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
John Zolidis updates his best Long and Short ideas in Retail and Restaurants to start Q2. This follows a successful first quarter, where his average Short fell 11%, while his average Long was flat. Both compared favourably to his universe, which was down 6%, on average. The key change this quarter sees John turn bearish on TXRH as the business decelerates, margins inflect negatively and consensus forecasts appear too high. Compounding matters, the shares also trade at a premium to historical levels. Additional Short ideas include Cava, Dollarama and Tractor Supply, while on the Long side, he continues to be bullish on names such as Ollie's Bargain Outlet, Sprouts Farmers Market and Walmart.
Edition: 209
- 18 April, 2025
Consumer Discretionary
TSCO has responded to its latest earnings miss by adding structural leverage to the balance sheet and by planning to ramp unit opening. These actions, by themselves, don't add an enormous amount of incremental risk, but they do signal that management is not acknowledging the change in the environment. John Zolidis thinks consensus comp assumptions for 4% growth in 2024 and 2025 are out of reach. He also sees risk to EBIT margin forecasts. TSCO is in the midst of a multi-quarter downward revision trend, which should make it an excellent hedge for long positions.
Edition: 166
- 04 August, 2023
Consumer Discretionary
Envisioning Tractor 3.0 - Scott Mushkin provides his thoughts post the 1Q report, where every metric exceeded his forecast, which drove a significant bottom line beat. As impressive as this was, R5’s research continues to point to even more opportunities for the company in the future. Specifically, they see an expanding TAM driving sales, EBIT and EPS growth, as well as higher ROIC. TSCO remains R5’s top long-term Buy idea. TP increased to $277 (35% upside). However, if same store sales run ahead of their forecast, which they did in 1Q, upside is well north of $300.
Edition: 134
- 29 April, 2022
Tractor Supply (TSCO)
Consumer Discretionary
1Q earnings smash expectations; the longer-term outlook continues to strengthen - R5 highlight the company's ability to create a unique rural superstore format. Store-based enhancements are synergistic with TSCO’s efforts around Omnichannel, product line extensions and customer loyalty. Expects upside to comp sales in 2022 and beyond, which should yield stronger than expected EPS growth.
Edition: 109
- 30 April, 2021