Turnaround Trackers Monitor Where Traction Is Taking Hold – Overweight M & VSXY; Underweight KSS

Research evidence excerpt

Turnaround Trackers Monitor Where Traction Is Taking Hold – Overweight M & VSXY; Underweight KSS

Idea

July 8, 2026 05:55 AM GMT

Morgan Stanley & Co. LLCMSpecialty Retail & Department Stores | North Alex Straton

America Equity Analyst

Alex.Straton@morganstanley.com +1 212 761-5583

Katy Delahunt

Research AssociateTurnaround Trackers Monitor Katy.Delahunt@morganstanley.com +1 212 761-6034

Lauren Levine

Research AssociateWhere Traction Is Taking Hold – Lauren.Levine@morganstanley.com +1 212 761-4052

Shakhnoza Mamadalieva

Research AssociateOverweight M & VSXY; Shakhnoza.Mamadalieva@morganstanley.com +1 212 761-2179

Retail, Specialty RetailUnderweight KSS North America

Industry View Attractive

In our recent Specialty Retail & Dept. Store coverage

resumption, our Turnaround Trackers reinforced our OW ratings

on M & VSXY, where data suggested traction is building, &

supported our EW rating on BBWI & UW rating on KSS, where

evidence of sustained turnaround progress remained limited.

We recently resumed coverage of Specialty Retail & Dept. Stores (more here), with

turnaround execution a key input into our rating framework for BBWI, KSS, M, &

VSXY. To assess the progress these companies have made on their respective

turnaround plans, we developed proprietary Turnaround Trackers for each, which

evaluate whether mgmt.’s strategic initiatives are translating into measurable

traction across key operating & demand indicators.

The trackers left us most constructive on M & VSXY, where the majority of

indicators screened neutral to positive – supporting our Overweight ratings.

Conversely, evidence of turnaround progress was more limited for BBWI & KSS,

leading us to an Equal-weight & Underweight rating, respectively.

• M (OW): Turnaround Tracker shows M’s strategy is bearing fruit, & we