Retail, Apparel and Consumer Products: June data remains hot; expect fall to be cool

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Retail, Apparel and Consumer Products: June data remains hot; expect fall to be cool

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Retail, Apparel and Consumer Products

June data remains hot; expect fall to be

cool

Industry Overview

Retail spending increased 6% YoY in June 10 July 2026

BAC aggregated credit and debit card data indicates June retail spending increased 6% High Yield Credit

year-over-year, in-line with May. Elevated federal tax refunds continued to provide a United States

tailwind. According to IRS data, the average tax refund increased 12% year-over-year Retail and Apparel

through May 8. We expect retail spending to moderate in 2H26 as the tailwind of

refunds dissipates and (1) inflation and (2) constrained consumer budgets become larger

challenges.

Pet store stabilization

Pet store spending was flat year-over-year in June, in-line with May. The category has

both secular headwinds and tailwinds. Headwinds include (1) increased competition from

online and mass channels and (2) a shift towards smaller dogs and cats, which consume

William M. Reuter

less than larger dogs. Tailwinds include (1) delayed marriages; (2) lower human birth Research Analyst

rates; and (3) higher interest in pet adoptions as indicated by Google trends data. We BofAS

+1 646 855 6363

expect Petco benefits from these trends, supporting our Overweight rating. william.m.reuter@bofa.com

Michael DeRienzo

Research AnalystClothing continues to benefit from tax returns BofAS

Clothing spending increased 7% year-over-year in June, an acceleration from the 5% +1 646 855 7973

increase in May. We continue to attribute the strong results to incremental federal tax michael.derienzo@bofa.com

returns. We expect results will begin to moderate going forward given (1) inflation and

(2) the discretionary nature of apparel.