Overweight Unpacked: Two Signals Supporting Turnaround Durability

研报英文原文证据摘录

Overweight Unpacked: Two Signals Supporting Turnaround Durability

oth our Turnaround Tracker & segment §e == MorganConsensusStanleydataResearchis providedestimatesby Refinitiv Estimates

analysis inform our conviction, we highlight two proprietary data points from the Quarterly EPS ($)

Turnaround Tracker that we believe are foundational to any successful retail 2026e 2026e 2027e 2027e

Quarter 2025 Prior Current Prior Current

turnaround: acquiring new customers & retaining them. Q1 0.09 - 0.60a - -

Q2 0.33 - 0.77 - -

#1 Positive inflection in returning shopper spend. Starting ~12M ago, VSXY’s y/y Q3 (0.27) - 0.11 - -

Q4 2.77 - 3.38 - -

returning shopper spend began to inflect positively, & has consistently remained

e = Morgan Stanley Research estimates, a = Actual Company reported data

positive – making for the first & longest positive streak in the history of the data set.

Put differently, customers had a positive enough prior experience to come back to

VSXY, & are finding the merchandise compelling enough to spend more y/y. Notably,

prior to ~June LY, this trend was negative for years with few exceptions – meaning

customers were either not returning to VSXY, or spending less overall y/y. To us, the

recent consistency in this metric suggests VSXY is moving beyond a one-time traffic

recovery & into the early stages of rebuilding customer loyalty. See Exhibit 1 .

#2 Spending trends improving across generations. A few recent Softlines

turnarounds share something key in common – successfully capturing a new

customer. For example – Gap & Coach targeted a younger consumer, & A&F older.

The conclusion to us is simple – it’s difficult to transform brand perception &

pricing/promotional architecture with your current customer base. Often, the more