The Analysts Reunited: Strong Sales, Sour Sentiment, and Tough Turnarounds

**Michael LeBlanc** (0:07)
Welcome to Remarkable Retail Podcast, episode 304 I'm Michael LeBlanc.

**Steve Dennis** (0:12)
And I'm Steve Dennis.

**Michael LeBlanc** (0:14)
A quick reminder, the Remarkable Retail Podcast is the official podcast of the Commerce Next Growth Show. Coming up one week from today in New York City, we'll be grabbing lots of content that will be included in our summer episodes. Steve, looking forward to seeing you in person, my friend.

**Steve Dennis** (0:28)
It should be fun. And I also think we're going to see at least one of our guests on stage. We'll maybe save that for later, but one of our guests today is interviewing a young up-and-coming retailer named Mickey Drexler, I believe. But we can straighten that out in a few minutes. But yes, looking forward to seeing you.

**Michael LeBlanc** (0:47)
On this episode, we are back with our very popular analysts to hash over the latest and greatest topics in retail right now. And speaking of the greatest, we have assembled the greatest brain trust in modern retail history with Sucharita Kodali, Vice President and Principal Analyst from Forrester, joining us from North Carolina, Simeon Siegel, Senior Managing Director, Senior Analyst, Retail and E-Commerce, Guggenheim Partners, joining us from New York City, and Neil Saunders, joining us from Parts Unknown, aka Phoenix, for our rousing roundtable discussion.
Now speaking of the summer, we're trying something different this year. We will have live episodes every two weeks that will also feature interviews from Commerce Next. So we'll be skipping next week, and we'll be back on June 30th. And we're moving along so fast, we haven't even had the Analysts say hello yet. Simeon, Sucharita, Neil, how are you doing?

**Simeon Siegel** (1:37)
You didn't give us a chance, you were doing so well, we didn't want to interrupt.

**Michael LeBlanc** (1:43)
Hello, everyone.

**Sucharita Kodali** (1:44)
But hello, everyone.

**Michael LeBlanc** (1:46)
Fantastic.

**Steve Dennis** (1:47)
And Simeon, it is true, right, that you will be interviewing Mickey Drexler on stage.

**Simeon Siegel** (1:53)
I am fortunate enough to be doing, not my first, but yes, I will have a very fun conversation with Mickey. It is always a privilege to sit down with Mickey.

**Steve Dennis** (2:04)
Why don't we jump in? I thought maybe we would start kind of big picture because we have just wrapped up earning season. And of course, there's always a ton of macroeconomic data, a ton of consumer data. But I'd just be curious as we look back on the year so far and the quarter that was, we've got, for the most part, I think pretty good retail results, a few exceptions. Most retailers sounding a bit of caution. But these good results all come up against consumer sentiment, which is pretty awful. So Simeon, we'll start with you. Can you help us make any sense of what's going on?

**Simeon Siegel** (2:42)
So making sense versus saying what's actually happening feels like two totally different things these days. But I think, and we've talked about this in different versions before, I think just consumer sentiment versus consumer spending are increasingly a tenuous relationship at best. I think when people talk, it's different than when people spend. And I think what's really, really, really important is we hear about all these negative backdrops, we know them, whether it's versions of the K-shaped economy, which I'm sure we'll talk about, whether it's global, whether it's really just all the dark clouds that have been here. And yet, best retail sales from a company level, I've seen on the discretionary side in forever. Starting Q3 of last year, they just keep getting better and better. And so I think a lot has to do with tariffs, I think a lot has to do with price, and we'll get into this conversation, but I'll pass the baton from here. I think what I'm looking for, really first and foremost, who's driving more people into the box, into the business versus who's just getting better price. I think everyone got higher price from AUR because of tariffs. I don't think everyone got new customers.

**Steve Dennis** (3:40)
Neil, what's your two cents on this?

**Neil Saunders** (3:42)
Yeah, I really agree with Simeon. I think there is this disconnect between sentiment and the reality for consumers. And we survey every single month people about their sentiment around the economy, and it has increased in terms of the number of people who say that they think the economy is going to get worse. But the interesting is we can also track their actual spending, not what they say they spend. And among all of those who say that they think things will get worse, about 60% went out and spent more than they did in the previous year. So they're not really reflecting in their spending what the underlying mentality is in terms of where they think the economy is going.