By Doug Busch

Despite concerns about a slowing U.S. economy, the U.S. consumer seems to be remaining strong, at least according to the latest data. Investors still might want to take a closer look at which retail stocks to buy.

U.S. gross domestic product jumped 3.3% in the second quarter, and, remember, roughly two-thirds of U.S. gross domestic product is driven by consumer spending.

Yet, the Consumer Discretionary Select Sector ETF (ticker: XLY), heavily weighted with retail giants like Amazon.com and Tesla, has started to lag behind the smaller, more equal-weighted SPDR S&P Retail ETF $(XRT)$ over the past one- and three-month periods. This divergence highlights a subtle shift in consumer trends, spotlighting under-the-radar retail names with solid prospects as we head into year-end.

Among them is Levi Strauss, an iconic name in denim. Its stock has delivered a standout 2025 performance, up roughly 30% this year while offering a solid dividend yield near 2.5%. The stock now trades about 1% shy of its recent 52-week high, far outpacing Kontoor Brands, the maker of Wrangler jeans. Kontoor's stock remains about 17% below its own annual peak.

Levi Strauss entered this holiday-shortened week riding a six-session winning streak. The shares are currently holding just above a weekly double-bottom trigger near $22.45, forged in a base that has been forming for over a year. The next target looks to be the round $30 level hit back in mid-2021 shortly after its initial public offering, potentially in early 2026.

Levi Strauss traded at $22.46 Thursday.

Wolverine World Wide, a rare footwear leader best known for its Saucony brand, has sprinted ahead in 2025, gaining more than 40% while offering a modest dividend yield of 1.3%.

After finding strong support near the very round $10 level in April, confirmed by a bullish weekly engulfing candle, the stock has surged, advancing in 14 of the last 19 weeks. It broke out above a cup-with-handle base at $24.35 on Aug. 6 following a well-received earnings report, and then surpassed a bull flag pivot at $29. Momentum suggests it could reach $36 by year-end, continuing an impressive run.

Wolverine World Wide traded at $32.10 Thursday.

Etsy, the online marketplace known for handmade and vintage goods, is down 2% this year, with most of the declines hitting in the last month, where the stock has fallen nearly 12%. The weakness has been persistent, with Etsy coming into Tuesday having dropped in 11 of the last 12 sessions, and last week alone seeing a more than 15% slide.

Technical support could come into play at the key round $50 level, a price zone that has influenced trading multiple times since the 2024 fourth quarter and again this summer. This level also represents a retest of a strong bullish inverse head-and-shoulders breakout from May 27, which was followed by a 10-day winning streak and a 30% rise. Stay constructive above $48 on the stock.

Etsy traded at $51.69 Thursday.

Write to Doug Busch at douglas.busch@barrons.com

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September 04, 2025 14:07 ET (18:07 GMT)

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