Hardline Retail Q1 Deep Dive: Rock and a Hard Place for Housing; AZO Sets Up Best

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Hardline Retail Q1 Deep Dive: Rock and a Hard Place for Housing; AZO Sets Up Best

Equity Research

Earnings Revised — May 14, 2026

Auto Parts Retail

Home Furnishings

Home Improvement

Specialty Hardlines

Hardline Retail Q1 Deep Dive: Rock and a Hard

Place for Housing; AZO Sets Up Best

Our Call Zachary Fadem, CPA

Discretionary is out of favor (rates, gas, re-inflation, etc.), recent checks soft and guiding Equity Analyst | Wells Fargo Securities, LLC

Zachary.Fadem@wellsfargo.com | 212-214-8018

for 2H acceleration is treated as a punishable offense (TSCO, EYE, etc.). Into the next EPS

David Lantzround, we prefer defense/idiosyncratic; AZO best fits the bill.

Equity Analyst | Wells Fargo Securities, LLC

David.Lantz@wellsfargo.com | 212-214-5044

Consumer investing not for the faint of heart; we still like AZO. Nearly every company Anthony Trainor

in our Hardlines coverage is down YTD (SPX +9%) as stimulus hopes fade, oil prices spike Equity Analyst | Wells Fargo Securities, LLC

and underlying trends weak. Even relatively defensive Auto/Home retailers can't shake Anthony.Trainor@wellsfargo.com | 212-214-1953

concerns, as ORLY faded post stellar Q1 results, and investors debate whether HD/LOW Taylor Brimberg

or WSM could be next up for the TSCO treatment. All that said, we think AZO sets up best Associate Equity Analyst | Wells Fargo Securities, LLC

(pesky inflation; DIY re-accel; FY27 upside, palatable P/E). Taylor.Brimberg@wellsfargo.com | 212-214-2078

Jessica Louie

HD/LOW: Rates are key & recent CPI/PPI doesn't help. But expectations are low (we Associate Equity Analyst | Wells Fargo Securities, LLC Jessica.Louie@wellsfargo.com | 332-214-6223

model HD/LOW SSS +50/80bps), and relief pot'l possible on signs of better Spring trends

(+3.5% warmer y/y) & limited EPS revisions.