Companies and Subjects discussed in this morning's report include: RH reports tough quarter but expects 2H26 inflection, Sleep Number files Ch 11 with Sleep Country Canada lined up as a buyer, U. Mich. Sentiment improves as gas prices ease, Prime Day could generate $11B+ in sales with 59M households participating...
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DoR Consumer Research
Investor Oriented | Retail & Consumer
Friday, June 12, 2026 | Published Daily by ~11:30 AM ET
RH Expects 2H Inflection, Sleep Number Files Ch 11 w/ a Buyer Lined Up, Sentiment Improves...
NEXT WEEK'S CALENDAR
UPDATED EACH MORNING
All Times Are Eastern
Monday (6/15)
- DoRCR publishes its proprietary weekly Store Opening/Closing Analysis
- VF Corp doing investor meetings in San Francisco, hosted by Piper Sandler
Tuesday (6/16)
- Jefferies Consumer Conference today and tomorrow in Nantucket, retailers attending include: Walmart, Macy's, YETI, Arhaus, others to be added as they are announced...
- Housing Starts for May at 8:30 am, Street at 1.44M SAAR vs. prior 1.47M
- Vince reports 1Q26, call 8:30 am, Street at sales/EPS of $63.0M/($0.19)
- La-Z-Boy reports 4Q26 after the close, Street at sales/EPS of $569.2M/$0.82
Wednesday (6/17)
- Retail Sales for May at 8:30 am, Street at +0.5% m/m vs. prior +0.5%
- La-Z-Boy 4Q26 call at 8:30 am
- Pending Home Sales for May at 10:00 am, Street at +0.6% m/m vs. prior +1.4%
- a.k.a. Brands at the Planet Micro Cap Las Vegas Conference at 1:15 pm ET
- FOMC rate decision at 2:00 pm, investors expect no change in the 3.50%-3.75% target
Thursday (6/18)
- Carter's doing investor meetings in Boston, hosted by Needham
- Kroger reports 1Q26, call 8:00 am, Street at comps up 1.1%, EPS of $1.58
- Jobless Claims for the week ended 6/13/26 at 8:30 am, no Street est yet, prior 229K
Friday (6/19)
- Juneteenth observed, US stock and bond markets closed, DoRCR will not publish today
**Colors Indicate Directional Change from First Time Shown in Our Calendar**
TODAY'S EARLY TRADING
The S&P Retail ETF (XRT) is up 0.5% as of ~11:05 am vs. a 0.7% gain in the S&P 500. Retail stocks are closing out the week in rally mode and are now up 3.3% year-to-date as we write after several strong days and after going into the week down 3.1% YTD.
- Stronger retail stocks include VRA, which is in turnaround mode and having another good day, up 15%, also FOSL, VNCE, ODD and CTRN, all up 7% or so.
- Weaker retail stocks include SNBR, which is down 39%, also SFIX, down 7% and giving up some of yesterday's gains, RH (down 6%), LANV (down 3%) and FIVE (down 2%).
MARKET-MOVING DEVELOPMENTS
All Stock Prices as of Last Close
- First quarter revs were $800.3M, down 2% y/y and above the Street's $792.6M estimate following a 4% increase in the fourth quarter and 9% growth in 3Q25.
- Revs were negatively impacted by ~$45M b/c of a $75M y/y increase in backorders and special orders, and this dynamic is expected to continue in 2Q before normalizing in 2H26.
- Adjusted EBITDA was $56.9M vs. $106.4M last year and the Street's $48.8M estimate and incorporated a gross margin of 41.4%, down from 43.7% in last year's first quarter.
- Ending inventories were down 20% y/y after being down 19% in the fourth quarter.
- Full-year guidance now includes revenue growth of 4.5%-8% from FY25's $3.44B and an adjusted EBITDA margin of 14.2%-16.0% vs. 17.3% in FY25 and still including 270 bps of impact from pre-opening and startup costs related to RH's international expansion.
- Guidance assumes revenue growth of up to 12% in the back half of the year, driven by reduction in the backlog (+4.5 ppts), new store growth (+2.5 ppts) and new concept growth (+5.0 ppts) with the launch of the very high-end RH Estates.
- DoRCR INSIGHT: While RH is taking some share amid tough industry conditions, sales growth has slowed dramatically, even as the company continues to invest aggressively in very expensive real estate and high-end product during a period of high interest rates and low housing turnover; tariffs are beyond management's control but remain a major overhang to the story.
- Sleep Number did $1.4B in revs last year, down from $2.2B in 2021 (pandemic).
- In announcing the voluntary Ch 11, Sleep Number said its capital structure "remains unsustainable" and that it is confident a sale to Sleep Country Canada will allow it to address financial constraints and put it in a position to expand the business.
- The company expects to secure $260M of DIP financing and up to $65M in new financing and says this, along with cash flow from ops, will support it through the Ch 11 process.
- Sleep Number is hoping to maintain as many retail stores as possible, based on profitability, but has filed a motion to reject leases on 44 stores that were already closed.
- Sleep Country Canada went public on the Toronto Stock Exchange in 2015 under the ticker ZZZ but was acquired by Fairfax Financial Holdings in October 2024 and then de-listed.
- The company has 300+ corporate-owned stores across Canada.
- DoRCR INSIGHT: The mattress biz is notoriously difficult and sensitive to Consumer Confidence, which has been very weak, cutthroat pricing competition, especially around key promotional holidays, and housing turnover, which has been under pressure with high mortgage rates, and Sleep Number's premium pricing, albeit for a premium product, left it more vulnerable.
