Huge week for consumer news. Target and Deckers tanked, Urban Outfitters soared and Williams-Sonoma managed to get out of a tricky earnings report more or less unscathed.
But one of the bigger stories, and biggest moves, happened in a name from the past for reasons no one is really discussing.
Peloton started the week strong in both calls and price action. Suddenly on Thursday morning, in an otherwise bland tape shares started popping, ramping 10% apparently out of nowhere but, as it turns out for pretty good reasons. Trump's Biggest Beautiful Bill didn't just crush solar stocks. It also revised some key terms applying to health savings accounts (HSA). Specifically, the bill expanded the amount and ways money put into an HSA can be used without incurring a 20% penalty.
Among the uses now approved with a pre-existing medical condition? Buying a Peloton.
In effect, customers can now potentially buy almost anything from Peloton's suite of Treads, Bikes, and Rowers with what amounts to pre-tax dollars. Depending on your tax bracket, that can take quite a cut out of the price of a premium bike (a bike that happens to be perfect for HSA purposes since it tracks your use metrics).
is this a game-changer for Peloton? Probably not but it's another step away from non-sustainability for a company that was all but given up for dead multiple times over the last few years. To work as an investment Peloton needs to sell a trickle of equipment to customers incented to retain their memberships.
People purchasing equipment with HSA/FSA funds fit the bill perfectly.
Those interested in exploring the existing program with Truemed and Peloton are invited to check it out here. I've already got my bike and, happily this week, shares.
The Earnings are in and ON is the Last Shoe Co Standing
For three years the best secret trade in retail was "Short Nike, Long Everyone Else making shoes":
That changed this year as every shoemaker except ONON is not just down but for the most part taking a beating.
If you can't have a strong marketplace, and this economy isn't, there's no better tailwind than taking market share. Decker's disaster only made official what has been obvious for months: with or without the tariff, we may have seen peak athletic shoe.
Another Huge Week Coming
The XRT was pretty resilient this week despite a mixed bag of quarters. Now that we've heard from the Majors it's time to get ready for the slate of lesser names reporting next week. There isn't a sector on extant trading harder than the retailers right now. Rest up this weekend and get ready for the flood.
