Today is the second day of Goldman's Retail conference, and follows yesterday’s slightly more constructive tone on the consumer into back-to-school and early Halloween season albeit with major concerns on the low-end (DG, DLTR), competitive environment and shorter Thanksgiving-Xmas season (see Goldman's recap here for the full rundown: link for pro subscribers).
As Goldman consumer specialist Scott Feiler summarizes Day 1 of the two-day conference, the first set of presentations have made it clear that there is no one sized fits all approach in the consumer sector. Some companies are speaking to a stable consumer and resilient economy, while others speak to a more “choosy” consumer and a challenged macro. That will likely be a key theme of the day, where the consumer is “fine enough” that some companies can continue to do well, but others that have struggled will continue to do so. "We are not in a rising tide lifts all boats, nor the opposite."
Separately, the first day of the conference also revealed a "better-than-feared and cautiously optimistic tone on the outlook for the consumer into 2H" (because that's what conferences are meant to do: boost sentiment by always painting an unrealistically rosy picture). This slightly more constructive tone was evident across sub-sectors where Goldman heard from several companies that back-to-school and early Halloween trends have been healthy. In particular, a resilient consumer continues to respond well to newness and innovation. That said, there were concern about a condensed holiday calendar (consumers shopping after the election and with 5 less shopping days between Thanksgiving and Christmas) and evidence of bifurcation between market share winners and losers amidst an inconsistent and choppy macro backdrop, with commentary regarding competitive opening price points, a still-promotional backdrop (where a consumer is focused on value), and pressure on the low income consumer as headwinds.
