Consumer Spec - Pre Market Wrap
LEVI beat-and-raise preview, STZ post-print cuts, ONON JPM Catalyst Watch | K-shape restaurants (CAVA +23%, MCD -4%), Lodging +9.6% RevPAR World Cup, PEP/TSN trims, AEO CFO swap, KR defended
Consumer trading well in EU in markets that want to diversify away from semis/AI infra names.
Today most interesting reports are ONON back to OW at JPM at $51, catalyst watch on, MNST Morgan Stanley positive note and multiple LEVI constructive checks with JPM to $32 on viral World Cup tarp campaign and Stifel modeling beat-and-raise; RH up pre-market on $2m insider buy. Lodging Keybank + report at +9.6% RevPAR on World Cup tailwinds.
In more negative notes, STZ mixed as Barclays cuts to $139, Jefferies to $147 post F1Q beat — core brand execution the tell. PEP cut to $144 on PFNA fatigue, TSN trimmed on beef, KR defended at $71 post Giant Eagle.
MACRO & MARKETS
RESTAURANTS: CITI SAYS US TRAFFIC FELL 2.0% IN LATE JUNE, FAST CASUAL LEADS
The firm says US restaurant industry foot traffic fell 2.0% year over year for the week ended June 28, a sharper contraction from the prior week’s 1.1% decline. Full service posted 1.5% growth, limited service fell 2.8%, and fast casual grew 2.2%. Among burgers, MCD traffic fell 3.9% and QSR owned Burger King fell 0.7%. QSR owned Popeye’s and YUM owned Taco Bell both accelerated from the prior week. BROS traffic grew 6.4% and SBUX rose 3.5%. DRI owned LongHorn was up 8.2% and Olive Garden up 2.5%. CAKE grew 4.1% and TXRH grew 4.3%.
CAVA posted the strongest performance at plus 23.1%, CMG grew 4.1%, and WING declined 4.3%. Read through favors fast casual and casual dining incumbents at the expense of limited service burger.
MACRO: GOLDMAN SACHS SEES INVESTORS DIALING BACK MAG 7 EXPOSURE INTO 2H
The firm’s derivatives desk says investors are reducing risk in tech into 2H26, particularly the Magnificent Seven. The desk frames the rotation as the market rewarding capex beneficiaries and semis while questioning hyperscaler spend. Asset light stocks becoming asset heavy creates valuation and multiple questions, and reining in hyperscaler spend could benefit those individual names but prove net negative for the broader market. Until hyperscalers demonstrate a clear earnings inflection path, reducing risk in the largest stocks appears to be the prevailing investor playbook.
US LODGING: RAYMOND JAMES FLAGS REVPAR +9.6% Y/Y ON WORLD CUP TAILWINDS
STR data for the week ended June 27 showed industry RevPAR up 9.6% y/y, with ADR +9.2% and occupancy +0.4%, the third-strongest weekly print YTD behind week 16 (Easter shift) and week 25, and six of the ten best-performing markets hosted World Cup games.
The firm notes Miami led at +51.6% while Seattle was weakest at -12.7%; luxury paced chainscales at +20.7% and urban led locations at +16.7%, with economy (+3.7%) and interstate (+4.0%) lagging. YTD industrywide RevPAR is up 4.9% vs. 2025; over the trailing 28 days, San Francisco (+31.2%) and Chicago (+20.6%) top markets while Orlando (-2.1%) and Denver (-1.2%) trail.
CONSUMER STREET RESEARCH
Upgrades
No upgrades in consumer sector today
Downgrades
No downgrades in consumer sector today
Initiations
On Holding (ONON) Resumed Overweight at JPMorgan
EARNINGS REPORTS
No consumer earnings reports today
ANALYST RESEARCH & NEWS
(FILTERED MANUALLY FROM MOST ACTIONABLE)
ONON: JPMORGAN REINSTATES OVERWEIGHT AT 51, PLACES ON POSITIVE CATALYST WATCH
The firm reinstates coverage at Overweight with a 51 target and adds ONON to Positive Catalyst Watch. The analyst calls On one of the best growth stories in European sporting goods with significant double digit growth opportunities, framing 1) close to 30% DTC growth and slower 25% wholesale growth in Q1, 2) healthy inventory, and 3) very strong gross margin as evidence of controlled, well managed growth that protects brand equity and premium. Shares are down 32% over the past year while EPS expectations have been raised roughly 30%, reflecting close to a 50% multiple re-rating. The firm views concerns on North America and the CEO change as overdone. Modeling Q2 revenue up 24.3% and adjusted EBITDA margin 21.2%, with EBITDA 9% above consensus.
