$Lululemon(LULU.US) saw a small gain, $MIXUE GROUP(02097.HK) is also rising, while $Coca Cola(KO.US) and $Walmart(WMT.US) remained basically unchanged. Categories leaning towards discretionary spending, such as sportswear and freshly made tea drinks, are performing better than consumer staples.
Tariff costs have already been fully reflected in the financial reports. The next key differentiator for consumer stocks will be pricing power—those able to raise prices versus those merely defending market share will see their valuations diverge again. Walmart's earnings report on 8/20 will likely provide the answer along this line.
This combination of outperforming discretionary consumption over consumer staples typically appears in the early stages when interest rate expectations turn looser. Do you see reasons why it can hold up until the end of the earnings season?
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