We got March data from OTEXA, and the avg Import Price was up 14.8% YY, vs 9.3% in Feb. CPI in March (reported several weeks back) was up 7.1% keeping the dollar spread still net bullish, but CPI compares get much tougher now YY, and inventories are building on the margin rising unit imports growing. March Unit imports were up 25% yy and up 61% vs 2019. We think the cost pressure persists into 2H while CPI starts to roll over in the next few months. This poses meaningful Gross Margin risk for virtually anyone who makes, brands, or sells apparel – with the exception being TJX, ROST, BURL, TDUP and anyone operating in the Athletic Space. Our favorite shorts are still JWN, DDS, M, RVLV, OXM, RL and H&M.