MNST: MORGAN STANLEY REITERATES OW, PT 103 ON RECORD US INNOVATION RAMP
MS reiterates OW with a PT 103, citing a record US innovation pipeline where products launched since last fall now account for 14.4% of US scanner sales in the last four weeks, up from zero in September 2025. The analyst highlights breadth beyond flavors, including LTOs, shot-enhanced products, new brand launches/relaunches, and Europe-to-US cross-geography SKUs, arguing the company could open a much wider innovation window across these genres. The firm sits ~10% above consensus on 2028 EPS and ~6% on revenue, supported by category growth, international share gains, an expected 2027 margin inflection, incremental value drivers from management, and a near-term pricing halo from Red Bull’s HSD summer pricing.
Reading different + checks on LEVI into earnings
LEVI: JPMORGAN RAISES PT TO 32 ON VIRAL WORLD CUP CAMPAIGN, STIFEL PREVIEWS BEAT AND RAISE
Two brokers set a constructive tone into the print. JPMorgan raised PT to 32 from 30 at Overweight, flagging its recent fieldwork ahead of Team USA’s match at Levi’s Stadium as the largest viral marketing moment for the brand to date. FIFA’s clean venue policy required Levi’s Stadium to be temporarily renamed and white tarps placed over all logos; the brand amplified the restriction with an Instagram Reel of the covered stadium that received over 2 million likes, and changed its social profile picture to mimic the tarp covered image. The CMO cited the moment as the most commented and shared post in Levi’s history, generating 500 million plus media impressions with brand mentions up 44% and engagement up 400% since World Cup start per Meltweather data. Checks show improving quality of sale domestically and international momentum suggests the FY26 outlook is conservative. The firm expects F1Q upside passed through to annual guidance, modeling 6.8 billion revenue and 1.65 EPS in FY26E.
LEVI: RAYMOND JAMES RAISES PT TO 27, F2Q CHANNEL CHECKS POSITIVE
The firm raises PT to 27 from 25 (16.5x P/E, premium to 13x 5-year avg) ahead of F2Q26 and sees upside to in-line estimates on positive channel checks tracking a q/q acceleration in Google Trends, website traffic, and mobile app data, with lower y/y online banner promos and limited June data pointing to ongoing momentum. The analyst views guidance as conservative, noting LEVI flowed through only ~30M of a ~100M F1Q beat into FY26 guide (+5.5-6.5% y/y) and assumed higher tariff rates (30% China, 20% elsewhere) despite paying 10% in F2Q; a continued 10% rate would drive $0.07 of EPS upside on 35M in cost savings. The firm models Americas +4% and Europe +6.3% (vs. Street +4%), and expects F2H EBIT margin expansion of ~120 bps to 13.1% on marketing timing, seasonality, full benefit of January/February pricing, and lower parallel DC costs. Reiterates Outperform on MSD%+ top-line drivers, GM% mix, SG&A control, double-digit EPS growth, and robust FCF.
STZ: NEEDHAM STAYS BUY AT 185, JEFFERIES AND BARCLAYS CUT TARGETS POST F1Q BEAT
Three brokers weighed in post F1Q print with a split view. Needham reiterated Buy at 185, calling the print clean with beer depletions broadly consistent with expectations, on-premise trends inflecting to LSD growth, and STZ set to cycle its easiest shipment comp of the year in 2Q. The firm raises EPS estimates and argues improving volume evidence should support multiple expansion. Barclays cut PT to 139 from 170 at Equalweight, framing the topline beat as legitimate but flagging opex timing as a favorable 1Q dynamic, and staying skeptical the reaffirmed FY guide leaves room for post World Cup deceleration. Jefferies cut PT to 147 from 157 at Hold, calling F1Q strong on both lines but noting core brands are not out of the woods and F27 execution risk over the next two quarters is elevated. The firm says Constellation is doing its part with F2 to F3Q marketing ramp and management is focusing on white space, but flags the need for evidence that Modelo and Corona depletions can grow. Bull case leans on print quality and easier comps; bear case emphasizes core brand execution and post World Cup risk.
