On Wednesday, Walmart (WMT -2.95%) stock was guilty by association in the eyes of the market, a dynamic reflected in a share price drop of nearly 3%.A top investment bank published a downbeat research note on a major peer in the retail world, and the bearishness spread to Walmart's stock. Overall, however, few investors were enthusiastic about any stocks, as Walmart's decline was only slightly steeper than the S&P 500's (^GSPC -2.24%) 2.2% dip.The retail sector was in the sightsBefore the market open, Goldm ...

Core Insights - Dividend stocks act as financial fortresses during market volatility, with 85% of the S&P 500's cumulative total return since 1960 attributed to reinvested dividends and compounding power [1] - Dividend growers have outperformed the broader market since 1973 while exhibiting lower volatility [1] Costco Wholesale - Costco has transformed into a global retail leader with a loyal customer base, utilizing a membership model that ensures predictable revenue [4] - The company has a strong commitment to shareholder returns, boasting 20 consecutive years of dividend increases and an average growth rate of 12.6% over the past decade [5] - Despite a current dividend yield of 0.47%, Costco's stock has significantly outperformed the S&P 500 since 2015, reflecting strong price appreciation [6] - With a conservative payout ratio of 27%, Costco has ample room for future dividend increases, supported by projected net sales of $250 billion for fiscal year 2024, a 5% year-over-year increase, and a growing membership base of nearly 137 million [8] Visa - Visa operates one of the largest electronic payment networks globally, connecting various stakeholders without issuing cards or extending credit [9] - The company has a remarkable 10-year dividend growth rate of 17.5%, with 16 consecutive years of dividend increases [10] - Visa offers a higher current yield of 0.71% compared to Costco, with a conservative payout ratio of 21.7%, indicating strong potential for continued dividend growth [11] - The asset-light business model allows Visa to benefit from increased transaction volumes and expansion into emerging markets, positioning it for robust free cash flow and sustained dividend growth [12][13] Comparative Analysis - For investors focused on dividend growth, Visa is identified as the more compelling option due to its higher historical growth rate, lower payout ratio, and higher current yield [14] - Both Costco and Visa can complement each other in a diversified dividend growth strategy, as they have different business models and industry exposures while maintaining a commitment to shareholder returns [15] - If only one stock can be chosen, Visa is considered the better choice in this comparison [16]

Subscribers to Chart of the Week received this commentary on Sunday, April 6. Click here to get your hands on our critically-acclaimed 18- pick stock report.It feels too strange to begin Chart of the Week without addressing the elephant in the room, which is the past week’s intense oscillation that has taken place on Wall Street. U.S. President Donald Trump’s tariff policy has taken global trade by storm -- and not always in a good way. On Monday, April 7, the Dow Jones Industrial Average (DJI) suffered its ...

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies covered Core Insights - The report highlights the downside risk to China's growth due to tariff impacts and persistent deflation pressures, with the US imposing significant reciprocal tariffs on China, although some consumer electronics may be exempted [61] - It anticipates slower growth and firmer inflation in the US, driven by tariff uncertainties, leading to a decline in real consumer spending [18][20] - Retailers are significantly exposed to China, averaging around 16% exposure, with gross profit dollars potentially declining by approximately 20% on average due to category-specific blended tariff rates [35][37] - The report indicates that announced tariffs will increase costs for building inputs in the housing sector, which is particularly significant as new homes represent a larger share of the housing market than in decades [31][32] Summary by Sections Tariffs Impact on Chinese Economy - The report discusses the impact of tariffs on China's GDP growth, forecasting a downside risk to the current forecast of 4.5% for 2025 due to persistent deflation pressures [6][7] US Consumer Outlook - Real consumer spending is expected to slow significantly, with increases in prices of imported goods adversely affecting spending [21][24] - Equity market downturns could impact consumption spending among upper-income cohorts, which have seen substantial increases in net worth [26][28] Housing Market Insights - The report notes that new home sales are at their largest proportion of total volumes since before the Global Financial Crisis, indicating a shift in the housing market dynamics [32] Retail Sector Analysis - Retailers face a significant impact from tariffs, with a potential EBITDA downside of 50-70% across various scenarios without offsets [40] - Specialty apparel, footwear, and furniture sectors are among the most exposed to tariff impacts, while beauty, luxury, and staples are less affected [40] IT Hardware Sector - The report highlights that significant assembly exposure remains in China, but US-bound products have diversified to other regions [49] - Recent exemptions have reduced the reciprocal tariff cost burden significantly, leading to a lower average tariff rate for US IT hardware coverage [53][54]

