorado.
What a fun topic for discussion!

[Jim]

What a fun topic for discussion!

If we could somehow work in wilderness area management, wheels, and how Brawndo has what plants crave, I could be interested.

[DixieFlyer]

As for REI, the phrase "go woke, go broke" goes a long way toward explaining their problems

[ShatteredArm]

As for REI, the phrase "go woke, go broke" goes a long way toward explaining their problems

What kind of "woke" behavior do you imagine REI to be engaging in?

REI's problems seem a lot simpler if you're actually an outdoor enthusiast and have been shopping there for awhile. Here are some observations I've made that probably do a much better job explaining their problems, without any ridiculously divisive political nonsense:

First, the vast majority of people I see shopping at REI don't look like outdoor enthusiasts, and they seem to primarily be shopping for clothes and walking shoes. I usually have the areas with actual outdoor gear, e.g. backpacks, tents, backpacking food, etc. all to myself.

Second, on many occasions I've found that REI has stopped carrying my go-to products, whether it's shoes, hydration bladders, nutrition, etc. I haven't bought trail runners there in probably 5-6 years, since I simply can't get the ones I want.

Third, every time I've gone in the past year or two, everything seems to be completely rearranged. This seems like a desperate way to get people to see products they weren't really looking for.

In short, it seems REI basically realigned their business to cater to more casual customers, which may have seemed quite lucrative in 2020, while forcing the more dedicated outdoorspeople to go elsewhere (probably usually online) to get equipment. My REI spending has dropped off a cliff, I basically only go there when I need a new pair of running socks or nutrition for a backpacking trip.

It's pretty obvious that they've made some poor strategic decisions, but if your fantasy about customers punishing "woke" companies makes you feel better about your worldview, more power to you.

[Jim]

https://nypost.com/2024/05/03/lifestyle ... -pro-shop/

Opinions vary on the subject, but if competitors are doing well, it may be something to do with REI. I don't follow the company politics, but the prices could be one reason.

[ youtube video ]

https://perfectunion.us/why-reis-progre ... is-a-sham/

Woke is a great tool of Wall Street to divide and conqueror the help, but seems the public does find it somewhat tiresome. I doubt REI is getting the Bud Lite treatment, but they have something going on if a few people, including the YT are calling them that.

[chumley]

My personal shopping habits reflect those in the New York post article. I shop much more now at Bass Pro than at REI. Even retailers such as Dick’s and Scheels. When I am looking for a $300 Cotopaxi jacket to go out on the town with, I will go to REI. If I am looking for hiking pants, I will go somewhere else.

[toddak]

Don't know about REIs politics but earlier this year I bought a mid-range cabon frame mountain bike there, 2 weeks later I got on their site to write a review and noticed that the price had dropped $1200. With their very generous 1-year / no questions asked returns policy they let me do a "virtual" return (refunded me the original price and then re-sold me the same bike but at the lower price). Very nice for me but maybe not great for the bottom line.

[Alston_Neal]

but if your fantasy about customers punishing "woke" companies makes you feel better about your worldview

Yeah the demographics of REI to me is like Trader Joes. Now if Sportsmans Warehouse tries to sell Yeti coolers with Budlite, John Deere and Harley decals all over it, we could see real woke pushback.

[herdbull]

As for REI, the phrase "go woke, go broke" goes a long way toward explaining their problems

Yes, I agree. The main reason I don't shop there anymore. Pretty simple for me. I just started searching out other sources for gear. It's not hard and usually cheaper.

[whereveriroam]

Last time I went into REI which was at the end of July I may have been the only customer in the store (Chandler). My visit was at a slow time, around 2PM midweek but it didn’t feel right. I mentioned it to the cashier and he told me that it had been like this since after the 4th of July.

I can’t remember when the last time I spent more than $20 in there. I just buy last minute Pro Bars there now. They should start selling guns and fishing gear!

[LindaAnn]

I stopped going to REI back in 2018 when they stopped carrying merchandise from Vista Outdoor brands because some of the companies under Vista’s umbrella sell ammo and hunting gear. I think REI ended their little Vista ban after a year or two, but I never went back to shopping there. Since 2018, I’ve spent maybe $200 at REI, which is a small fraction of what I’ve spent on hiking/outdoor gear at other retailers in that same timeframe. Their merchandise is generally overpriced, and the employees are usually kind of wacky.

