CNBC's Courtney Reagan joins 'The Exchange' to report on 2025's biggest retail losers and winners, the resilience of the consumer and more.

The retail sector encountered a difficult year in 2025, with the XRT retail index rising only 7.5%, about half the performance of the S&P 500. Despite challenges such as tariffs and shifting consumer behavior, value-driven retailers like Five Below, Dollar General, and Dollar Tree posted strong gains, while specialty brands including American Eagle and Victoria's Secret also outperformed.

Conversely, companies like Lululemon and Target faced setbacks due to internal issues, resulting in leadership changes. Analysts remain cautiously optimistic for 2026, emphasizing that delivering value—through both price and product attributes—remains the key factor for retail success.

Looking back on a rough year for the retail sector

Retailers are closing the book on 2025, and this was a rough one. Courtney Reagan joins us with a review of how the stores performed. Yeah, it was quite a year, actually. I mean, the retail theme for 2025, when I was trying to think about what it was for me, was sort of surprising, and for two reasons. I would say the resilience of the consumer and retailers' ability to mitigate most of the tariff cost to mute the impact for consumers. So the XRT was up seven and a half percent. That's half of the performance of the S&P 500. So not great. But if you would have told me that that would be the case in April, I would not have believed you. You can see the very dramatic drop here in all of these charts, all of the indices that track retail from that April 2nd tariff announcement. Now, consumers were value-seeking, to be fair, and I don't just mean value with price, though that's part of it, but also value in item attributes. So if there was value, consumers would buy it. Low-priced players, they soared five below, up 80 percent. Dollar General gained 75 percent. Dollar Tree, 64 percent. But specialty mall brands, they also did well. American Eagle launched campaigns with Sidney Sweeney and Travis Kelsey. Shares grew 59 percent in 2025. Victoria's Secret stealthily gained 200 percent, and in just the last six months, 32 percent for the year. UBS does have a buy for both AEO and Victoria's Secret for 2026. Now, as Macy's gets smaller, its shares gained 30 percent for the year. Kohl's new CEO led the department store to 45 percent share growth. Tapestry's deal to buy Capri, that was blocked in late 2024, and thank goodness, I guess, for Tapestry, because shares gained 96 percent this year. But Lululemon shed 45 percent under internal missteps. Target, it missed out on that discount rally, too, because of a lot of internal mistakes. Both of those names are getting new leaders in the new year. At least Target, for sure. Lululemon is looking. PVH, Decker's, RH, among the biggest losers of the sector, because not everybody can be a winner. And if you look to 2026, Jeffries says it is more constructive, but still selective when it comes to retail stocks. Nike is its top pick, but it does suggest a short for onholding, while UBS puts onholding on its buy list, along with Ralph Lauren, TJX, Signet and a number of others. Is there one consistent theme, though? Like, if you stop doing promotions, if you start doing promotions, if you have a customer-friendly CEO or an employee-friendly CEO, is there a common theme for the kinds of retail that do well? The best thing I could come up with, and it sounds really generic, and I was trying to explain it as a sort of idea of value. So Dick's executive chairman, Ed Stack, said to me, just because a baseball bat is priced right doesn't mean a consumer will buy it. But if that baseball bat helps that kid score more home runs or improves its stats in some way, the consumer sees value in that. No matter what it costs. And then we will sell it, no matter what it costs. And so that's where it kind of started to be tricky, is where are consumers finding value? Yes, price is part of it, but those item attributes are another part. You can't just put up a private label that's less expensive, but if it's not great in the consumer's viewpoint, they're not going to pay for it, just because it's priced lower. Courtney, thank you very much. It's a big industry to cover, and you're doing really, really well. Thank you.

Russia's defense ministry released video footage on Wednesday (December 31) of what it said was a downed drone at a briefing intended to show Ukraine tried this week to attack a presidential residence and challenge Kyiv's denials that such an attack took place.

Moscow

Russia releases video footage to challenge Kyiv over alleged attack

Severe humanitarian needs in Gaza are worsening as dozens of aid groups are forced to halt operations under new Israeli restrictions.
Up to 48 organizations have stopped work, leaving fewer clinics, food distributions and shelters for civilians.

Jerusalem

Middle East Conflict

Israel to block dozens of aid groups working in war-battered Gaza

The world has begun saying goodbye to 2025, with South Pacific nations first to welcome 2026.

Council of the City of Sydney

Fireworks light up the globe as nations ring in 2026

CNN, citing sources, reported that the CIA had carried out a drone strike earlier this month on a port facility on the coast of Venezuela. U.S. President Donald Trump said the U.S. struck a facility where boats accused of carrying drugs "load up."

Caracas

Trump says U.S. strike hit dock in Venezuela

President Trump says the U.S. "knocked out" a "big facility" last week linked to alleged drug boat operations. Unlike previous operations at sea, this strike occurred on Venezuelan territory, though the president did not disclose specific details about the timing, location, or the party responsible for the attack.

Washington

Trump says U.S. launched strike on boat dock inside Venezuela

Tatiana Schlossberg, the granddaughter of President John F. Kennedy and an environmental journalist, has died at the age of 35 following a battle with cancer, the JFK Library Foundation announced Tuesday.

New York

Tatiana Schlossberg, JFK's granddaughter, dies at 35

The United Arab Emirates says it's withdrawing its remaining forces from Yemen. The move comes after Saudi Arabia bombed a port in Yemen, saying it targeted an arms shipment intended for a UAE-backed separatist force.

Al Mukalla

Saudi Arabia bombs port in Yemen

In an overnight strike, the Saudi military hit a Yemeni port saying they were neutralising a weapons shipments arriving from UAE. The UAE has denied the shipment contained weapons and claimed the vehicles were not intended for any groups. Both countries have supported the fighting sides in the over-decade long war in Yemen, but this strike has turned this rivalry into an open dispute.

