Consumer Discretionary Sector Performance and Tariffs Impact

Sector Performance Overview

• 📈 Industrials, utilities, consumer staples, financials, and materials are leading sectors year-to-date.
• ⚠️ Consumer discretionary is currently the worst-performing sector, suffering from fears of tariffs.

Consumer Discretionary Resilience

• 🎯 Despite fears, consumer discretionary has been the fourth-best performing sector since April 2nd, up approximately 7%.
• 💡 This resilience is attributed to factors like tariff resilience and brand momentum.

Top Performing Stocks

• 👜 Tapestry, owner of Coach, Kate Spade, and Steuart Whitesman, is the top stock in the sector, up 26% year-to-date.
• 📈 Morgan Stanley upgraded Tapestry to overweight, citing higher-than-projected earnings and a $90 target price.
• 👕 Ralph Lauren is the second-best performer, with stocks up over 20% this year.
• 🚗 Other top performers include AutoZone, DoorDash, Domino's, and O'Reilly Automotive, all up between 17-20%.

Impact of Tariffs

• 🗣️ Tariffs remain a key factor to watch for the consumer discretionary sector.
• 📊 Of the 36 consumer discretionary stocks that have reported earnings, 31 (86%) mentioned tariffs on their conference calls, an increase from 73% in Q1 and below 10% a year ago.