VSCO - Wells Fargo retail favorites weather supply challenges - but see healthy consumers

A recap on retail and e-commerce from Wells Fargo in the wake of second-quarter earnings highlights what it notes are twin dynamics having an impact on the space this summer: fairly positive results from back-to-school season, against a supply chain problem that has been getting worse. The solid start to back-to-school speaks to a healthy consumer, it says (also noting "incrementally restrained" promo levels vs. July). But Vietnam factory closures into September are just the latest wrench in supply chain issues that are driving lost sales and higher cost pressures. And after some "whipsaw" moves for the stocks around earnings, Wells Fargo says the setup in the second half is still tricky amid inflationary pressures, the ongoing uncertainty around COVID-19 and the Delta variant, and retailers trying to digest those potential lost sales from the supply problems. Inventory checks are healthy, though, and it notes that year-over-year, August's percentage of

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Wells Fargo retail favorites weather supply challenges - but see healthy consumers