Dana Telsey, Telsey Advisory Group CEO, joins 'Power Lunch' to discuss what to expect for retailers with the back-to-school season, why stocks are moving on tariff news and much more.

Retail analyst Dana Telsey anticipates a slightly higher back-to-school spending season compared to the previous year, driven by earlier school start dates and an increase in tax-free holidays. Shoppers are expected to focus on value and essential purchases, influenced by rising prices and a desire to take advantage of available deals.

Telsey highlights TJX and Walmart as retailers well-positioned to benefit from these trends, citing their value offerings. She also notes that while some athletic brands face challenges, categories like jeans and fashion footwear are performing better, and brands such as Levi's and Birkenstock are seeing positive momentum. Market reactions to tariff news remain sharp, but recent earnings reports suggest continued sales momentum for many retailers.

TJX, Walmart will benefit from back-to-school: Dana Telsey

Early estimates from a top retail analyst are indicating a more subdued back-to-school spending season that sees shoppers searching for value and sticking to the necessities. Though she does see a slight uptick in spending from 2024. Joining us now is that analyst. Chelsea Advisory Group Chief Research Officer and CEO Dana Telsey. Dana, it's great to speak with you today. Great to see you too. Thank you so much for having me. Okay, the fact that you're expecting at least a little bit of an uptick from last year signals what? I think it signals, first of all, you have earlier school start dates, so people are starting earlier. You have more tax-free holidays, around 95 days with the extensions of Florida and Ohio versus 67 last year. And guess what? Consumers are starting earlier. It's been all over the news, as we all know, that prices are going up. So they're all trying to take advantage of the value that's out there. So I think the earlier shopping, the earlier school start dates, more tax-free holidays led to that. And look at what we've heard from earnings season so far. Sales have been pretty OK because you have the lower-priced inventory. It's all about what the price is going to look like when we get to the fourth quarter. Okay, so if we're talking about value for consumers, shopping for back to school, what's the value for investors? What do you buy here? I want to buy T.J.A.X. I'm getting value there. I want to buy Walmart. And when I think of other items or what brands are working, I think Levi's is working. I think Abercrombie still hasn't outperformed yet, but certainly making a recovery. I think you're getting on running and you're seeing improvement there. And take a look at Birkenstock. You have new closed-toed shoes that are driving sales. Dana, help me understand this. We've seen this, you know, sharp moves in some retailers over the past couple of days as they announced the impact of tariffs on their business. But, you know, the tariffs have been out there for a while, and everybody knows which companies are big importers. Why are we seeing such sharp market reactions at a time when, you know, you could say all that information was already in the market and should have been maybe priced in? You're absolutely right. When you're seeing some of these moves in these stocks, you have two different schools. There's one where there's tariff fatigue from investors and saying, what are companies going to be doing that will drive sales going forward? Also, you have companies, as they've reported second quarter numbers so far, they've been pretty good, better than expected. And even the sales results going into the current third quarter are maintaining the momentum. So I think you're seeing some of that. I think the sharp moves on the downside is about companies that have performed. Well, if they're talking anything cautionary, then wait a second, is the future not going to be as good as the past? So there's a real twist and turn between some turnaround names and those who have had momentum. The future is never as good as the past. Hope. Let's keep watching because we got to see the fourth quarter. You know, I just got to ask you, I realize you don't you don't cover this name directly, but I mean, a huge move today and under Armour this morning. And one of the takeaways was that North America results were below consensus in terms of next quarter guidance. Also below the street management, citing potential demand and cost impacts from tariffs. I just wonder if there's a broader read through from this name or if this is company specific. I think more of its company specific. Obviously, you've had some of the athletic wear names like Nike and like Under Armour, each going through their own transformations. You've definitely seen more competition from newer brands out there like the Ons and like the Hokas. And you know what else you've had? You've had a return to some of the fashion footwear that's out there also. Just like you've seen some of the active wear have slower traffic trends or moderation. You've seen jeans and fashion footwear perform a little better.

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