Consumer Discretionary

Report by JJK Research Associates

Janet Kloppenburg’s latest assortment reviews have increased her confidence that both A&F and Hollister can deliver meaningful 2Q24 revenue / margin upside, driving EPS results nicely above expectations. At Hollister, she is encouraged that summer clearance levels and discount rates appear to be tracking well below 2Q23, while recent new assortment flows are much improved. At the A&F brand, assortments remain well differentiated and fashion leading; Janet sees continued success in the brand’s diversification strategy into multi/use-occasions. She raises her 2Q24 EPS estimate to $2.35 with FY24 forecast of $10.15.

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).