Wayfair (NYSE:W) May Be the Best COVID-19 Retail Sector Stock

August 11, 2020

Adrienne Yih is a Managing Director and Research Analyst at Barclays covering U.S. specialty retail, apparel and e-commerce. She joined Barclays in 2019 and has covered the retail sector for more than 18 years.

Prior to joining Barclays, Ms. Yih worked for Wolfe Research, where she was known for developing robust quantitative models used to inform her fundamental industry view and stock picks, and prior to that, also led coverage of the diversified retail sector at Janney and FBR Capital Markets.

Her finance career began at Prudential Investment Group with experience in investment banking, private debt investing, and quantitative asset allocation. Ms. Yih holds an MBA in finance from The Anderson School at the University of California, Los Angeles, and a B.S. in industrial engineering from Stanford University.

In this 3,750 word interview, exclusive to the Wall Street Transcript, Ms. Yih has detailed the analysis behind her recent retail sector stock picks for this COVID-19 economic disruption.

“I do specialty retail; softlines, so that’s apparel, accessories; and hardlines, which is furnishings, like a Williams-Sonoma (NYSE:WSM) or an RH (NYSE:RH). I also do the wholesale and brand manufacturers, both in footwear and apparel, so that would cover Nike (NYSE:NKE), Under Armour (NYSE:UA), and in apparel, Ralph Lauren (NYSE:RL), PVH (NYSE:PVH), G-III (NASDAQ:GIII).

And then, I do cover some emerging e-commerce, so for example, we cover Wayfair (NYSE:W). So basically, broadly retail in its traditional format, from department stores to specialty, and then as we emerge and change the world of consumer, we gravitate toward the e-commerce backdrop.”

From this coverage universe, Ms. Yih picks her favorites:

“So the simple fact is, if you had a significant portion of your sales coming through stores, they went to literally zero for a good six to eight weeks. You can make the argument that in the COVID/post-COVID period, those that were best positioned were companies like Wayfair. ”

Other names draw a more critical viewpoint:

“I’m not going to differentiate which department stores are going to fare better or live on. The fact is that every 20 years or so, there’s a consumer behavioral shift that is dominated by the generation that is in its spending peak, and today we are in the spending peak of the Millennial.

The next two decades will be all about Millennial consumption, who want everything conveniently, efficiently and at their doorstep.

If you look at the department store segment, the department store model was predicated on everything conveniently in a 100,000-foot box, and 40 years ago was the sort of heyday of the department store, the mid-1980s.

That model just doesn’t work today.”

Get more detail on what works and what won’t work in today’s retail sector by reading the entire 3,750 word interview, only in the Wall Street Transcript.