Macke's Retail Roundup+ Articles

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The spread between valuations between classes of retailers has never been higher and shows no signs of contracting. The looming oligarchy in retail. 

Plus, 5 Below preview: Is this the most Tariff Exposed Company on Earth? 

Last weekend Barron's suggested it had the fix for what ails Target. In a piece harkening back to May's "Target Fails. Again" piece, Barron's said Target needs to unlock merchandise, get better in-stock levels, get out of the DEI business, and invest more in the infrastructure to make the Internet business profitable. 

It might be more simple than that. Click the Link and I'll explain how to tell Target is broken right when you walk in the door.

Below is my weekly video for members of Macke's Retail Roundup.

The SPDR S&P Retail ETF (XRT) closed the week up 0.5%, essentially unchanged. But under the surface, there's been a ton of action. 

Though it's been a couple of weeks since we've added to the portfolio, we've been plenty busy digesting a deluge of earnings reports and market reactions. 

Build-A-Bear Workshop (BBW) just rocketed to new all-time highs on the back of its report Thursday morning. We also heard from Dick's Sporting Goods (DKS) and Costco (COST) —both uneventful— as well as Abercrombie & Fitch (ANF), Macy's (M), e.l.f. Beauty (ELF), The Gap (GPS), and Shoe Carnival (SCVL).

Some of those names are in our portfolio, others are on our watchlist. So there's a lot going on. Sometimes it's better to let the dust settle before jumping into new positions. And that's what we've been doing. 

With this week serving as the final big retail earnings week—DG, DLTR, OLLI, FIVE, VSCO, LULU, PV, LE, and GIII all reporting—there will likely be plenty more fireworks. 

Here's...

"Life's but a tale told by an idiot, full of sound and fury, signifying nothing" - Abercrombie and Fitch's stock.

I promised drama when the mall stocks reported. As usual, the Mall delivered in spades.

Gap disappointed in a way they didn't seem to understand and fell 20%. ANF crushed estimates, spiked $25 then fell 25% in the next 2 days, ending the week about flat. Both American Eagle and Foot Locker managed to miss estimates they'd already pre-announced within the last 3 weeks (Foot Locker while hitting the semi-Golden Parachutes since the company has already been purchased).

And Costco reported its umpteenth consecutive "solid quarter", rising slightly. Just to prove yet again that there's a yawning chasm between retail giants and the rugby scrum of retail happening everywhere else when it comes to reporting quarterly earnings.

What it all means and what I'm doing about it. The Week in Review:

Gap shares are getting smoked by 20%(!) early Friday after the company Beat by too little and Guided to not enough. 

Time to Buy or Bail?

Let's break down the quarter and figure it out... 

Portfolio Update Through May 30, 2025

Fun facts most people don't know about Build-a-Bear Workshop:

• It still exists and is publicly traded under the ticker $BBW
• Shares are up nearly 50x since the COVID lows
• The stock went public in October 2004, hit $35 two months later and didn't make a new high for another 19yrs, nearly twice the expected lifespan of a Black Bear in the wild.
• (New Item): Build-a-Bear just reported its best first quarter ever.

I break down the quarter and give the company its full grade for members in the LINK

Abercrombie didn't have to be perfect. With the stock down 50% since January, even after a HUGE bounce, Abercrombie & Fitch just had to be decent. Anything better than about a 20% guidance cut would have been acceptable. Word was that foot traffic at Abercrombie was lousy. That left ne'er do well Hollister to bail out the corporate ship while $ANF tried to find a bottom. Hollister has had a nice few quarters but that wasn't going to be enough to offset the end of Abercrombie's name-brand and the huge 5 year heater of double-digit comps and fat margins.

Turns out, Hollister had plenty. The tariffs weren't so bad. Business was pretty much fine. Wall Street rejoiced... 

Abercrombie didn't have to be perfect. With shares sitting 50% lower since January sentiment around $ANF was somewhere between "skeptical" and "afraid to look". Word was that traffic was bad at Abecrombie's name-brand stores, leaving Hollister, the surly, less-good-looking younger sibling division of $ANF. Hollister had been good lately but not great. This was supposed to have been a tough quarter for "not great".

As it turned out, Hollister was pretty damn great and the warning was less-than-feared. The stock market rejoiced:

Another strong week for the Round-Up 10 Portfolio with gains last Friday (which now seems like a million years ago) taking us up to over 12% since our March 20 start date, handily beating the S&P500 and the XRT Consumer Discretionary ETF.

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...