Consumer Discretionary

Report by The Retail Tracker

Brands with good momentum include Lululemon, Abercrombie, Chico’s, Steve Madden, LVMH, Prada, Ralph Lauren and Macy’s. According to The Retail Tracker, these retailers are entering the back half of the year with the consumer on their side and good assortments. In the improvement lane, they highlight Gap, Target, American Eagle, Bath & Body Works and Nike. They also like the risk:reward in two currently out of favour names - Williams-Sonoma (a high-quality company, with exceptional brands / leadership) and Victoria's Secret (left for dead / trades at a steep discount).

Consumer Discretionary

Report by Gordon Haskett Research Advisors

In Adrian we trust - CFO Adrian Mitchell continues to impress; his experience / background has armed M with more discipline and retail acumen. Having swiftly adjusted the composition of inventory to non-pandemic winners, M's sales performance has been impressive, particularly vs. its direct peer group. Concurrently, inventory levels remain healthy (up only 7% at the end of 2Q22 vs. a 41% average increase at peers). GHRA does not believe 3Q22 comp trends have deviated materially from the company's implied guide and highlights a number of tailwinds heading into holiday ’22. Stock trades sub 4x EPS and EBITDA. TP $24 (40% upside).

Consumer Discretionary

Report by The Retail Tracker

Bed Bath & Beyond (BBBY) - Lacked inventory, energy, and sales help. Heard story after story about disappointed college shoppers.
Torrid Holdings (CURV) - Very under the radar. Website looks amazing with denim balanced with wear to work, dates and dresses.
Ralph Lauren (RL) - Very strong all around. Polo store looks outstanding and the Polo men’s assortments at Macy’s and Bloomingdale’s fantastic. Also found the Lauren sets in apparel and handbags in Macy's significantly improved.
Capri Holdings (CPRI) - Kors has some good new styles that break out of the logo story. Stores are cleaner promotionally than they have been. Versace was still very busy and is trending.

Consumer Discretionary

Report by Gordon Haskett Research Advisors

Regaining its mojo - shares surge on Q3 earnings beat / decision to hire AlixPartners to review business. Looking ahead to 2022, Chuck Grom believes Macy’s can strongly build off its successful 2021 campaign, GPM in the high 30’s looks sustainable, and is excited about the launch of a curated 3P digital marketplace. The company’s more concerted effort to unlock value and overall improved margin / capital disciple now warrant a higher multiple than Chuck has been willing to underwrite in the past. He is modelling FY21 EPS of $4.73 (but sees upside well north of $5.00) and FY22 EPS of $4.75. TP $50.00 (55% upside).