Core Viewpoint - The potential for a recession is increasing due to tariff policies, which could lead to a worldwide economic slowdown as prices rise significantly [1][2]. Group 1: Costco Wholesale - Costco operates in the consumer staples sector, focusing on essential products, which typically perform better during recessions [3]. - The company's revenue forecast for the next 12 months is $1,024.03, indicating a 6.29% upside from the current price of $963.41 [4]. - Food accounts for approximately 54% of Costco's total revenue, with gasoline contributing an additional 12% [4]. - Costco's Kirkland Signature brand is priced about 20% lower than national brands, providing a competitive edge during economic downturns [5]. - Despite exposure to non-food items (26% of revenue), Costco's strong membership renewal rate of 91% during the pandemic helps mitigate risks [6]. Group 2: Dollar General - Dollar General is also positioned in the consumer staples sector, focusing on low-cost essentials, which is advantageous in recessionary periods [7]. - The 12-month stock price forecast for Dollar General is $94.75, reflecting a 6.33% upside from the current price of $89.11 [8]. - Consumables make up 82% of Dollar General's total revenue, including essential items like food and personal hygiene products [9]. - The company's strategy of maintaining low price points makes it a favorable option for consumers during tough economic times [10]. Group 3: TJX Companies - TJX operates in the consumer discretionary sector but employs an off-price strategy, selling brand-name goods at significant discounts [11]. - The 12-month stock price forecast for TJX is $135.76, indicating a 5.88% upside from the current price of $128.22 [12]. - TJX has historically outperformed during recessions, with shares rising 30% in the 2001 recession while the S&P 500 fell [13]. - Analysts have identified TJX as a top pick for potential recession resilience, despite underperforming the S&P 500 in 2020 [14].

Company Overview - Tokyo Lifestyle Co., Ltd. is a retailer and wholesaler of Japanese beauty and health products, sundry products, luxury products, electronic products, and other products in Hong Kong, Japan, North America, and the United Kingdom [3] - The company offers a variety of products including cosmetics, skincare, fragrance, body care products, over-the-counter drugs, nutritional supplements, medical supplies, home goods, food, and alcoholic beverages [3] - Products are sold through directly-operated physical stores, online stores, and to franchise stores and wholesale customers [3] Event Participation - Tokyo Lifestyle's management team will participate in one-on-one meetings with investors at the D. Boral Capital Inaugural Global Conference on May 14, 2025, at the Plaza Hotel in New York City [1] - The conference will feature approximately seventy-five presenting companies and hundreds of institutional investors, providing a platform for engagement and interaction in a high-energy environment [2]

Company Overview - Tokyo Lifestyle Co., Ltd. is a retailer and wholesaler of Japanese beauty and health products, sundry products, luxury products, electronic products, and other products in Hong Kong, Japan, North America, and the United Kingdom [3] - The company offers a variety of products including cosmetics, skincare, fragrance, body care products, over-the-counter drugs, nutritional supplements, medical supplies, home goods, food, and alcoholic beverages [3] - Products are sold through directly-operated physical stores, online stores, and to franchise stores and wholesale customers [3] Event Participation - Tokyo Lifestyle's management team will participate in one-on-one meetings with investors at the D. Boral Capital Inaugural Global Conference on May 14, 2025, at the Plaza Hotel in New York City [1] - The conference will feature approximately seventy-five presenting companies and hundreds of institutional investors, providing a platform for engagement and insights across multiple sectors [2] - The event aims to create an intimate setting for interaction between executives and investors in a high-energy environment [2]

Core Points - The "2025 Chengdu Launch Season" has been officially initiated, aiming to enhance the launch economy in Chengdu with over 300 various consumer activities planned for the Chunxi Road business district this year [1][3][6] - Chunxi Road is positioned as a global fashion consumption landmark, attracting international brands and achieving annual revenue exceeding 100 billion yuan, with a daily foot traffic of over one million [3][8] - The Chengdu government has set ambitious targets in the "Three-Year Action Plan for Promoting Launch Economy Development (2025-2027)," aiming for 6,500 new stores and over 1,000 launch events by the end of 2027 [6][8] Group 1 - The "2025 Chengdu Launch Season" service code has been launched, providing a platform for the development of the launch economy [1] - Chunxi Road will host over 300 consumer activities this year, including more than 30 global product launch events [1][6] - The area is leveraging its ecosystem, marketing strategies, and scene creation to establish itself as a global fashion consumption hub [3][6] Group 2 - The "Spring Launch" event is being organized around the May Day holiday, involving 16 major shopping malls and over a thousand brands to stimulate consumer enthusiasm [5] - As of now, there are over 600 new stores in the Jinjiang District, with an annual growth rate of approximately 200 stores [8] - Upcoming flagship stores include the first Chinese flagship store of high-end sports brand On and the first store of Fei Dacook in Chengdu [10]

