Raymond James has observed a broad pullback across retail and digital‑commerce equities in the third quarter of 2026. Softline retail and brand stocks fell on average 8%, while the broader digital‑commerce segment declined 5% despite a solid earnings season in the second quarter, during which most retailers beat revenue, margin and earnings expectations.
The active apparel and footwear category experienced a 15% price decline for the quarter, with price‑to‑earnings (P/E) multiples compressing by two points to roughly 14 times, down from a five‑year average of 19 times. Under Armour, Birkenstock and Deckers each posted losses exceeding 20%, and Nike, Lululemon and On also recorded double‑digit percentage drops. By contrast, Steve Madden managed a 6% gain and Crocs limited its loss to 3%.
Premium apparel and accessories stocks were hit harder, sliding 21% as P/E multiples fell three points to 11 times, compared with a five‑year average of 12.5 times. All tracked companies posted double‑digit declines; Ralph Lauren’s share price fell 12% and Oxford Industries suffered a 30% drop.
Global‑brand and specialty‑retail stocks bucked the trend, rising 2% for the quarter. Their P/E multiples narrowed by half a point to 10 times, versus a five‑year average of 12 times. Abercrombie & Fitch surged 50% and Gap advanced 22%, while Carter’s fell 24% and VF Corp declined 16%.
Department‑store and off‑price retailers posted a modest 2% overall decline, with P/E multiples contracting by one point to 15 times, matching the five‑year average. Ross Stores gained 10%, whereas TJX and Burlington recorded losses of 13% and 16% respectively.
In the digital‑commerce arena, enterprise‑value‑to‑EBITDA (EV/EBITDA) multiples contracted by 1.5 points to 14 times, down from a five‑year average of 21 times. Shopify posted a 30% rally and FIGS rose 35%, while ThredUP’s share price plunged 69%, The RealReal fell 25% and Stitch Fix dropped 38%.
Raymond James attributes the sector‑wide weakness to macro‑economic headwinds, specifically rising oil prices, higher interest rates and lingering concerns that inflation will erode consumer spending power in the second half of the year. These pressures emerged despite the preceding quarter’s robust earnings performance, where the majority of retailers exceeded market expectations.