April 24, 2022: After a deep dive into specialty retail...the market is betting on consumer recession
Is this why valuations are down and dividend yields are up?
We just did a quick analysis of 10+ specialty retailers in the apparel and general merchandise space, including sporting good and footware. Dividends are up, prices are down, and valuations are improving across the board. The only thing that makes sense to us is that the market expects revenues, profits and future cash flows to fall.
This is not limited to specific sectors in specialty retail, but across the board.
This, combined with increasing valuations for the discount retail sector (think Walmart), shows the expected shift away from fashion and accessories to basic necessities.
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