As shoppers hunt for discounts this Black Friday, investors are doing the same—targeting retailers best positioned for a bifurcated economy marked by high prices, slowing labor markets, and cautious household budgets.
Key Trends
- Off-price winners: TJX and Ross Stores are expected to outperform as stressed consumers trade down.
- Walmart’s strength: Stock up 21% YTD; strong pricing strategy and merchandising give it an edge over Target, which reported weak same-store sales.
- High-end resilient: Ralph Lauren (+61% YTD) and Tapestry (+70% YTD) benefit from wealthier shoppers—but valuations already reflect optimism.
- Lagging names: Macy’s, Kohl’s and other department stores face long-term pressure. Kohl’s surged 42.5% after improving its guidance but has reported 11 straight quarters of same-store sales declines.
- Value opportunities: Nike and Lululemon show weaker performance but low valuations may offer upside if demand recovers.
Investor Focus
Analysts are watching high-income spending closely. If affluent consumers—buoyed by 2025 market gains—slow down, broader economic momentum could weaken.