Enough of the big box retailers have reported that we have a decent idea about how the consumer is doing. In short: “Better than expected but the future is promised to no one”.
Even the retailers which guided higher were cautious about the next 3 quarters. Honestly, this is as it should be. As mentioned quite a bit in this space, the price of crude impacts consumer names from incremental demand to shipping to production.
Here are the 18 mid to large retailers I’m watching as they report between tomorrow morning and next Friday:
A few things to note:
Bloodbath:
The market may be up 10% YTD but the mall is getting killed. Here’s the same list of retailers, ranked by 2026 price change, with SSS estimates:
“Cautious Optimism” Isn’t Being Rewarded
Retailers' same-store sales (SSS) have generally been solid, but Wall Street is in no mood for nuance. Just look at Walmart and Target—they had decent quarters, but their stocks got absolutely punished afterward. Don't expect vague promises about a better second half of the year to drive stock prices higher.
Clumping the Losers:
Abercrombie and Lulu are both generally mall stores. They each have suffered from weak comps lately but they have largely different business models, customer bases and management strategies. ANF has highly regarded execs in charge, Lulu fired its last CEO at the start of the year and just hired a former Nike executive who can’t start until September.
As far as Wall Street is concerned, ANF and LULU are having the exact same year. I visited both stores yesterday. I don’t want to own either but they are in wildly different places.
Options traders are expecting a >15% move when ANF reports tomorrow. I’m watching the reaction of ANF, rather than betting ahead of time. I don’t expect good numbers but I do think ANF, and to a lesser extent LULU are getting to prices that are hard to ignore at 7 and 10x forward earnings, respectively.
Action Plan: Looking to trade the Reactions, not the News
The strategy is to wait for the weak reports from ANF and LULU and then look for a trade based on the market's reaction, especially if a sustainable drop in margins is announced (a potential "buy the news" moment).
Other Stories to Watch:
Macy's: Let's see if the "Berkshire Hathaway halo" disappears if they don't crush it.
Dick's: Still dealing with the mess of the Foot Locker acquisition, and Foot Locker is too tied up with a struggling Nike.
Victoria's Secret: Greatly improved stores, but the stock is being punished due to last year's performance and general consumer skepticism.
Costco: Could get the "Walmart Treatment." They'll probably post great numbers, but investors might balk at paying a massive 50x earnings multiple.
Bottom Line: It's a massive two weeks of reports, and once Wall Street adds some nuance to the numbers, there will be some huge opportunities. (P.S. Sign up for the Macke newsletter!)
If you haven’t signed up already the time to do so is now, before we’re chasing these names higher.
