Retail, Apparel and Consumer Products: April spending data remains robust despite elevated fuel costs

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Retail, Apparel and Consumer Products: April spending data remains robust despite elevated fuel costs

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Retail, Apparel and Consumer Products

April spending data remains robust despite

elevated fuel costs

Industry Overview

Retail spending increased 5% YoY in April 13 May 2026

BAC aggregated credit and debit card data indicates April retail spending increased 5% High Yield Credit

year-over-year, accelerating from 3% growth in March. Elevated federal tax refunds United States

provided a tailwind which is likely to persist in May. According to IRS data, the average Retail and Apparel

tax refund increased 11% year-over-year through May 1. In addition, April was unusually

warm, which likely encouraged higher sales of seasonal apparel. We expect retail

spending to decelerate in June as the tailwind of refunds dissipates and (1) inflation and

(2) constrained consumer budgets become larger challenges.

Pet store stabilization

Pet store spending increased 2% year-over-year in April, a slight acceleration from the

1% increase in March. Notably, spending has increased year-over-year for five

William M. Reuter

consecutive months, the best performance in two years. The category has both secular Research Analyst

headwinds and tailwinds. Headwinds include (1) increased competition from online and BofAS

+1 646 855 6363

mass channels and (2) a shift towards smaller dogs and cats, which consume less than william.m.reuter@bofa.com

larger dogs. Tailwinds include (1) delayed marriages; (2) lower human birth rates; and (3) Michael DeRienzo

higher interest in pet adoptions as indicated by Google trends data. We expect Petco Research Analyst BofAS

benefits from these trends and margin improvement opportunities, supporting our +1 646 855 7973

Overweight rating.