BOOT - Boot Barn Foot Locker named top picks in BTIG retail review

BTIG initiated a number of consumer retail and lifestyle stocks on Tuesday, selecting Deckers Outdoor ( DECK ), Revolve Group ( RVLV ), and Boot Barn ( NYSE: BOOT ) as top picks.

The firm’s analysts indicated that while the first half of 2023 will likely be “choppy” amid inventory issues weighing on retailer and macro headwinds hitting consumers, the back half could turn sharply. Retailers able to handle elevated inventory levels earlier in the year should benefit strongly later in the year as consumer rebound into a less promotional environment, according to the analysis.

“We expect fundamentals to inflect significantly by H2 as multiple tailwinds are set to coalesce including  easier topline comparisons, lower YoY markdown levels as inventory is reset, multiple cost benefits, including inbound freight, domestic transportation, and raw materials, all of which have retreated after anomalous spikes during COVID,” the team wrote. “Importantly, we expect a much more stable operating environment than the extremes that characterized the last three years, which should allow management teams to better plan and execute.”

As such, the team started Boot Barn ( BOOT ) Foot Locker ( NYSE: FL ), and Deckers Outdoor Corp. ( DECK ) as Bur-rated top picks. Additionally, Revolve Group ( RVLV ) and Lulu’s Fashion Lounge Holdings ( LVLU ) were initiated at Buy ratings.

“We highlight BOOT as a name that offers a rare combination of growth and stability, attractive in the current environment, and has potential for both earnings upside and margin expansion,” the team concluded.

Elsewhere, Duluth Holdings ( DLTH ), Allbirds ( BIRD ), and Warby Parker ( WRBY ) were started at Hold. The team assumed coverage of Rocky Brands ( RCKY ) and VF Corp. ( VFC ) at Hold ratings as well.

Read more on Baird’s more cautious initiation of Boot Barn .

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