Companies and Subjects discussed in this morning's report include: Costco's strong June, with slight moderation, a solid quarterly update from Levi's, with strength in women's, Destination XL recommends shareholders reject latest offer from Zodiac, Five Below set to open its 2,000th store, low Jobless Claims...
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DoR Consumer Research
Investor Oriented | Retail & Consumer
Thursday, July 9, 2026 | Published Daily by ~11:30 AM ET
Costco's Strong June, with Slight Sequential Moderation, Solid Quarterly Update from LEVI...
THIS WEEK'S CALENDAR
UPDATED EACH MORNING
All Times Are Eastern
Monday (7/6)
- DoRCR publishes its proprietary weekly Store Opening/Closing Analysis
Tuesday (7/7)
- Nothing significant as far as we know...
Wednesday (7/8)
- La-Z-Boy doing meetings in Milwaukee, hosted by KeyBanc
- Capri Holdings at Bernstein Insights: 2nd Annual Retail Forum at 9:40 am
- Stitch Fix at Bernstein Insights: 2nd Annual Retail Forum at 11:20 am
- Costco reports June sales at 4:15 pm
- Levi Strauss reports 2Q26, call 5:00 pm, Street at sales/EPS of $1.52B/$0.24
Thursday (7/9)
- Buckle reports June sales before the open
- La-Z-Boy doing meetings in Toronto, hosted by KeyBanc
- Jobless Claims for the week ended 7/4/26 at 8:30 am, Street at 220K vs. prior 215K
- Existing Home Sales for June at 10:00 am, Street at 4.21M SAAR vs. prior 4.17M
- Aritzia reports 1Q27, call 4:30 pm, Street at comps up 30.8%, EPS of C$0.88
Friday (7/10)
- DoRCR publishes its proprietary Next Week's Calendar
- DoRCR publishes its proprietary quarterly Retail Bankruptcy Analysis
**Colors Indicate Directional Change from First Time Shown in Our Calendar**
TODAY'S EARLY TRADING
The S&P Retail ETF (XRT) is up 0.6% as of ~10:50 am vs. a 0.5% gain in the S&P 500, which is higher after another reassuring read on the labor market with the latest weekly Jobless Claims.
- Stronger retail stocks include CATO, which is up 7%, also BOBS (up 4% after a rough day yesterday), BRLT (up 5%, launching a Swiss watch collection), CRI (up 3%), W (up 3%).
- Weaker retail stocks include LE, COST, BARK, MNSO and DBI, all down 3%-9%.
MARKET-MOVING DEVELOPMENTS
All Stock Prices as of Last Close
- Reported comparable sales increased 8.8% after a 12.5% increase in May, while total sales for the five-week month of June grew 11% y/y to $29.24B.
- Comps ex gas and forex grew 7.0% after +8.0% in May and included +7.6% in the U.S., +4.9% in Canada, and +5.6% at Other International, and digitally-enabled comps grew 21.5%.
- Traffic increased 3.2% worldwide and 3.2% in the US, avg transaction grew 3.7% ex gas and forex, and excluding all gas sales entirely and the impact of forex, comps increased 7.0%.
- Higher-margin non-food categories grew by a mid- to high-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.
- Total revs were $1.56B vs. the Street's $1.52B and incorporated revs of $815M in the Americas, up 7%, $420M in Europe, down 1% and impacted by the y/y comparison related to a DC transition last year, $284M in Asia, up 12%, and $43M at Beyond Yoga, up 16%.
- Sales of women's apparel outperformed and increased 11% in the quarter, while Levi's also saw broad-based performance across markets, channels and merch categories.
- DTC revs of $793.6M grew 8% organically and reflected 5% growth in the US, 7% growth in Europe, and a 12% increase in Asia, also 17% growth in e-comm and DTC comps of +6%.
- For the quarter, DTC penetration of total revs was 51%, up slightly from 50% last year.
- Wholesale revenues were $768.4M, up 3% organically and 49% of total revenues.
- Adjusted EPS were $0.28 vs. $0.22 last year and the Street's $0.24 estimate and incorporated a 10 bps increase in gross margin on lower product costs and pricing actions, which helped offset impacts from higher tariffs and unfavorable foreign exchange.
- Inventories look good and were down 7% y/y at the end of the quarter on a dollar basis.
- FY26 guidance now includes organic revenue growth of +5.5%-6.0%, up from a prior +4.5%-5.5%, 10 bps of gross margin improvement vs. a prior flat to up slightly, and adjusted EPS of $1.46-$1.52 vs. $1.34 last year and a prior range of $1.42-$1.48.
- FY26 EPS guidance still assumes a $0.04 impact from a higher tax rate and still assumes US tariffs on imports from China stay at 30% and the rest of the world stay at 20%.
- Third quarter guidance includes 4%-5% revenue growth vs. the Street's +4% estimate.
- DoRCR INSIGHT: Solid all around, especially in the context of much consumer uncertainty and anxiety around the world, highlights Levi's ongoing focus on becoming a "DTC-first denim lifestyle brand," its continued global relevance, supportive fashion trends, including interest in new baggy styles, strong execution, and the sale of the underperforming Dockers brand earlier this year.
Analyst Actions that could move retail stocks today:
- Tractor Supply (TSCO, $29.58) Mizuho downgrades from Outperform to Neutral
- Five Below (FIVE, $180.75) Mizuho upgrades from Neutral to Outperform
OTHER DEVELOPMENTS
Destination XL (DXLG, $0.63), not surprisingly, is recommending shareholders reject a recent tender offer from FL-based Zodiac Partners to acquire the company for $0.84 per share, a 33% premium to yesterday's closing price and up slightly from an original $0.82 per share offer that was rejected on the same grounds -- undervalues the company and is highly conditional and opportunistic.
