The upcoming FY26e reporting season is likely to show better sales trends than some anticipate and active margin management that means results should meet consensus expectations. Even trading updates may be “better than feared”. Don’t misinterpret the good news. Retail sales are highly likely to slow by the December 2026 quarter. Those hoping rate cuts will be enough are overly optimistic.

The upcoming reporting season for consumer companies is likely to reveal good sales trends but some gross margin pressure. We expect strong sales and margin outcomes for Sigma and Nick Scali. Retailers with some downside risk to consensus profit margins include JB Hi-Fi and Woolworths. The fact that the economic backdrop for retail may become tougher will result in a greater emphasis on trading updates. We are sitting below consensus on many stocks over FY26e and FY27e. The standouts are A2 Milk, Bapcor, Domino’s, Premier and Temple & Webster.