Navigating the Macro Storm: Our 1Q Offprice Preview

Research evidence excerpt

Navigating the Macro Storm: Our 1Q Offprice Preview

Consumer | Global Retailing, Softlines & Luxury Brands

May 18, 2026

Michael Binetti Navigating the Macro Storm: Our 1Q

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michael.binetti@evercoreisi.com Offprice Preview

Carson Paull ◼ A High-Stakes Week for Offprice: As Offprice 1Q earnings kicks

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off this week, broader US industry retail sales have decelerated by Carson.Paull@evercoreisi.com

Grace Wong, CFA more than tax refund seasonality alone can explain. Further,

437-236-7072 April/May/June is when retailers start lapping last year's tariff-

grace.wong@evercoreisi.com driven price increases. With our recent field work showing traffic

Isabella Mercado already under pressure since Easter, we fear the companies will

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Isabella.Mercado@evercoreISI.com be reticent to signal another round of pricing to defend comps amid

sluggish traffic and evidence that consumers are coming under

increasing budget pressure as gas prices rise. Our checks suggest

Upcoming Industry Events

some retailers already pivoting to deeper value merchandising,

TJX Field Trip to HQ May 26th

which—combined with modest freight pressure—could result in a Evercore Retail & Consumer Conference June 9th–11th

ULTA CEO and CFO Meetings in NYC July 16th cautious outlook on margins for the rest of ’26.

VFC Management Meetings in Chicago September 10th

◼ Our Pecking Order This Week: Despite the tough setup this

week, Offpricers are still best-equipped to deal with the changing

trends. We remain Outperform rated on all 3 (with ROST & BURL

in our Top 5 list). That said, based on the near-term risks, our

pecking order this week is:

1) ROST (OP, $245 target): Best multi-faceted strategic agenda

in the space (despite sentiment crowded positive), upside to

$10.00 of EPS by FY28.