Goldman Trader On State Of The US Consumer
Ahead of a barrage of retail earnings, including Walmart (Thursday), Target (Wednesday) and Home Depot (tomorrow), Goldman's consumer trader, Scott Feiler, talks about consumer health, the recent trendline, the biggest new inbound from investors (high-income), corporate spending update, travel trends, and the set-up into the big bellwethers set to report this week.
1. Consumer Health: After a very strong start to the first half of consumer warnings season (historic # of beats vs misses), we have moved into the “harder” part of the schedule. We saw misses and/or guide downs from TSN (miss/cut), UAA (weak guide), ABNB (slower 2Q comments), PFGC (sales miss), MODG (corporate spend comments) & CAKE (sales miss). Has the consumer actually softened relative to when the first part of EPS season began, or are we just seeing the weaker part of the schedule present? We think it is more of the latter. We do continue to hear from corporates that trends have slowed some in March/April/May vs January/February (TPR, MODG). However, it does not sound like trends have fallen further recently though since the start of the season, it just seems there has not been the bounce back many had hoped to pre-March trends.
**See EPS previews at the bottom but some big bellwethers reporting and we think there will be some good ones and some weak ones, not the unanimous beats like form the start of the season.