Anticipate further apparel and footwear price increases, says Morgan Stanley's Alex Straton

Pricing Trends in Apparel and Footwear - A third-party data source tracking e-commerce prices indicates a slight increase in apparel prices, but it's not a huge jump from previous trends [2][3][4] - The apparel industry has seen a mix shift into higher price point categories like work wear and tailored pants, contributing to gross margin highs [6][7] - Economists believe the full impact of tariffs hasn't been seen yet due to inventory timing, with potential one-time hits later on [8][9] - Apparel retailers typically hold three months of inventory, suggesting that the real pricing impact from tariffs will likely flow through P&Ls from November onwards [9][10] - Footwear businesses, often run as wholesale models, may see price increases more clearly in the first half of next year due to forward order books locked in for six months [11][12] Company-Specific Observations - Torrid and Anthropology (within Urban Outfitters) have shown the biggest price jumps since Liberation Day, potentially due to mix shift and strategic assortment changes [14][15] - On the footwear side, Hey Dude, Macy's, and Kohl's are showing more price increases compared to pre-liberation day levels, possibly due to a mix shift dynamic [16] - Department stores are trying to fortify themselves with popular and premium brands, actively adjusting their business model [17] Data Considerations - The pricing data factors in discounting and mix shift, but it's not possible to see exactly how these are factoring into the pricing [3] - The prices reflect the final selling price, taking into account discount codes and what shoppers actually paid [5]