Core Viewpoint - The implementation of new trade tariffs by President Trump is expected to impact various sectors of the stock market differently, particularly affecting consumer discretionary stocks due to their reliance on agricultural products and materials that influence retail prices [1][2]. Group 1: Impact on Consumer Discretionary Stocks - Consumer discretionary stocks are experiencing significant declines, with market speculation suggesting that prices for everyday products may double or triple due to tariffs [2]. - Major brands like Nike, Lululemon, and Ralph Lauren are highlighted as potential investment opportunities despite the tariff challenges, as their market positions may allow them to weather the storm [3][5]. Group 2: Nike Stock Analysis - Nike's current stock price is $54.44, which is 58% of its 52-week high, with a 12-month price forecast of $86.19, indicating a potential upside of 58.34% [4]. - Institutional investment in Nike has been strong, with $94 million invested in the last quarter, reflecting confidence in the brand's ability to navigate tariff impacts [7]. - Analysts maintain a price target of $87.4 for Nike, suggesting a potential upside of 57.1% from current levels [7]. Group 3: Lululemon Stock Analysis - Lululemon's current stock price is $261.03, with a 12-month price forecast of $371.79, indicating a potential upside of 42.43% [9]. - The brand has maintained a premium valuation with a price-to-book ratio of 7.8x, compared to the discretionary sector's average of 3.9x [10][11]. - Analysts have set a price target of $378.3 for Lululemon, suggesting a potential upside of 43% [12]. Group 4: Ralph Lauren Stock Analysis - Ralph Lauren's current stock price is $197.89, with a 12-month price forecast of $277.43, indicating a potential upside of 40.20% [13]. - Despite an 18% decline in the past month, Ralph Lauren has outperformed Nike and Lululemon, showing resilience in the market [13][14]. - Goldman Sachs has set a price target of $286 for Ralph Lauren, implying a potential upside of 49% from current levels [15].

Core Viewpoint - Tractor Supply Company (TSCO) has experienced a 17.8% decline in share price over the past six months, underperforming both the industry and broader market indices, reflecting challenging macroeconomic conditions and company-specific challenges [1]. Group 1: Stock Performance - TSCO closed at $51.32, remaining below its 200-day and 50-day simple moving averages (SMAs) of $54.52 and $54.17, respectively, indicating a potential sustained downward trend [4]. - Investors are divided on the future trajectory of TSCO, with some anticipating further downside while others see potential for a rebound [7]. Group 2: Growth Challenges - The company reported a modest 0.6% increase in comparable store sales in Q4 2024, driven by a 2.3% rise in transaction count, but offset by a 1.7% decline in average ticket size, indicating reduced consumer spending per visit [8]. - TSCO is facing mounting cost pressures, with SG&A expenses, including depreciation and amortization, increasing by 5.5% year over year, leading to a 4.8% decline in operating income and a 69-basis point drop in operating margin to 8.44% [9][10]. - SG&A costs are expected to rise another 6.7% in 2025, with SG&A as a percentage of sales forecasted to increase by 30 basis points, compounded by a tough retail environment and anticipated deflationary pressures [11]. Group 3: Growth Initiatives - TSCO is leveraging strong customer engagement and market share gains through its "Life Out Here" lifestyle assortment and convenience store format, which enhances customer loyalty [12]. - The Neighbor's Club loyalty program is a key growth driver, achieving record highs in active accounts and customer retention, while cross-shopping between Petsense and Tractor Supply is increasing [13]. Group 4: Valuation Concerns - TSCO's stock is trading at a forward 12-month P/E ratio of 22.95X, significantly higher than the industry average of 14.84X, raising concerns about the sustainability of this premium valuation amid slowing growth and rising costs [14]. - The elevated valuation may limit upside potential in the near term, especially if performance does not improve significantly [15]. Group 5: Market Outlook - The recent stock decline and ongoing challenges from shifting consumer behavior and macroeconomic pressures suggest a cautious approach for investors, as TSCO's near-term outlook remains uncertain [16].