By Katherine Hamilton

Apparel retailers are set to report earnings this week, providing a window into how consumers are feeling about discretionary spending amid rising gas prices.

Investors are anxious to see how higher oil prices related to the Iran war are pressuring retailers' sales and margins. Analysts estimate that higher gas prices could lower consumer spending in other areas by $1 billion this year, if prices stay as high as they have been in May, according to a report from JPMorgan.

While consumer sentiment is seen as the top concern among investors, Wall Street will also keep a close eye on how higher freight costs squeeze margins and whether lower tariff rates are providing any kind of cushion, analysts say.

Abercrombie & Fitch is scheduled to publish earnings Wednesday before the opening bell. The company, which owns Hollister in addition to its namesake brand, is expected to take a cautious stance about the rest of the year. UBS analysts think investors will be closely watching Abercrombie's second-quarter outlook, which could have a big impact on the stock's price.

Capri Holdings is slated to report its fiscal fourth-quarter results on Wednesday morning. The luxury company, which owns Michael Kors and Jimmy Choo, is planning to spend more on lifting sales at the two brands after paying down debt with the proceeds from its sale of Versace.

Burlington Stores will report Thursday morning. Burlington has a lot of lower-income consumers, which could pose a challenge in the short-term, Truist analysts say. They think the off-price retailer's exposure to low-income shoppers could drive volatility, as those consumers are likely to be most impacted by high gas prices and uncertainty.

American Eagle Outfitters' earnings are scheduled to come out Thursday after the bell. Analysts at UBS expect the clothing chain to maintain a conservative view with its guidance, given the macroeconomic uncertainty and potential costs in the second half of the year. Trends have been choppy at American Eagle, especially for women's jeans, as the company has had more promotions than some of its peers such as Levi Strauss, Raymond James analysts say.

Gap will also report Thursday post-market. JPMorgan analysts see Gap as well-positioned to take market share in U.S. apparel, as Old Navy has been performing particularly well and Gap is gaining more traction from fragrance, accessories and beauty. Still, like the others, Gap faces a risk of increasing freight rates and oil prices squeezing margins, UBS analysts say.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

May 26, 2026 11:50 ET (15:50 GMT)

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