Key Points: Brands are supposed to be more valuable than resellers, but Costco’s stock has outperformed Pepsi, Dick’s has fared a lot better than Nike, and Ulta has bested Estee Lauder. This report analyzes dynamics in the footwear, beauty and home furnishings industries to understand what, if anything, is afoot.
Key Points: Another earnings season is winding down. As a group, the 140 consumer stocks we track grew Q4 revenues by +4%. Profits grew marginally but were +6% excluding the volatile auto sector. Normalization was evident in the results. Leisure stocks are still in recovery mode. Durables are battling a post-COVID hangover, and both autos and staples are struggling to get price and volume back into balance. This report is a consumer 10-K of sorts
Key Points: Amazon might be a tech stock, but its business model is very physical. Andy Jassy recognizes that. Since he took the helm, Amazon’s employee count is basically flat, fulfillment center growth has slowed to 8%, and AWS has extracted two additional years of service from its data centers. Mr. Jassy is squeezing blood from a stone, and the aim of this report is to figure out how much opportunity remains, and what’s baked
Key Points: Spending on leisure has begun to recover, but if the category’s PCE share were to return to trend, revenues would grow +10-12% in each of the next two years. That’s more than double the pace of overall consumption, and it doesn’t even presume a recovery of sales that were lost during the pandemic. We think leisure stocks have legs.
Key Points: Over the past year, the market was convinced that higher rates would derail the consumer, but that’s not what happened. The debate is likely to get turned on its head this year – some are suggesting that falling rates will stimulate consumption, but we’re not taking the bait just yet.
Key Points: We’ve been bullish on the consumer for the past two years and at the same time, we’ve been skeptical that the low-end would be able to keep up. Stocks that cater to the low-end have indeed underperformed, and our sense is that investors have written the cohort off as a problem child. We’re starting to see reasons for optimism. Our original concern was that the low-end ran through “excess savings”, but that’s one
The consumer is spending ahead of their means. Are they living on a prayer? Our take is that consumers can keep pulling rabbits out of their proverbial hat. AI doesn’t appear to be derailing the job market, the biggest energy spike might be behind us, rising rates aren’t that costly, and balance sheets remain solid. The savings rate will flex to accommodate spending, especially for the top 20%. Consumer stocks have been terrible. The “Global Brand-emic” is at the root of the problem.
We built 3 new interactive dashboards to (i) add insight to your investment process, and (ii) save you time! “What Makes Them Tick?” lets you see how 125 stocks respond to 24 macro variables. It tells you how each retailer respond to supply chain pressure, how each leisure name reacts to labor conditions, etc. “Does Macro Matter?” lets you sort returns based on hundreds of macro conditions. Sort by alpha, “hit rate” or spread for any macro condition. “How They Behave” analyzes the correlation of…
The consumer is in an awkward spot. Real disposable income is in negative territory — a rare sight. PCE has held up, however, due to OBBB benefits and a declining savings rate. Some think the savings rate is a red flag… we see it as yellow. Consumer stocks have been a minefield. The sector has felt irrelevant in an AI world, and sales and earnings trends have lagged the broader market… despite a shot in the arm from tax refunds. We think the consumer will…
The consumer is perceived to be the stalwart of the US economy, but it’s more nuanced than that. After all, the two largest consumer markets — housing and autos — have been floundering. Those pockets of weakness have given oxygen to other areas of consumption. So long as that’s the case, the status quo can prevail. To assess what lays ahead, we quantify the macro crosscurrents acting upon the consumer. We also offer an outlook for global brands, retail stocks, consumer staples, leisure, housing and…
Rubinson Research is now four years old. We were more optimistic than most for the first three years and we’ve been more cautious than most for the past year. We’re not betting against the consumer, but our sense is that companies (and some investors) are taking the consumer for granted. We always stick to the math, and absent a major uptick in employment, the outlook isn’t terribly inspiring. This 30-minute webinar is chock-full of thought-provoking data.
We’ve spent a lot of time trying to understand how the consumer will behave in 2026 and 2027. Population growth will be anemic, job growth is already weak, and the risk associated with AI is on the come. The OBBB will serve as a counterweight, but it’ll be more of a sugar high than a panacea. We think retailers are the best bet in consumer-land due to (i) elevated tax refunds, (ii) a rate environment that favors goods over services, and (iii) the global brand-emic.