Retail earnings review: price and trend sensitive consumers post-pandemic
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Retail earnings have been incredibly scattershot in May and June, with winners and losers seeing wildly differing share reactions and revealing important insights on specific subsectors.

Inventory and execution of course played a major role in determining the share trend for retailers like Macyâs (M
+1.5%), Capri Holdings (CPRI
+1.8%), and TJX Companies (TJX
-1.9%) to the positive end and for American Eagle Outfitters (AEO
+1.0%), Abercrombie & Fitch (ANF
-0.7%), Burlington Stores (BURL
-0.1%), Target (TGT
-3.8%), and Walmart (WMT
-2.1%) to the downside. 
However, there were also trends in terms of both price and post-pandemic activity that were very worth noting.
For example, strong numbers and share reactions from Nordstrom (JWN
+1.7%), PVH Corp. (PVH
-0.2%), and Deckers Brands (DECK
-1.1%) on earnings indicated an appetite for consumers to dress up again. Indeed, even The Gap (GPS
-0.9%), which reacted extremely poorly, offered some insight into consumer appetites as its more upscale Banana Republic brand saw strong sales. That singular segment simply could not make up for significant erosion in other brands offered by Gap. 
By contrast, sales eroded sharply at off-price outlets like Burlington Stores (BURL
-0.1%), Ross Stores (ROST
-1.3%), and Kohlâs (KSS
+9.4%). Suffice it to say, consumers look eager to drop sweatpants for more outgoing attire for going out. Adding to that idea were strong rebounds for cosmetics retailers like Coty (COTY), Estee Lauder (EL), L'Oreal S.A. (OTCPK:LRLCF), e.l.f. Beauty (ELF) and Ulta Beauty (ULTA) that reported strong sales.
Jefferies analyst Corey Tarlowe touted this data as representative of an âemerging fashion cycle and the growing demand for dressy and 'going out' attire as economies reopen.â Overall, that encouraged his bullish outlook on higher-end apparel. 
Additionally, margin improvements were rewarded handsomely by the market. For the aforementioned cosmetics industry this was readily apparent, but it also extended further. For example, while VF Corporation (VFC
+0.1%) reported a somewhat mixed quarter that included an over 30% jump in inventories alongside a miss on headline figures, its over 200 basis point margin expansion was clearly applauded on earnings day. A similar reaction was reflected by kitchenware retailer Williams Sonoma as well (WSM).
Standing to reason, luxury and high-margin retailers like Canada Goose (GOOS
+1.0%), LVMH (OTCPK:LVMHF
+0.0%), and lululemon athletica (LULU
+1.5%) all carried higher as well. All of these retailers targeting higher end consumers are also anticipated to be impacted far less by inflationary issues and will thus maintain pricing power moving forward.
Yet, on the complete opposite end of the value proposition, there was a final group of relative winners from retail earnings season. 
Dollar stores like Dollar Tree (DG
+0.6%) and Dollar General (DG
+0.6%) and wholesalers like BJâs Wholesale Club (BJ
+1.9%) and Costco Wholesale Corporation (COST
-0.4%) were key victors during earnings season as consumers continued to tighten belts and bargain hunt. 
âWe are taking the necessary actions now to position ourselves for accelerated growth in what I view as the most attractive sector in retail, especially in the current economic environment,â Dollar Tree CEO Michael Witynski commented during the companyâs earnings call.
If recession risks pick up into the latter half of the year, that strong position of these recent outperformers might only grow stronger from this point.