Group 1 - The recent delay in tariff increases on upholstered furniture, kitchen cabinets, and vanities is expected to positively impact furniture retailers like Wayfair and RH, positioning them for potential growth in 2026 [1][2][8] - Following the announcement, Wayfair's stock rose by 6.5% and RH's stock increased by 9.3%, reflecting investor optimism regarding the tariff situation [2][4] - The Tax Foundation estimates that tax cuts retroactively applied to 2025 could reduce individual taxes by $144 billion, potentially increasing average tax refunds by $300 to $1,000, which may boost consumer discretionary spending [4] Group 2 - In 2025, RH's stock fell by approximately 50% as consumers preferred lower-priced goods, while Wayfair's shares surged over 130% due to its discount offerings [5] - Both Wayfair and RH heavily rely on imports from Asia for their products, with Asian exporters dominating U.S. furniture imports [6] - The U.S. housing market, which has been struggling due to high mortgage rates and limited supply, is expected to see a modest rebound, potentially increasing spending on home furnishings [7][8]

Core Insights - Alcohol sales in the U.S. are declining, with a Gallup survey indicating that only 54% of adults consume alcohol, the lowest in nearly 90 years [2] - The decline is attributed to health concerns, economic factors, and the rise of alternative beverages [3] Industry Overview - Economic factors such as inflation and rising living costs are making consumers more selective in discretionary spending [3] - The availability of alternatives like cannabis and nonalcoholic beverages is providing consumers with more choices [3] Company Performance - Constellation Brands reported better-than-expected fiscal second-quarter results but lowered its full-year guidance due to macroeconomic challenges [4] - The company noted significant volatility in sales, particularly in high Hispanic Zip Code areas, which are crucial for its Modelo brand [5] - 80% of surveyed consumers expressed concern about the socioeconomic environment, with 70% specifically worried about personal finances [6] Consumer Behavior - There is a noted increase in brand loyalty for Constellation's products, particularly for Corona and Modelo among Hispanic consumers [7] - The company has a higher share of Gen Z consumers compared to the industry average [8] Financial Outlook - Despite current headwinds, the company remains confident in its long-term growth trajectory [9] - The expected tariff impact on Constellation's beer business is about $70 million, with an additional $20 million on the wine business [9] - Constellation's stock has decreased by 35% this year and nearly 41% from the previous year [10] Competitor Insights - Boston Beer has also faced challenges, with its stock down nearly 27% this year [11] - The company sees long-term growth opportunities in nonbeer alcoholic beverages, which represent over 85% of its volume [12] - Anheuser-Busch InBev reported a decline in volumes, particularly in China, despite revenue and profit increases [13]

Core Insights - Costco slightly exceeded earnings expectations, but the market reaction was negative, with shares dropping 2% [1] Group 1: Earnings Performance - Costco reported an 8% sales increase to $86.2 billion, surpassing analysts' expectations of $86 billion [5] - The company achieved increases in both revenue and net income, contrasting with declines reported by other retailers like Target and Macy's [3][4] Group 2: E-commerce Growth - E-commerce revenue rose by 13.6% year-over-year, contributing to better-than-expected sales [6] - For the full fiscal year, e-commerce sales increased by 15% to $19.6 billion, representing 7% of net sales, with a 27% increase in traffic to the e-commerce site [7] - Management noted that nearly half of new memberships are from individuals under 40, although online members are less likely to renew [8] Group 3: Holiday Strategy - Costco has begun its holiday season preparations, but CEO Ron Vachris indicated a shift in product offerings, focusing on high-ticket items rather than traditional seasonal goods [9][10] - The company has reduced its stock of discretionary items, signaling an expectation of continued low discretionary spending [11] Group 4: Market Position - Despite a solid quarter, Costco's stock performance has lagged behind the S&P 500 by over 13 percentage points [12] - The company is well-positioned to retain value even if consumer discretionary spending declines further [12]

