Mr. Nagel: The luxury companies I cover are basically Tiffany and Williams-Sonoma (WSM). The broader group I follow is hardlines retail, which includes, as I said, the 20-plus companies include things like the home improvement chains, consumer electronics, office products, auto parts, some one-offs like pets or used autos. I follow a health club company by name of Life Time Fitness (LTM).
TWST: You wrote in one of your research reports that you see indicators of luxury goods sales picking up. What is driving that rebound?
Mr. Nagel: Well, I think what's happening with consumer spending broadly is we are seeing a quicker rebound among the higher-income individuals, and that's driving better sales in the luxury category. The thing about Tiffany, I think what makes me particularly excited about the potential for a sales pickup here is, one, it's a function of how quickly things deteriorated there last year. In other words, the comparisons were easier. But as I think about the drivers of better spending over the next few months and through the holidays, I think the stock market is going to be a big one. We've seen the stock market have a pretty amazing run since its March lows, that I think helps to improve confidence broadly and really helps improve this spending ability of higher-income consumers.
Tickers included in this excerpt: TIF, WMT
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.