GIS: WELLS FARGO AND STIFEL RAISE TARGETS ON FY27 GUIDE, BERNSTEIN STAYS UNDERPERFORM
Three brokers split post the 4Q beat and FY27 guide. Wells Fargo raised PT to 33 from 30 at Underweight, noting GIS bounced off lows as EPS recalibration proved better versus feared, logical as inflation prospects improved recently. The firm frames new guardrails as key, with share improvement now factored into guidance and thus critical to the story. Stifel reiterated Buy at 40, noting 4Q EPS of 0.95 was 0.09 ahead on incremental leverage from an extra shipping week and below the line favorability. NAR consumption remains soft but the company is transitioning from price led investments to volume share improvement, with innovation, renovation, and marketing set to drive dollar share in FY27. FY27 guide calls for organic sales of down 1.5% to up 0.5% and EPS of 3.00 to 3.20, prompting the firm to cut FY27 EPS to 3.08. Bernstein reiterated Underperform at 31, calling 4Q in line on sales and 11.8% ahead on adjusted EBIT (about half from timing), with FY27 guidance 0.6% below consensus on organic sales and 1.3% below at the EBIT midpoint. The firm remains skeptical price investments have restored sustainable volume, flagging Totino’s execution issues and Pillsbury Dough returning to negative volume post reinvestment lap.
WMT: WOLFE REITERATES OUTPERFORM AT 132 DESPITE CAUTIOUS CREDIT CARD CHECKS
The firm says external credit card data and checks have been cautious, driving more investor questions about underlying 2Q sales (expectations now below 4.0% US SSS), though operating growth should be strong given what WMT is cycling. Management still sees the low end consumer as pressured, but comp volatility for that cohort is moderating from a 10% best to worst spread during the oil shock to HSD recently, still above the normal 3% to 4% range. Walmart is guiding 4% to 5% cc sales growth in 2Q, slowing sequentially on lack of tax refunds (30bps), general merchandise price hike laps (35bps), and low income consumer softness (35bps). WMT emphasized grocery price war concerns are overstated, arguing every 100bps of price gap would require 1 to 1.5 billion of industry investment, providing confidence in the moat around grocery.
US CONSUMER (KEYBANC): WEEKLY SPEND DECELERATES TO +3.3%, HARDLINES FLAT
The firm’s “All Retail” indexed spend rose +3.3% for the week of June 28, decelerating from +6.8% the prior week and below the six-week average of +3.9% (vs. +3.0% in May and +4.0% in April), with Hardlines/Broadlines flat after +5.8% the prior week.
2QTD standouts include BOBS (+17.6%, +510 bps vs. 1Q26), BBY (+0.9%, +490 bps), AMZN (+11.0%, +280 bps;
The analyst flags decelerations at HD (-0.1%, -160 bps), LOW (-1.9%, -250 bps), TGT (+3.1%, -310 bps), FIVE (+25.4%, -860 bps), and OLLI (-1.8%, -1,200 bps, though Ollie Days timing skews the comp with two event days this week vs. five last year).
HD: STIFEL REITERATES HOLD AS SURVEY SHOWS STABLE DIY CATEGORY
The firm says its June survey supports a stable and slightly improving category consistent with its outlook, viewing the read positively for both HD and LOW. The analyst notes June traffic trended positive and the setup is constructive for meeting the F2Q26 outlook. However, Father’s Day weekend traffic was weaker overall per placer.ai, and Memorial Day weekend traffic fell 8.5% Saturday to Monday. The firm sees the survey read as having greater implications for LOW given DIY exposure but keeps HD unchanged given near term traffic softness offset by improving underlying category dynamics.
KR: GUGGENHEIM REITERATES BUY AT 71 POST GIANT EAGLE DEAL
The firm says recent share weakness reflects both the unexpected but accretive Giant Eagle acquisition and ongoing concerns about stepped up pricing intensity in a potentially re-inflationary backdrop. The analyst notes price wars have been avoided over the past decade given improved demand elasticity analytics and the sizable costs of altering volume trajectories. On Giant Eagle, the firm calls the asset solid in compelling adjacent Midwest markets with significant synergy potential, and notes the transaction is surprisingly inexpensive, likely producing healthy EPS accretion by 2028. The twin goals of volume improvement and EBIT margin expansion are viewed as achievable. Buy rating maintained at 5.8x 2026E EBITDA with 71 target.
LOW: STIFEL REITERATES HOLD ON POSITIVE JUNE SURVEY BUT WEAKER FATHER’S DAY TRAFFIC
The firm says its June DIY survey supports a stable and slightly improving category consistent with its outlook, with greater implications for LOW given the read on DIY trends. The analyst notes June trends were positive but flags weaker Father’s Day weekend traffic per placer.ai, with LOW traffic down 3.6% versus the group down 0.8%. Memorial Day weekend traffic fell 8.5%. The firm views the traffic softness negatively since LOW predicated its F2Q26 comparable sales acceleration on strong performance during these key events.