INDUSTRY INSIGHT
Amazon's four-day Prime Day event could generate $11B+ in sales acc'd to Numerator, which expects 59M households to participate, with 46% of those households browsing for deals without a specific purchase plan, 25% stocking up on items they buy regularly, and 21% planning to buy household essentials, while 22% plan to use AI to help them find the best deals.
- Amazon Prime Day will run Tuesday, 6/23/26 through Friday, 6/26/26, several weeks earlier than last year's four-day event, which ran from 7/8/25-7/11/25.
- Nearly 70% of those surveyed said Prime Day continues to offer good value for money, though half also agree "Prime Day is less exciting than it used to be."
- 62% of those planning to shop Prime Day say they plan to shop or compare prices with other retailers including Walmart (62%), Target (41%) and Costco (27%).
OTHER DEVELOPMENTS
Kohl's will also run a promotional event to overlap Amazon's Prime Day later this month, called Kohl's Deal Days, starts 6/23/26, same as the four-day Prime Day event, and continues through 6/28/26, two days longer, will include hundreds of deals under $20 and offer free shipping on all online orders, plus customers will earn $10 in Kohl's Cash for every $50 spent.
Remedy Science, a Los Angeles-based, dermatologist-founded skincare brand, has closed a Series A of an undisclosed amount at an undisclosed valuation, led by private equity firm L Catterton and with participation from existing investor Norwest and new investor Sonoma Brands Capital.
Elliott Advisors is also considering a bid for the UK's Very Group acc'd to Sky News, which said in May China's JD.com was considering a roughly $2.7B offer as part of a push to expand in the UK. Private equity firm Carlyle took control of The Very Group -- an online shopping platform -- from the Barclay family last fall and was reportedly planning a $2.7B sale of the business earlier this year. Very sells a broad assortment of non-food merchandise online.
COMMERCIAL REAL ESTATE
Buc-ee's (fuel/c-store chain, ~55 stores) will open its first store in Arizona next weekend, 74K sf, in Goodyear, will have 120 fueling positions, recently broke ground for its first store in North Carolina, in Mebane, 74K sf, and plans to open stores this year in San Marcos, TX, Benton, AR, and Murfreesboro, TN, followed by at least six new stores in 2027, Chain Store Age piece here.
Spirit Halloween plans to open 1,500+ temporary stores across the US and Canada this year, the same plan as in 2025, and expects to hire 52K seasonal associates, up from 50K last year.
MANAGEMENT UPDATES
Build-A-Bear completed a CEO succession announced a few months ago, with Chief Operations and Experience Officer Chris Hurt taking over from Sharon Price John, who is retiring as CEO but will remain on the board, while CFO Voin Todorovic has also assumed the Chief Administrative Officer position, and Chief Revenue Officer Dave Henderson has been named Chief Growth Officer.
Dollar General has promoted two execs on its technology leadership team, SVP, Technology since September 2024 Tom Hutchins to SVP and Chief Technology Officer, and SVP, AI since October 2025 Travis Nixon to SVP, Chief Data and Artificial Intelligence Officer.
MACRO/CONSUMER INSIGHT
Out at 10:00 am, U. Mich. Sentiment for June (preliminary) was better than expected at 48.9 vs. the Street's 47.8 estimate and a meaningful improvement from May's final reading of 44.8 (record low) as concerns about fuel and energy prices eased a bit with the recent downtrend.
- Expectations for inflation over the next 12 mos are +4.6% y/y, down from +4.8%.
- DoRCR INSIGHT: As we've discussed, there has been essentially no correlation between sentiment and spending, as retail sales have remained very strong in recent months, but we'll take this as a small incremental positive going into a big retail stretch later this month with Amazon's four-day Prime Day event and all the competing events by other major retailers.
Out yesterday, the Producer Price Index for May was slightly "hotter" than expected at +6.5% y/y vs. the Street's +6.4% estimate and up significantly from a downwardly revised +5.7% in April, while core PPI excluding food and energy was unchanged from April at +4.9% y/y.
- DoRCR INSIGHT: Inflation is taking its direction from fuel prices, which have spiked with the shutdown of the Strait of Hormuz, so where we go from here is highly contingent on whether or not the US and Iran can reach an agreement to end the war and reopen the strait.
Also out yesterday, Jobless Claims for the week ended 6/6/26 were higher than expected at 229K vs. the Street's 216K estimate and up 4K from the prior week but still on the low side historically, while Continuing Claims, which are reported with a week's lag, rose slightly, to 1.80M.
- DoRCR INSIGHT: The labor market slowed significantly last year but appears to be in recovery mode despite AI, geopolitical instability/uncertainty, the spike in fuel prices, etc., and this is good for consumer spending, though higher fuel prices do erode discretionary spending power.
Source: University of Michigan and Bloomberg (for chart)
SELECT ANALYST ACTIONS
e.l.f. Beauty (ELF, $60.68) Bernstein initiates coverage with a Market Perform rating and $60 target, makes positive comments about the long-term growth outlook but says earnings have been volatile following last year's acquisition of rhode and notes cost pressures related to distribution expansion, marketing and payroll, thinks stability + margin expansion are necessary for the stock to work.
Estee Lauder (EL, $88.02) Bernstein initiates coverage with a Market Perform rating and $82 target, says EL has returned to growth after several down years but thinks structural challenges will limit further acceleration/improvement and also expects channel mix in the US to continue to hold back growth as the department store industry continues its secular decline.
Steven Madden (SHOO, $45.89) Needham maintains a Buy rating and raises its target from $45 to $52 after hosting investor meetings in Boston earlier this week, says current fashion trends are in the company's favor and views the acquisition of Kurt Geiger as a compelling growth opportunity, also sees potential for an impressive margin and EPS recovery story.
Search Select Analyst Actions for the past 12 months here
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