Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Retail Sales - **Date**: July 2025 - **Growth Rate**: Retail sales growth decelerated to +3.7% YoY in July, down from +4.8% in June and below the consensus estimate of +4.6% [1][3][4] Core Insights - **Demand Softness**: Ongoing demand softness is evident, with expectations of no meaningful recovery in August due to deflation and weak consumer sentiment [1][3] - **Category Performance**: - Auto sales decline contributed significantly to the slowdown, accounting for more than half of the retail sales growth deceleration [1] - Excluding auto sales, retail sales growth slowed to 4.3% YoY from 4.8% in June [1] - Home Furnishing and Home Appliances showed the most significant slowdown despite still delivering high growth [1] - Positive growth was observed in Cosmetics, Soft Drinks, and Alcohol & Tobacco, attributed to easier comparisons from June and seasonal effects [1][3] Detailed Retail Sales Trends - **Overall Retail Sales**: - July 2025: 3.7% YoY growth, down from 4.8% in June - Excluding Autos: 4.3% YoY growth, down from 4.8% in June - CAGR vs. 2019: Overall slowed to 2.7% in July from 3.8% in June [2][4] - **Category Breakdown**: - Restaurant & Dining: 1.1% YoY growth, slightly improved from 0.9% in June - Home Furnishing: 20.6% YoY growth, down from 28.7% in June - Cosmetics: 4.5% YoY growth, rebounding from a -2.3% decline in June - Electronics & Appliances: 28.7% YoY growth, down from 32.4% in June [4] Stock Implications - **Consumer Sentiment**: Remains lackluster despite a modest recovery from tariff shocks in April, with deflation and a softening property market as key drags on consumption [3] - **Investment Focus**: - High growth stocks: Pop Mart (9992.HK) and Giant Biogene (2367.HK) - Turnaround plays: Yili (600887.SS) - Resilient earnings and decent shareholder returns: YUMC (YUMC.N) and Anta (2020.HK) [3] Additional Insights - **CAGR Trends**: Overall momentum across most categories worsened, indicating a broader trend of slowing consumer spending [2] - **Policy Impact**: Consumption-supportive policies could provide some support to demand sentiment moving forward [3] This summary encapsulates the key points from the conference call regarding the current state of the retail industry in China, highlighting the deceleration in growth, category performance, and implications for investment strategies.

Core Insights - Costco reported net sales of $26.44 billion for June, reflecting an 8% year-over-year increase [1] - Comparable sales for the company increased by 5.8% during the same period [1] - Year-to-date net sales reached $227.46 billion, also up 8% year-over-year [1] - The company operates a total of 907 warehouses, with 624 located in the U.S. [1] Sales Performance - U.S. comparable sales increased by 4.7% [4] - Canadian comparable sales rose by 6.7% [4] - Other international markets saw a 10.9% increase in comparable sales [4] Stock Performance - Costco shares have risen approximately 7.15% year-to-date [2] - In after-hours trading, the stock was up 1.11%, priced at $982.09 [2]

Retail Sector Overview - U.S. retail sales grew 0.1% in April after a revised 1.7% increase in March, with a year-over-year rise of 5.2% [3] - Online store sales increased by 2% in April, while food services and drinking places saw a 1.2% rise [3] - The retail sector has shown resilience despite challenges from tariffs and consumer sentiment [4] Impact of Tariffs and Trade Deals - A temporary pause on tariffs was announced after the U.S. and China reached a trade truce, which is expected to benefit the retail sector [1][6] - The retail sector's growth was hindered by fears of tariffs, but upcoming trade deals may provide a boost [5] Inflation and Economic Outlook - U.S. consumer inflation showed signs of cooling, with the Consumer Price Index (CPI) rising 0.2% in April and 2.3% year-over-year, the smallest gain since February 2021 [7] - Lower inflation rates may lead to potential rate cuts by the Federal Reserve, which would positively impact the retail sector and the broader economy [8] Investment Opportunities in Retail Stocks - Recommended retail stocks include Maplebear Inc. (CART), PC Connection, Inc. (CNXN), Carvana Co. (CVNA), and Nordstrom, Inc. (JWN), all showing positive earnings estimate revisions [2] - Maplebear Inc. has an expected earnings growth rate of 7.6% for the current year, with a Zacks Rank of 2 [10] - PC Connection has an expected earnings growth rate of 6.8% for the current year, also holding a Zacks Rank of 2 [11] - Carvana Co. is projected to have over 100% earnings growth next year, with a Zacks Rank of 2 [13] - Nordstrom has an expected earnings growth rate of 1.8% for the current year, maintaining a Zacks Rank of 2 [15]