COST: WOLFE REITERATES PEERPERFORM ON ELEVATED VALUATION AND MUTED MEMBER GROWTH
The firm says at 42x P/E, expectations remain high for COST to deliver, with topline likely tracking up HSD but member growth likely remaining muted. The analyst notes Costco signaled confidence in its core customer with US comping up HSD over the last few months and no real change in underlying trend over 12 to 18 months. Through end of May there were no signs of concerning trade down, aided by a customer 20 to 30 thousand higher income than the average shopper. Gas prices were a 1H tailwind (Costco typically 30 cents cheaper per gallon), but lower gas prices could weigh on 2H comps.
PEP: BARCLAYS CUTS PT TO 144 ON PFNA TURNAROUND SKEPTICISM
The firm says PEP shares have underperformed Staples on building investor skepticism around the durability of the PFNA turnaround, with the pace of improvement from earlier this year appearing difficult to sustain. The analyst notes some innovation is gaining traction but says continued challenges in stabilizing the unflavored core are capping meaningful improvement. The firm lowers 2026E organic growth to plus 2.6%, toward the low end of PEP’s 2% to 4% guide, but holds EPS at 8.54 (plus 4.9%, at the low end of PEP’s 5% to 7% range). Equalweight maintained.
TSN: BERNSTEIN CUTS PT TO 63 AHEAD OF EARNINGS ON BEEF PRESSURE
The firm says US cattle supply remains under pressure with the headcount decline continuing and New World screwworms keeping borders closed. First green shoots of herd rebuilding are visible as heifer slaughter rates have slightly lowered but remain above the definitive rebuild threshold, and any rebuild cycle likely takes several years. The analyst expects Beef to remain unprofitable and segment margins to decline further in 2H26. Chicken should continue performing strongly on high capacity utilization and consumer trade down from beef, with the new Cobb 800 genetic line improving metrics and bolstering growth. Protein demand seen buoyant on Dietary guidelines, GLP-1 uptake, and the World Cup/250th anniversary grilling season.
DECK: CITI REITERATES BUY AT 135 AHEAD OF Q1 PRINT ON JULY 23
The firm reiterates Buy at 135 ahead of the Q1 print expected after market close on July 23. The analyst projects Q1 EPS of 0.87, in line with consensus and guidance of 0.82 to 0.87, with slightly lower overall sales (UGG higher, Hoka slightly lower) and stronger gross margins versus both consensus and guidance. Hoka wholesale is expected softer on European 3PL timing management previously flagged. The firm sees Hoka DTC, UGG summer sales, and promotional assumptions as key focus items. Potential GM upside from tariff refunds could be offset by adverse 2Q weather in the US and Europe. Stock trades at approximately 14x FY27 P/E; risk/reward called attractive into the print.
AEO: BTIG FLAGS CFO TRANSITION, GUIDANCE REAFFIRMED
The firm notes AEO announced longtime CFO Mike Mathias will step out of the role on 8/3/26 after 25 years and shift to a non-executive strategic advisor to Executive Chairman & CEO Jay Schottenstein through 7/30/27, with Ravi Thanawala (previously CFO and President, North America at Papa John’s, and formerly CFO of Nike North America and Converse) joining as EVP & CFO on a $1M base with equity and a 100% target bonus (max 200%). AEO reaffirmed prior Q2 and FY26 guidance and the analyst models Q2 op profit of 47 on comps +6% (guide 45 to 50, MSD-HSD%) and FY26 op profit of 401 on 5% comps (guide 390 to 410). The firm cautions the outlook increasingly leans on Aerie given softer AE trends and may need revisiting depending on AE’s ability to recover to positive comps in H2.
Vuori, founded in 2015 by CEO Joe Kudla, has emerged as a formidable challenger in the premium activewear category, achieving a $5.5 billion valuation in a 2024 fundraising round backed by SoftBank, Norwest and General Atlantic. Profitable since 2017, the privately held, direct-to-consumer brand operates roughly 150 stores—with 30 additional openings slated this year across Canada, England and Mexico—and employs over 700 globally. Emphasizing financial discipline and measured expansion, Vuori has captured share from incumbents Lululemon and Nike, leveraging versatile product positioning, celebrity partnerships and department-store distribution at Bloomingdale's. Women now comprise over half of sales, while a potential IPO remains under consideration.
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EARNINGS CALENDAR