- DXLG has 55M shares outstanding, so the $0.84 offer implies an equity value of $46M.
- DXLG shares are down 30%+ YTD, and the current market cap is $35M.
The Buckle (BKE, $41.46) had a solid June and comped up 2.4% on top of +3.8% last year after a 2.2% increase in May on top of +1.2% in May 2025, while the company's total sales for the five-week month of retail June 2026 grew 5% year-over-year to $112.0M.
Tesco (UK) is exploring the sale of its Central European operations acc'd to the Financial Times, which says the company is working with bankers and wants to focus on growing profits with its core UK business and also notes Tesco's European division did GBP4.5B in revs last year vs. total Tesco group revs of GBP66.6B; Tesco has 560+ stores in Hungary, the Czech Republic and Slovakia.
Style Capital (Milan, private equity) has made an investment of an undisclosed amount in Paris-based fragrance house Essential Parfums, the firm's first investment in the beauty space, while founders Geraldine and Stanislas Archambault have retained majority ownership.
CA-based skincare/makeup brand Versed has been acquired by Windsong Global's Belle Brands platform for an undisclosed amount and will join JVN Hair, Pipette and KVD Beauty in the Belle portfolio. Versed was founded in 2019 by entrepreneur and investor Katherine Power, has 35+ skincare and makeup SKUs, and is sold by Target, Ulta, Walmart, Amazon and other retailers, as well as DTC online.
COMMERCIAL REAL ESTATE
Five Below will grand-open its 2,000th store tomorrow, at 299 Commerce Avenue in LaGrange, GA, part of a plan to open ~150 net new stores this year on a base of 1,921, or 8% y/y growth.
Sukoshi, a Toronto-based Asian beauty retailer, has opened its ninth US store, in Frisco, TX at Stonebriar Centre, and has eight US stores listed as "Coming Soon" on its website, including Oakbrook Center in Chicago, Fashion Show Las Vegas, Washington Square in Portland, OR, Westfield Galleria in Roseville, CA, Los Cerritos Center in Cerritos, CA, Willowbrook Mall in Wayne, NJ, Scottsdale Fashion Square in AZ, and Westfield UTC in San Diego, link here to company website.
MANAGEMENT UPDATES
J.Crew has hired Dyson Global President, Dyson Beauty since 2022 and former 19 year Estee Lauder exec Kathleen Van Nest Pierce as President of the J.Crew label, starts in early August.
MACRO/CONSUMER INSIGHT
Out at 10:00 am, Existing Home Sales for June were weaker than expected and fell 2% m/m to an annualized 4.09M vs. the Street's 4.21M estimate, while sales increased 3% y/y compared to June 2025, and the median price for an existing home rose 2% y/y to a record $440,600.
- DoRCR INSIGHT: The housing mkt is still in a tough place overall and being held back by high mortgage rates, high prices, and limited supply as those with lower rates remain in place to keep their rates, and this all continues to be an overhang for home-oriented retail.
Out at 8:30 am, Jobless Claims for the week ended 7/4/26 were lower than expected at 215K vs. the Street's 220K estimate and down 2K from a revised 217K the prior week, while Continuing Claims, which are reported with a week's lag, increased slightly, to 1.81M.
- 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.
Out Tuesday and acc'd to the U.S. Energy Information Administration, a gallon of regular Unleaded Gasoline cost $3.78 on average across the US for the week ended 7/6/26, down $0.05 from the prior week but up $0.65 per gallon from the same week last year.
- A gallon of diesel cost $4.58, down $0.09 on the week but up $0.84 from last year.
- DoRCR INSIGHT: The easing trend is definitely welcome, but gas in the $3.80 area is still problematic for consumer discretionary spending, especially by those in lower-income brackets, while diesel at $4.50+ per gallon is a headwind to retailers' transportation costs and margins.
Source: Labor Dept and Bloomberg (for chart)
SELECT ANALYST ACTIONS
Five Below (FIVE, $180.75) Mizuho upgrades from Neutral to Outperform but lowers its target from $225 to $220, views the nearly 30% pullback in the stock from its April highs as a buying opportunity and expects sustained momentum -- albeit with some slowing in the comp after the first quarter's +22.7%, which was driven in part by the squishy toy trend -- on strong merchandising.
Lululemon (LULU, $113.62) Jefferies maintains a Hold rating and $115 target after fieldwork and channel checks, says the merchandise assortment is finally getting back to form but thinks it will take time to repair the damage that has been done over the past several quarters and rebuild customer trust, stabilize traffic and normalize overall productivity.
Ollie's Bargain Outlet (OLLI, $61.88) Truist maintains a Buy rating but lowers its target from $112 to $80 after reviewing its proprietary card data, also lowers its 2Q26 (July) comp forecast from +1% to (3%) and says higher gas prices have been a bigger headwind for Ollie's, in part because the company doesn't have an e-commerce channel to help offset fewer visits to the stores as consumers consolidate trips; that said, Truist also thinks the stock, which is down 44% YTD, is oversold.
Tractor Supply (TSCO, $29.58) Mizuho downgrades from Outperform to Neutral in front of 2Q26 (June) results in two weeks, thinks trends were soft through the quarter and expects a guidance cut, also says the brand is strong and has high customer affinity but will need time and possible cost restructuring and re-investment spending to improve the trajectory.
Search Select Analyst Actions for the past 12 months here
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