Daily Brief Consumer: Essity , Sa Sa, SEDEMAC Mechatronics, Games Workshop, Crops Corp, Gildan Activewear , iFabric , Kroger Co, Macy’s Inc and more

• Consumer Tissue is reportedly valued at €2.5–3.0bn, with a sale or spin-off under consideration and the strategic review expected to conclude during H1 2027.
• Our FY27 SOTP yields SEK299/share, supporting a SEK295 target price and 12.8% upside; neither full CMD margin delivery nor an above-range Tissue valuation is required.
• Risk/Reward is SEK250/295/316 bear/base/bull, with a probability-weighted value of SEK285/share; the SEK250 bear case assumes 11x RemainCo EBIT and €2.5bn for Tissue.

• Sa Sa (178 HK)‘s positive profit alert suggests net profit will reach HK$150m in 1H FY26/27, equaling a 2x YoY increase, ahead of the consensus. 
• 2H net profit has been historically better than 1H, meaning the market’s full-year forecast of HK$277m provides room for an upgrade. The Jul retail sales trend also supports this.
• Despite a 106% YTD rally, its 2.7x 12-month P/B is only slightly above average. With an ROE of 21-24% and net cash of HK$0.16, valuations remain not stretched.

• Pioneering Sensorless Powertrain & Genset Control Technology: SEDEMAC Mechatronics is a high-growth Tier-1 automotive electronics innovator commanding a dominant ~35% domestic market share in 2W/3W Integrated Starter Generator (ISG) ECUs and ~75%+ in Genset controllers, anchored by proprietary sensorless commutation (SLC) algorithms that eliminate physical position sensors.
• Exceptional Financial Compounding & Operating Leverage: Revenue nearly doubled from INR 5,306.53M in FY2024 to INR 10,583.80M in FY2026 (41.2% 3-year CAGR), while Net Income scaled from INR 58.78M to INR 1,035.80M, driven by gross margin expansion (10.20% to 18.82%) and EBITDA margins expanding to 21.34%.
• Strategic Expansion vs. Valuation & Capex Headwinds: Multi-segment scaling into combined ISG+EFI architectures, EV Motor Control Units (MCUs), and export markets (North America and Europe) provides long-term runway, balanced against near-term capex-driven negative Free Cash Flow (-INR 168.40M in FY2026), OEM client concentration, and premium valuation multiples at INR 3,098.00.

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• Games Workshop was already a high-return franchise; the surprise was that Warhammer’s reinvestment runway proved far larger than stagnant FY05/2013–FY05/2016 revenue implied.
• From FY05/2016 to FY05/2026, core revenue rose 5.3× and core operating profit 22× while average core capital employed increased only 3.1×.
• The broader 50-bagger setup combines proven economics, global portability, internal funding capacity, high incremental returns, substantial whitespace and a starting valuation that does not pre-price the runway.

• Crops Corporation (9428) is a Nagoya-based conglomerate best known as KDDI’s largest au/UQ Mobile retail agency in the Chubu region, but the segment that actually drives profit is a restaurant-property sub-leasing arbitrage business (Innovation Holdings/Tempo Innovation), generating 43% of operating profit from just 26% of revenue.

• KDDI itself holds a 20.32% equity-method stake with board representation, alongside staffing, building-maintenance, and overseas BPO units.

• The company seems to steadily compound revenues and profits and once you strip out the asset write-off from a small Vietnamese subsidiary, it seems to trade very cheaply on just over 7x earnings.

• The strategic review of the Consumer Tissue business (representing SEK 43,537m or 31% of 2025 net sales) is highly likely to culminate in a structural split by H1 2027, but the disutility from stranded corporate overhead could run as high as SEK 600m to 800m annually without aggressive post-separation restructuring.
• Regulatory compliance from the EU Deforestation Regulation (EUDR) and escalating Extended Producer Responsibility (EPR) packaging fees in Europe and North America will create a persistent 50 to 100 basis point margin headwind, forcing a faster transition toward high-barrier personal care products and recycled materials.
• The SEK 1bn SG&A efficiency program, designed to be fully implemented by the end of 2026 under CEO Ulrika Kolsrud, is largely on track but faces execution risk as decentralized decision-making shifts accountability to localized business areas, potentially diluting global procurement synergies.

• Gildan Activewear reported second-quarter 2026 results that reflected the impact of its HanesBrands acquisition, completed eight months earlier.
• Net sales from continuing operations increased 72% year-over-year to $1.58 billion, driven primarily by the acquired business.
• Adjusted diluted EPS from continuing operations rose 32% to $1.28.

• iFabric announced the launch of Doctor’s Choice scrubs on Amazon.ca, building on the already strong retail network, which includes Walmart USA, Target USA, and Costco Canada.
• This currently includes women’s scrub tops and bottoms in various colours, which are receiving strong reviews thus far.
• Management is executing well and at a rapid pace, as seen on the timeline on page 2, setting up the Company for long-term growth in this category as it increases distribution and penetration.

• The Kroger Company’s second quarter results reflect a mix of modest sales growth and operational progress amid ongoing industry challenges.
• Identical sales excluding fuel grew by 0.2%, a figure impacted by adverse factors such as a Cyclospora outbreak that reduced produce sales by approximately 35 basis points, lower pharmacy sales driven by the Inflation Reduction Act (about 140 basis points), and lingering effects of egg deflation.
• Despite these headwinds totaling roughly 265 basis points pressure on identical sales, Kroger managed to outperform its retail sector peers in unit trends, suggesting relative resilience in its customer base.

• Macy’s, Inc. reported second quarter 2026 results reflecting incremental progress under its Bold New Chapter strategic plan, emphasizing growth across its Macy’s, Bloomingdale’s, and Bluemercury nameplates.
• The company recorded net sales growth of 1.1% to $4.9 billion, with comparable sales increasing 2.7% overall and 2.8% on a go-forward basis.
• Macy’s comparable sales rose 1.1%, driven by the Reimagine store initiative which now includes 200 locations delivering 1.9% comparable sales growth, marking the fifth consecutive quarter of positive comps for this program.