Investing.com -- Raymond James reported that retail and digital commerce stocks declined during the third quarter of 2026, with softline retail and brand stocks falling an average of 8% and digital commerce stocks dropping 5%.
The decline occurred despite a solid second quarter 2026 earnings season where most companies exceeded expectations on revenue, margins and earnings. Raymond James attributed the recent pressure to macro factors, including rising oil prices, higher interest rates, and ongoing concerns about inflation's impact on spending power in the second half of the year.
In the active apparel and footwear sector, stocks fell 15% during the quarter. Price-to-earnings multiples contracted by 2 times to approximately 14 times, compared to a five-year average of 19 times. Under Armour, Birkenstock, and Deckers all declined more than 20%, while Nike, lululemon, and On also posted double-digit percentage losses. Steve Madden and Crocs performed better, with gains of 6% and a decline of 3%, respectively.
Premium apparel and accessories stocks dropped 21% in the quarter. Price-to-earnings multiples contracted by 3 times to 11 times, compared to a five-year average of 12.5 times. All tracked companies in this segment declined by double-digit percentages, with Ralph Lauren performing better at a 12% decline and Oxford Industries falling 30%.
Global brands and specialty retail stocks rose 2% during the quarter. Price-to-earnings multiples contracted by 0.5 times to 10 times, compared to a five-year average of 12 times. Abercrombie gained 50% and Gap rose 22%, while Carter's fell 24% and VF Corp declined 16%.
Department stores and off-price stocks fell 2% in the quarter. Price-to-earnings multiples contracted by 1 time to 15 times, matching the five-year average. Ross gained 10%, while TJX fell 13% and Burlington declined 16%.
Digital commerce stocks dropped 5% during the quarter. Enterprise value-to-EBITDA multiples contracted by 1.5 times to 14 times, compared to a five-year average of 21 times. Shopify rose 30% and FIGS gained 35%. ThredUP fell 69%, The RealReal declined 25%, and Stitch Fix dropped 38%.