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).
Edition: 221
- 03 October, 2025
Consumer Discretionary
New CEO Jim Conroy added to Paragon’s research pipeline - Conroy joins ROST from Boot Barn, where he created 640% alpha as CEO since 2012. However, his ManagementTrack Rating of 5.7 is a modest downgrade vs. the outgoing CEO Rentler's MTR of 7.0. Other stats include: Conroy is a "Builder" capital allocator: 70% of career capital allocated towards CapEx (Rentler is a "Capital Returner", allocating 69%+ towards Dividends & Buybacks). Conroy is an "Inconsistent Guidance Forecaster": Beats 49% & Misses 39% of the time (Rentler is a "Guidance Sandbagger": Beats 87% & Misses 7%). He has a low F.L.A.G. Risk Concern and very low historical Earnings Call Q&A Evasiveness (Conroy averaged 10% vs. Rentler's 27% over the last 5 years).
Edition: 198
- 01 November, 2024
Consumer Discretionary
Gordon Haskett Research Advisors
Time to add more Off-Price Retail exposure - while Chuck Grom turned incrementally more positive on the OPR space when he recently upgraded TJX to Buy, he has been waiting for more “evidence” that middle-income shoppers would begin to trade down, while simultaneously looking for proof that inventory levels would improve. Commentary from Walmart, Target and Kohl’s suggests that this trade down is now occurring, while most retailers have made commendable progress since 2Q on the inventory front. As a result, Chuck upgrades ROST to Buy and increases his EPS estimates for FY22 to $4.30 and FY23 to $5.40.
Edition: 149
- 25 November, 2022
Aritzia (ATZ CN), Ross Stores (ROST), Michael Kors Outlet (CPRI)
Consumer Discretionary
In their weekly report A Line uses a proprietary ranking system to build individual company performance history. Companies are graded A-C based on factors including product design, promotional activity and store feedback. Key takeaways last week:
ATZ - Grade A; scores 28/30, +2pts vs. previous week. Consistently positive feedback across the stores. The Super Puff is flying off the shelves (gone TikTok viral).
ROST - Grade B; 18/30, +2pts. Improved traffic trends driven by markdowns. Discounts are deep (e.g. women’s jeans at $7.99, $3 cheaper than last year). Sales boosted by cold weather.
Michael Kors - Grade B; 14/30, -3pts. Oct has slowed vs. Sept (lack of tourists and domestic customers who are not shopping as much in anticipation for the holidays). Increasingly aggressive promotions.
Edition: 147
- 28 October, 2022