Retail Cross Currents: 4 key themes & top stock ideas

Consumer

Gordon Haskett Research Advisors

GHRA highlights an unusually volatile retail backdrop through late 2025 and early 2026, noting multiple “cross currents” affecting both consumers and retailers. Recent rating changes include downgrades for Dollar Tree (Reduce) and BJ's Wholesale Club (Hold), while upgrades cover Williams-Sonoma (Buy), Wayfair (Accumulate), Kohl's (Accumulate) and Dick's Sporting Goods (Hold). GHRA’s key investment themes emphasise: 1) stocks offering both EPS upside and multiple expansion (Five Below, Ross Stores, Burlington); 2) underappreciated turnaround stories (Kohl's, Dollar General); 3) selective “rate-trade” exposure favouring home furnishings over home improvement (Williams-Sonoma, Wayfair, Tractor Supply); and 4) secular winners / “Coffee Can” stocks (Walmart, Costco, TJX, Ollie's Bargain Outlet, Casey's).

- 03 October, 2025

Discount Stores & Warehouse Clubs: Reading the prints

Consumer Staples

Gordon Haskett Research Advisors

In terms of set-ups and expectations, GHRA remains most bullish on Target and least optimistic on BJ's Wholesale Club at current levels. For TGT, they increase their 1Q24 SSS view to negative 3.5% and EPS to $2.00 with GHRA’s eyes focused squarely on comp cadence along with category trends in General Merchandise. Conversely, they lower their 1Q24 core SSS view on BJ's to negative 1.0%. They think the Street's $0.83 EPS forecast is too optimistic given that gas profitability has deteriorated, which alongside continued Capital One headwinds could weigh on profits. Looking ahead, they expect BJ's to back its FY24 EPS guidance of $3.75-$4.00, but management could indicate that the lower-band is more appropriate given some of the softness YTD.

- 17 May, 2024