Thursday, August 6, 2026

Costco (COST, $941.99) had another very good month in July and comped up 6.6% ex items, similar to recent months and indicating strong underlying momentum as it continues to benefit from loyal members, its extreme value proposition, and below-market fuel prices, which are driving incremental trips as gas prices ease from recent highs but remain well above year-ago levels.

• Reported comparable sales increased 8.9% after +8.8% in June, while total sales for the four-week month of July grew 11% y/y to $23.12B.
• Comps ex gas and forex grew 6.6% after +7.0% in June and included +6.9% in the U.S., +4.9% in Canada, and +6.6% at Other International, and digitally-enabled comps grew 18.2%.
• Traffic increased 3.6% worldwide and 3.3% in the US, avg transaction grew 2.9% ex gas and forex, and excluding all gas sales entirely and the impact of forex, comps increased 6.7%.
• Higher-margin non-food categories grew by a mid-single-digit rate.
• DoRCR INSIGHT: Costco continues to be one of the best stories in retail with its ~90% member renewal rate, extreme value, and below-mkt gasoline prices, and strong momentum should continue as all the major elements of the company's success remain intact.

Ralph Lauren (RL, $380.78) had another strong and better-than-expected quarter -- 1Q27, ended June -- driven again by particularly strong performance in Asia, where retail comps increased 23%, continued strength in North America (comps up 9%), and underperformance in Europe (up 1%), and mgmt raised full-year rev guidance slightly, to +5%-6% y/y, and raised op margin by 20 bps.

• Revs were $1.96B, up 13% y/y constant currency and above the Street's $1.87B, driven by low-double-digit % growth in global DTC comps and mid-teens % growth in wholesale.
• RL's core biz grew by a mid-teens %, and high potential categories women's apparel, outerwear and handbags continued to outperform and grew by 20%+.
• Average unit retail grew by 15% across RL's DTC network after +mid-teens % in 4Q26.
• Adjusted EPS increased 22% to $4.59 vs. the Street's $4.32 and incorporated 140 bps of gross margin improvement on the higher AUR and favorable channel + geographic mix, which more than offset pressures from tariffs and other product costs.
• Ending inventory was down 5% y/y after being up 7% in the fourth quarter.
• FY27 guidance is for 5%-6% growth in constant-currency revs from FY26's $8.11B and for 60-80 bps of op margin expansion and reflects a slight benefit to both from a 53rd week.
• DoRCR INSIGHT: Continued strong growth in AUR on top of big prior-year increases speaks to Ralph Lauren's very strong assortment and product quality, brand loyalty, new customer acquisition and effective management of distribution across DTC and wholesale.

e.l.f. Beauty (ELF, $86.37) had a strong and better-than-expected 1Q27 (June) overall and grew sales 36% y/y, similar to the fourth quarter and again driven by last year's acquisition of rhode skincare -- deal closed in August, $1B valuation -- while adjusted EPS were more than double Street estimates, largely b/c of a $50M IEEPA tariff refund, and mgmt raised full-year sales and EPS guidance.

• Total sales were $479.4M vs. the Street's $431.2M and included $160M in sales from rhode; ex this, organic sales would have fallen by a HSD% y/y, consistent with internal expectations and reflecting a tough y/y comparison, some of it related to an ERP transition last year.
• Sales were strong in both retailer and e-comm channels in the US and internationally.
• Adjusted EPS were $1.75 vs. $0.89 last year and the Street's $0.71 estimate and incorporated a 1,400 bps increase in gross margin, 1,050 bps of it from IEEPA tariff refunds, and the remainder from pricing benefits and lower tariff rates vs. last year's first quarter.
• Excluding the tariff refunds, adjusted EPS would have been $1.07 vs. the Street's $0.71.
• FY27 guidance now includes total sales of $1.94B-$1.97B vs. a prior $1.84B-$1.87B, adjusted EBITDA of $401M-$407M vs. $335M last year and a prior $379M-$385M, and adjusted EPS of $3.50-$3.55 vs. $3.13 in FY26 and a prior range of $3.27-$3.32.
• The new sales range implies 18%-20% y/y growth vs. a prior +12%-14% growth.
• Also of note, earnings guidance assumes the $50M in tariff refunds in the quarter are fully reinvested in the business, in the form of lower prices and increased marketing.
• DoRCR INSIGHT: Continues a big uptick in the overall business that began in the third quarter after more of a mixed 2Q26, and the rhode acquisition continues to look like a real win, though the sharp decline in organic growth in the core e.l.f. brand is concerning -- despite the comparison call out -- given the trend, with only very slight growth in the prior two quarters.