Core Insights - Macy's, Inc. reported first-quarter fiscal 2025 results with both top and bottom lines exceeding Zacks Consensus Estimates, although both metrics declined compared to the previous year [1][3] Financial Performance - Adjusted earnings were 16 cents per share, surpassing the Zacks Consensus Estimate of 14 cents, but down 40.7% from 27 cents in the prior year [3] - Net sales reached $4,599 million, exceeding the consensus estimate of $4,458 million, but decreased by 5.1% year over year [3] - Comparable sales fell by 2% on an owned basis and 1.2% on an owned-plus-licensed-plus-marketplace basis compared to the previous year [3] Brand Performance - Macy's brand comps declined by 2.9% on an owned basis and 2.1% on an owned-plus-licensed-plus-marketplace basis [6] - Bloomingdale's brand saw a 3% increase in comps on an owned basis and 3.8% on an owned-plus-licensed-plus-marketplace basis [6] - Bluemercury brand experienced a 1.5% increase in comps on an owned basis, marking the 17th consecutive quarter of growth [6] Margins and Expenses - Gross margin remained flat at 39.2%, with improved merchandise margins offset by increased delivery expenses [7] - Selling, general and administrative (SG&A) expenses were $1.91 billion, up 0.1% year over year, with SG&A as a percentage of total revenues rising 170 basis points to 39.9% [8][9] - Adjusted EBITDA was $324 million, down 11% from $364 million in the prior year, with an adjusted EBITDA margin of 6.8%, down 50 basis points year over year [9] Cash and Equity Overview - The company ended the quarter with cash and cash equivalents of $932 million and long-term debt of $2.77 billion [10] - Merchandise inventories declined by 0.5% year over year [10] - The company repurchased 8.7 million shares for $101 million, with $1.3 billion remaining under its $2 billion share repurchase authorization [11] Guidance for Fiscal 2025 - Macy's updated its annual guidance, expecting net sales between $21 billion and $21.4 billion for fiscal 2025 [14] - Comparable owned-plus-licensed-plus-marketplace sales are projected to decline by 0.5-2% year over year [15] - Adjusted earnings per share are expected to be between $1.60 and $2.00, down from the previous estimate of $2.05-$2.25 [16]

Industry Overview - The restaurant industry is navigating a dynamic environment influenced by digital innovation, changing consumer expectations, and economic pressures [1] - Companies are facing tariff-related uncertainties but are likely benefiting from alternative raw material solutions and compelling product offerings [1] Earnings Expectations - Total earnings for the Zacks Retail-Wholesale sector are expected to rise by 1.6% year over year, with revenues projected to increase by 4% year over year [5] - Potbelly Corporation, Dine Brands Global, Inc., and Bloomin' Brands, Inc. are set to report their first-quarter earnings on May 7 [1][7] Company-Specific Insights Potbelly Corporation - Potbelly's first-quarter performance is expected to benefit from digital momentum and the relaunch of its Perks loyalty program, along with menu innovation [8] - The Zacks Consensus Estimate for Potbelly's first-quarter 2025 revenues is $112.6 million, indicating a growth of 1.3% from the previous year, while EPS is expected to show a loss of 2 cents, a deterioration of 300% [10][11] Dine Brands Global, Inc. - Dine Brands' performance is likely to be supported by operational improvements and brand revitalization efforts, including the Applebee's Looking Good reimage program [12] - The Zacks Consensus Estimate for Dine Brands' first-quarter 2025 revenues is $215.3 million, indicating a growth of 4.4%, while EPS is expected to be $1.18, a decline of 11.3% from the previous year [13] Bloomin' Brands, Inc. - Bloomin' Brands is expected to benefit from off-premise channels, remodeling efforts, and technology upgrades [14] - The Zacks Consensus Estimate for Bloomin' Brands' first-quarter 2025 revenues is $1.04 billion, indicating a deterioration of 13.3%, with EPS expected to be 57 cents, a decline of 18.6% [16]