On Wednesday, April 3rd at 10am ET we are hosting a 2Q24 Retail Themes call. In early January in our 1Q24 Retail Themes Call, we were decidedly still bearish on Retail as 2024 numbers still looked far too high and the risk was for a deceleration in growth in Jan/Feb. We’ve been getting incrementally bullish on retail over the last couple of months. There are a few drivers of that…
1) The ugly sales performance of January for retailers coupled with the easing comps ahead suggested a multi-month acceleration in sales trends into mid Spring
2) Forward earnings expectations have been cut once again to perhaps more reasonable (yet always too bullish) consensus
3) The market signal is suggesting the macro environment is pivoting to a higher probability of inflation and eventually real growth both accelerating, which is bullish for consumer discretionary
So the setup is for things to get better, but at the same time the market multiples suggest some expectation of that already being priced in with the XRT at a middling 14x P/E and peaky 0.6 EV/Sales. There are perhaps more puts and takes in consumer data than we have seen in a while, but directionally indicators look less bad with perhaps the caveat that the consumer recovery does continue to follow the “K” shape of wealthy getting wealthier and the low to middle income buckets fighting inflation that hasn’t been seen in nearly half a century. Beyond the near term positive rate of change setup through May we could see the back half of 2024 potentially going either way depending on the track of inflation, labor, and fed policy. We’ll run through how expectations have tracked after 4Q earnings season and where they look doable vs aggressive for 2024. As always, we’ll review the macro and consumer landscape, analyzing the key points of debate we are hearing from investors in the retail space.
Call Details:
Wednesday April 3rd at 10:00am ET
Live Video Link: CLICK HERE
Add to Calendar: CLICK HERE