Bob's Discount Furniture (BOBS, $18.80) had a solid and upside/in-line 2Q26 (June), with slight acceleration in the comp, from +1.2% in the first quarter to +2.3% in the second, though in-store traffic remained down y/y, while adjusted EBITDA decreased y/y as Bob's cycled "unusually favorable freight rates" in 2Q25; mgmt reaffirmed full-year guidance, including ~20 new stores.

• Total revs grew 9% y/y to $619.6M on the comp and new store growth, including four new stores in the quarter, which took the ending count to 218 stores in 27 states.
• The +2.3% comp was driven by a higher average order value and higher conversion, which were partially offset by lower in-store traffic compared to 2Q25.
• Adjusted EPS were $0.20 vs. $0.29 last year and the Street's $0.20 and incorporated a 100 bps decrease in gross margin as Bob's cycled the low freight rates and as a favorable mix shift and higher protection plan and delivery margins provided some offset.
• Inventories look fine/good and were down 1% y/y, including tariff refund impacts.
• Guidance for 2026, which has 53 weeks, still includes comps up 1.5%-2.5% vs. the Street's +1.8% estimate, total revs of $2.60B-$2.63B vs. $2.37B in 2025, and adjusted EBITDA of $255M-$265M vs. $240.8M in 2025 and the Street's $261.0M estimate.
• The extra week is still expected to add $40M to revs and $5M to adjusted EBITDA in 2026.
• Also of note, adjusted EBITDA guidance does not include IEEPA tariff refunds.
• DoRCR INSIGHT: Bob's is taking share in a fragmented and not-well-served area of retail -- selling furniture to consumers of more moderate means at everyday low prices -- and is an unusual store growth story within that space, but the company's target customer is also under stress from persistent inflation in some areas and is now dealing with higher gas prices.

Arhaus (ARHS, $8.23) saw a nice sales trend improvement in its 2Q26 (June) as comparable delivered sales increased 4.0% vs. the Street's (1.6%) estimate and after (1.7%) in the first quarter, while adjusted EBITDA was essentially in line when excluding $23.8M in IEEPA tariff recoveries, and mgmt reaffirmed full-year guidance for sales and for 4-6 new showrooms on a base of 107.

• Total revs grew 7% y/y to $384.9M, and comparable written sales increased 12.5% after (5.7%) in the first quarter and were driven by strong demand for Arhaus's newest collections, building momentum in customization, and demand across product categories.
• Excluding tariff refunds, adjusted EBITDA was $46.7M vs. the Street's $46.8M estimate and down from adjusted EBITDA of $60.3M in last year's second quarter.
• Ending inventory was up 14% y/y after being up 20%+ in the first quarter.
• 2026 guidance includes comparable delivered sales of 0%-3% vs. the Street's +1.2% estimate, 3.7%-6.6% y/y growth in net revs, to $1.43B-$1.47B vs. the Street's $1.45B, and adjusted EBITDA of $160M-$171M vs. $145.1M in 2025 and a prior $150M-$161M.
• The higher adjusted EBITDA guidance reflects IEEPA tariff recoveries.
• DoRCR INSIGHT: The improved sales trend is very encouraging, especially when considering the still-difficult housing backdrop, but it is a bit surprising management did not raise full-year revenue guidance, which reflects "uncertainty related to the consumer environment, geopolitical conditions, and the timing of written sales conversion to delivered sales."