[FOTG]

With such big losses, it makes me wonder how they justified the building of their new Glendale location?

[xsproutx]

@FOTG

And if you look at their actual public findings instead of weird go broke comments, you are sneaking into the real problem…

Capex. They saw covid money, they opened a record number of stores, the market can’t sustain that. They tend to buy land and build buildings which are huge expenses. Look at the numbers associated with this!

Covid brought a lot of more casual people as Chums mentioned above. This definitely drove sales! I work in supply chain at a high level and know more about the supply chains of fortune 100 companies than most and this basically was the mistake almost all of them made (insert commentary about quarterly results driving vision being problematic).

Of course, it didn’t last. But REI and many others pivoted their business to the dollars spent by that crowd. For REI? Clothes. Casual clothes but also hiking/sport. So you’ll notice that roughly 20% of the floor plan (category management) of most stores has been converted to more clothing, typically taking away a row of backpacking food, a short row of backpacking utensils/extras, a short row of biking gear (don’t understand that one tbh). Not the same at every store, but yeah. Additionally, they put more emphasis on REI branded clothing and equipment but stepped down their QA on the same. This led to their house brand going from being rated “great bang for your buck” to “this isn’t good”. Literally no one was asking REI to make shoes again.

At the same time, cottage manufacturers became bigger than ever during the same time period and REI just snubbed it again. Some of their house products like the flash 22 or flash 55 and sun hoodies used to just be considered clear values and outperforming their price points. They’ve now raised the prices on those by 20% or more while lessening the quality (big example would be their tent line). So when you’re now competing at a higher price than a cottage, that more people are now familiar with than they used to be, and that cottage is making a better product? You lose.

No woke or go broke, just typical dude poo mess of trying to live by the quarter/die by the quarter versus long term focus.

[TooOld2Hike_EP]

Well I stopped shopping at REI in late 2021 (before the scamdemic Oops. I forgot that the plandemic started just before the Nov 2020 elections) after they sent their "members" an email blast proudly telling us how they were going to actively send part of "our" proceeds to certain proud groups, actively advocating for them. ("Members" in quotes because the "Co-Op" didn't ask me for my opinion.)

I could not be a part of that for spiritual reasons.

Ironically, REI wandered off the trail when they did this. By sending money to certain groups, REI has essentially become a church/charity, promoting a religion that, again, I cannot be part of. (I wrote and told them so.)

So for me, it is "Go Woke, Go Broke."

I like to think that other like-minded folks are making their voices known. (As with Bud Lite.)

(As an aside, I recently had to disassociate with a certain Trail Association for the same reason. A few weeks ago I reported a problem with their Water Reports. They fixed the problem and thanked me. In between time, I explored around their website and tripped across their REI-like Policy. Not only do they force their Policy on their "members," but they too have wandered off trail by "advocat[ing] for public and private-sector policies that promote [their woke agenda]." So they're no longer an Assn focused on a Trail. They've become social "justice" (so-called) warriors. Too bad, because I was thinking about offering to help brush some trail this fall. But I can't be part of that Assn now.)

[chumley]

Politics in business is an interesting relationship. I suspect that there are times that a business will take a stand on an issue while recognizing that it may impact their business negatively, and choose to do so anyway. But I would guess that more often than not profits and the bottom line rules the day. If a company feels like a decision will have more of a negative impact on their ability to turn a profit, they're probably not going to do it. Certainly there are miscalculations that are made along the way, but I'm pretty sure somebody out there is getting paid a lot of money to do those calculations. Hopefully the ones doing the miscalculating find themselves in a new career.

[Mountain_Rat]

@TooOld2Hike_EP
I know just the trail association you speak of, and I did the same. I joined, then even did a fund raising event for them.
Then one month I received my news letter and out of the blue, it was like a print version CNN, but on crack. That was it for me. I don't need to pay to be guilted to death - I can turn on any network news outlet and get that for free.

[TooOld2Hike_EP]

@Mountain_Rat @DixieFlyer
Glad to hear that I'm not alone.
They're going down the same path as "The [ ] Scouts."