The UAE denies shipping weapons to Yemen after overnight Saudi strike

The Kremlin said Tuesday it would toughen its negotiating position in talks on ending the war in Ukraine after accusing Kyiv of attacking a Russian presidential residence — an allegation that Kyiv said was baseless and intended to prolong the conflict.

Russia will toughen negotiating stance on war in Ukraine

China fired rockets into waters off northern and southern Taiwan on Tuesday (December 30) and deployed new amphibious assault ships alongside bomber aircraft and destroyers on the second day of its most extensive war games.

Taipei City

China fires rockets towards Taiwan in war games simulating blockade

President Donald Trump on Monday confirmed an alleged drug-related site was targeted during a recent strike, saying, "they load the boats up with drugs, so we hit all the boats and now we hit the area." Trump did not say when the strike happened or exactly where.

U.S. strike hits Venezuelan port facility

The search for Malaysia Airlines flight 370 that went missing in 2014 with 239 people on board is expected to resume Tuesday (December 30). The Malaysian government and a private marine robotics company say they will use advances in technology to aid in the search.

Kuala Lumpur

Search resumes for Malaysia Airlines flight that disappeared in 2014

The two countries have agreed to hold fire, freeze troop movements and allow civilians to return home under a new agreement.

Krong Poi Pet

Thailand-Cambodia ceasefire holds as 72-hour observation period ends

Head of Yemen's presidential council, which is supported by Saudi Arabia, says UAE-backed forces in the country should leave within 24 hours.

Yemen’s presidential council cancels UAE defence deal

U.S. President Donald Trump said the United States could support another major strike on Iran were it to resume rebuilding its ballistic missile or nuclear weapons programs and warned Hamas of severe consequences if it does not disarm.

Florida

Trump warns Iran of possible strike, urges Hamas to disarm

U.S. hit an area in Venezuela where boats are loaded with drugs, Trump says, as Pentagon carries out another deadly strike in the Pacific. This claim follows a series of U.S. strikes on boats in the Eastern Pacific, raising the total number of known strikes to 31 and resulting in over 100 deaths.

Trump claims attack on a dock in Venezuela, strikes kill two in Pacific

The Taiwanese government says it has placed its forces on alert as China intensifies its military presence in the Indo-Pacific Ocean and launches air, navy and rocket drills around the island.

Taiwan's forces on alert as China launches military drills

Ukrainian President Volodymyr Zelenskyy is denying Russian Foreign Minister Sergei Lavrov’s claim that Ukraine tried to attack President Vladimir Putin's residence in northern Russia.

Kyiv

Ukraine Invasion

Zelenskyy denies Russian claim that Ukraine targeted Putin’s residence

President Trump said after a meeting with Israeli Prime Minister Benjamin Netanyahu that Hamas must disarm soon or "there will be hell to pay." He said the next phase of the Gaza peace plan could move forward quickly if Hamas disarms.

Trump warns "hell to pay" if Hamas doesn't disarm

CBC’s Kris Reyes highlights the biggest AI advancements in 2025 along with the continued calls to establish clear boundaries in an effort to prevent misuse.

DeepSeek and the biggest AI advancements in 2025

Russia accused Ukraine on Monday (December 29) of trying to attack President Vladimir Putin's residence in northern Russia, although it provided no evidence to back up an assertion that Kyiv dismissed as baseless and designed to undermine peace negotiations.

Russia claims Ukraine tried to attack Putin residence

Two helicopters collided above Hammonton, New Jersey, and one person has died, officials say. CBS News' Elaine Quijano reports.

Hammonton

Helicopters collide in New Jersey

U.S. President Donald Trump is meeting with Israeli Prime Minister Benjamin Netanyahu in Florida on Monday (December 29) as questions linger about the future of the U.S.-backed ceasefire in Gaza.

Palm Beach

Trump and Netanyahu meet in Florida to discuss Gaza ceasefire

British-Nigerian boxer Anthony Joshua was involved in a road accident on Monday in Makun, Ogun State, south-west Nigeria.

Makun

British boxer Anthony Joshua survives car crash that killed two others

In a new show of force, China has mobilized its navy, air force, and ground troops to simulate a blockade of the self-ruled island's key ports. The military drill comes on the heels of an $11bn US arms sale to Taipei.

China stages new military exercises around Taiwan

U.S. President Donald Trump said he believes both Ukrainian President Volodymyr Zelenskyy and Russian President Vladimir Putin truly want peace as he and Zelenskyy met in Florida. Some experts say Trump is 'delusional' if he truly thinks Putin wants peace.

Trump-Zelenskyy meeting ends with optimism but no deal

Although the U.S. security guarantees for Ukraine have been "100% agreed," they have a short expiration date, the Ukrainian president explained after revealing more details following his meeting with Trump on Sunday.

U.S. security guarantees for Ukraine set for 15 years, Zelenskyy says

China's military moved army, naval, air force and artillery units around Taiwan on December 29 for its "Justice Mission 2025" drills, as the island vowed to defend democracy and mobilized troops to rehearse repelling a potential Chinese attack.

China launches 'Justice Mission 2025' war games around Taiwan

President Trump spoke with Russian President Vladimir Putin by phone before meeting with Ukrainian President Volodymyr Zelenskyy in Florida on Sunday. Trump said he thinks both men are ready for peace.

Trump meets with Zelenskyy, insists Putin is ready for peace

Far-right politics have pushed further into the mainstream across much of Europe. Populist parties, even in opposition, are shaping national debates on migration and the economy. The trend reflects growing voter frustration over living costs, borders and political trust.

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